The Fair Debt Collection Practices Act (FDCPA) tries to prevent third-party debt collectors from misleading or confusing consumer debtors. The complaint for this class action claims that GC Services Limited Partnership has violated that law in its misleading presentation of the debt amount in its debt collection letter.
The class for this action is all natural persons who received a letter from GC Services, dated between November 12, 2017 and the present, which was meant to collect a past-due consumer debt, and which was in a form substantially similar to Exhibit A in this case.
Plaintiff Massimo Caradonna allegedly incurred a debt in his Citicard credit card account for personal, family, or household expenses.
At some point, the debt was assigned to GC for collection. GC sent Caradonna a debt collection letter, dated November 12, 2017. A copy of the letter is attached to the original complaint as Exhibit A.
The FDCPA requires that third-party debt collectors provide certain information in their first contact with consumer debtors or within five days thereafter. One of the things that it requires is a clear and unambiguous statement of the amount of the debt. The complaint for this class action claims that GC has not provided that.
The paragraph in the letter at issue says, “As of the date of this letter, you owe $16,713.32. Because of interest, late charges, and other charges that may vary from day to day, the amount owed on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your payment, in which event we will inform you.”
The problem with this paragraph, the complaint says, is that it leaves the real amount vague. It doesn’t say for sure whether interest, late charges, or other charges are actually accruing. It doesn’t say how much these charges will amount to or when these charges will be applied.
The FDCPA requires that the amount the debtor owes must be clear, so that the debtor knows how much they will have to pay on any given day. If interest, later charges, and other fees are not accruing, the letter should not suggest that they may be, the complaint says. And, it adds, if they are, the letter must provide the consumer with more exact information.
The idea is that consumer debtors must know all information, so that they can make informed decisions about the best way to handle their debts and the best times to pay them. However, they should not be misled if interest and charges are not accruing into thinking that they are. This puts pressure on the consumer to pay sooner rather than later, which may not be in the consumer’s best interest.