Midland Credit Management, Inc. appears periodically as a defendant in debt collection cases. In this case, the complaint alleges that a debt collection letter sent by the company was misleading. The debt was time-barred, but the complaint claims that the letter did not give full information on that, as required by the Fair Debt Collection Practices Act (FDCPA).
The class for this action is
Plaintiff Sondra Williams allegedly borrowed money via a credit card from GE Money Bank and used the loan for personal, family, or household purposes. Midland Credit Management is a third-party debt collector that was at some point assigned to collect the debt.
Midland sent Williams a debt collection letter dated July 19, 2017, showing that the current balance is $2,707.49. A copy of the letter is attached to the complaint as Exhibit A.
The letter offered three payment options. One was for 40% off the debt for payment of the rest by August 18, 2017. The second was for 20% off with the remainder paid over six months. The third offer was for “monthly payments as low as $50 per month.”
However, the complaint quotes the last line of the letter as saying, “The law limits how long a debt can appear on your credit report. Due to the age of this debt, we will not report payment or non-payment of it to a credit bureau.”
According to the complaint, the debt was actually time-barred or “stale.” This means that Williams can no longer be sued for the debt. It is not a case of what Midland decides it will or will not do; it cannot legally sue her. However, the letter does not inform her of that.
In addition, the letter did not tell her that if she accepted one of the payment plans offered and made so much as a single payment, she might revive the statute of limitations so that she once again could be sued. Leaving out this information does not permit Williams to make the most intelligent choices she can about the debt.
The complaint claims that the Federal Trade Commission, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of the Comptroller of the Currency all agree on one thing: When “collecting on a time[-]barred debt a debt collector must inform the consumer that (1) the collector cannot sue to collect the debt and (2) providing a partial payment would revivie the collector’s ability to sue to collect the balance.”