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Phoenix Financial “Discounted” Offer to Settle Debt FDCPA Class Action

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The Fair Debt Collection Practices Act (FDCPA) was designed to prevent abuse or unfair practices when third-party debt collectors try to collect consumer debts. The complaint for this class action alleges that Phoenix Financial Services, LLC violated the FDCPA in its various attempts to collect a medical debt from the plaintiff in this case.

Although this case is designated on its first page as a class action, no class is defined in the short complaint document. 

On April 17, 2018, plaintiff Jerald Cooper received a bill from PMH/Hamilton Emergency Physicians for medical services rendered in or around April 2018. The amount of the debt was $738, and it had been incurred for personal, family, or household purposes.

The debt later went into default. At some point, it was assigned to Phoenix for collection. However, Cooper disputes the debt and has asked Phoenix to stop communicating with him. Nevertheless, Phoenix sent him a series of collection letters.

A letter from Phoenix dated September 6, 2018 said, in part, “We are authorized to accept a discounted payment of $738.00 to resolve this account for less than the full balance owed. Please contact one of our representatives to make arrangements for this discount.” However, as the complaint points out, this was not a discounted amount; it was the full amount originally billed to Cooper.

Again, on February 5, March 6, and April 3, 2019, Phoenix again sent Cooper collection letters, each offering to accept a “discounted payment” of $738.

On May 2, 2019, Phoenix sent Cooper yet another collection letter, this time offering to accept a “discounted payment” of $780—more than the original bill. 

The complaint alleges that Phoenix harassed Cooper and sent him letters with false “discounted payment” offers. According to the complaint, this constitutes a false, deceptive, or misleading representation in an attempt to collect a debt, which is forbidden by the FDCPA.  It did this, the complaint says, “specifically by creating a false sense of urgency by misleading” him to believe that he was being offered a discounted offer to settle the debt.

The complaint contends that the letter also violated the law “by making a false representation concerning the character, amount, or legal status of” the debt by claiming that the amount was more than the “discounted” settlement offer. Also, the complaint says, Phoenix used “unfair or unconscionable means” to try to collect the debt via the false offer. 

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