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Van Ru Credit Corporation Implies Increasing Amount of Debt FDCPA Class Action

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The Fair Debt Collection Practices Act (FDCPA) is meant to protect consumers from abuse and misleading or confusing representations in the collection of debts. The complaint for this class action claims that Van Ru Credit Corporation sent consumers letters that falsely implied that it would be to the consumers’ advantage to pay their debts sooner rather than later because the debt amounts might increase.

The class for this action is

  • All individuals with address in Kings County, New York
  • To whom Van Ru Credit Corporation sent a collection letter to collect a consumer debt
  • That failed to clearly state the amount of the debt, by implying that a payment sooner rather than later would be more economical for the individual, and by employing false, deceptive, and misleading representations, and
  • That was sent between June 26, 2017 and July 17, 2018.

Plaintiff Mabel Reyes allegedly owed a consumer debt to Discover Bank, and allegedly fell behind on her payments. At some point, this debt was given to Van Ru for collection.

On or about April 11, 2018, Van Ru sent Reyes a letter attempting to collect the debt. A copy of the letter is attached to the complaint as Exhibit A.

The letter notes that the “Current Balance” is $1981.47. The complaint claims that the designation “Current Balance” implies that later balances may be different, or higher. It cites a previous lawsuit in which it was found that inviting debtors to call for “the most current balance information” suggests that the debt might be increasing and violates the FDCPA unless an explanation is provided.

Normally, the complaint says, collection letters state an “Amount Due” or an “Account Balance.” Qualifying the amount with the word “current,” the complaint says, creates doubt as to whether the amount is increasing or not. If the account actually is increasing, the complaint says, the letter must plainly inform the consumer of that fact; if the amount is not increasing, it is deceptive to imply that it is.

The FDCPA states that a debt collector “may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” This includes “the false representation” of “the character, amount, or legal status of any debt…”

The complaint claims that the designation of the amount as a “current amount” is exactly such a misleading representation, and that it has been used to pressure the consumer to pay sooner rather than later, suggesting that the debt may increase if the consumer waits.

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