Wisconsin Woman Files Lawsuit Alleging Debt Collector Committed FDCPA Violations

A Wisconsin woman has filed a lawsuit alleging a debt collector committed FDCPA violations.

Plaintiff Patricia K. said she received a letter in July 2017 from Delta Outsource Group, Inc. The letter was allegedly an attempt to collect a debt that had already been charged off by the creditor in February 2017.

Federal regulations allow a creditor to remove a debt from financial records by charging off defaulted debts. The charged off accounts are treated as a business loss and the creditor can receive a tax deduction under the Internal Revenue Code.

Patricia’s complaint says that the creditor of the initial debt has not imposed any interest on the debt, nor any late charges, nor any additional charges, since the account was charged off.

Alleged FDCPA Violations by Delta

Delta allegedly committed FDCPA violations when the company sent Patricia a letter stating the “Current Balance” of the debt was $2,034.03, which implied the debt could be subject to increase in the future, perhaps due to accruing interest and late fees.

The Fair Debt Collection and Practices Act (FDCPA) prohibits a debt collector from using a false, deceptive or misleading representation or means when attempting to collect debt. Whether or not a debt collector has committed FDCPA violations is judged from the view of an “unsophisticated consumer” who has a basic knowledge of the financial realm and average intelligence.

The FDCPA regulates the conduct of debt collectors, including collection agencies, collection attorneys and debt buyers who attempt to collect any consumer debt.

In 1978, Congress enacted FDCPA because it found “abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors” which “contribute to a number of personal bankruptcies, marital instability, loss of jobs, and invasions of individual privacy.”

According to the law, one FDCPA violation is sufficient to establish liability. A debt collector found guilty of FDCPA violations can be ordered to pay the consumer $1,000 in statutory damages, plus any other actual damages incurred, including emotional distress.

The Wisconsin Department of Financial Institutions has its own laws relating to Debt Collection Practices. According to Wisconsin law, anyone who attempts to collect a debt from a consumer credit transaction has to follow Wisconsin’s debt collection law.

According to the Wisconsin plaintiff’s lawsuit, Delta deprived Patricia “of the right to truthful, non-misleading information (as viewed from the perspective of an unsophisticated consumer) concerning the effect of payment on the debt.”

Delta allegedly also failed to state the amount of the debt in an unambiguous manner as required by law.

The FDCPA Violations Lawsuit is Case No. 1:18-cv-01084-WCG in the U.S. District Court for the Eastern District of Wisconsin, Green Bay Division.

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DISCLAIMER: Debt collection itself is not illegal. However, debt collection firms collecting on consumer debts must adhere to the FDCPA. Even though debt attorneys are investigating these companies, their debt collection practices may be legal.