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Midland Credit Inadequate “Stale” Debt Info FDCPA Class Action

Person Buried Under Letters D-E-B-T

Different states have different statutes of limitations for consumer debts. After it expires, the consumer can no longer be sued for the debt. However, even a small payment can revive it, and the person can once again be sued. The complaint for this class action alleges that Midland Credit Management, Inc., in trying to collect a debt for Midland Funding, LLC, did not inform consumer that if they paid anything on the debt, they could once again be sued. 

The class for this action includes

  • All individuals who have addresses in Pennsylvania
  • To whom Midland Credit sent a letter attempting to collect a consumer debt
  • On behalf of Midland Funding,
  • That included settlement offers with monthly payments
  • Without revealing that a partial payment would restart the statute of limitations,
  • Which was sent between June 18, 2018 and July 9, 2019.

There is also a Subclass for those whose letters contained deceptively-worded settlement offers.

Plaintiff Anna Marie Davis allegedly incurred a debt to Webbank, for personal, family, or household purposes. At some point, Midland Funding bought the alleged debt and assigned for collection to Midland Credit. 

Midland Credit sent a collection letter dated June 20, 2018 to Davis. 

The complaint claims that the letter violates the Fair Debt Collection Practices Act (FDCPA) in two ways.

First, and most importantly, the letter does not adequately address the fact that the debt was “stale” or time-barred. 

It contained this line: “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, we may continue to report it to the credit agencies as unpaid.” It also contained three offers for settling the debt. What it did not contain was any notice that if Davis paid anything on the debt, it could restart the statute of limitations, so that she could once again be sued for it. 

Second, the third of the three options was unclear. The first offered a payment option which would settle the debt at 40% off. The second a payment option which would settle it at 20% off. The third offered monthly payments of as little as $50 per month. However, it did not make clear whether this involved a discounted settlement of the debt or full payment of it. 

The complaint alleges that Midland used deceptive, false, or misleading representations in its efforts to collect the debt. 

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