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  4.  — Was Midland Credit Management, Inc. Sued for Allegedly Committing Unlawful Debt Collection in Violation of the FDCPA?

Was Midland Credit Management, Inc. Sued for Allegedly Committing Unlawful Debt Collection in Violation of the FDCPA?

by | Jul 14, 2021 | Firm News |

Yes.  In the United States District Court for the Northern District of Illinois, a federal class action lawsuit was filed against Midland Credit Management, Inc. (“Midland Credit Management”) – which is a debt collector – for alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq.

The Fair Debt Collection Practices Act is a federal law that regulates the actions of debt collectors.

Any debt collector that has allegedly violated a consumer’s rights under the Fair Debt Collection Practices Act (“FDCPA”), can be sued by a consumer for statutory damages of up to $1,000; actual damages including, but not limited to, harm or loss that resulted from a debt collector’s actions; as well as the consumer’s attorney’s fees and costs.

The docket number for the case is Case No. 1:18-cv-01532.

The Plaintiff alleged that Midland Credit Management sent a debt collection letter to him that had the words “TIME SENSITIVE DOCUMENT” written on the envelope in capitalized letters.  The Plaintiff alleged that this was a violation the Fair Debt Collection Practices Act, which is a law that regulates the actions of debt collectors.

The Plaintiff claimed that the writing of that language on the envelope was a violation of that federal statute, because the statute states that a debt collection company cannot use any language or symbol other than a debt collector’s business name or address on the envelope of a debt collection letter, and that the words that Midland Credit Management put on the envelope, and the combination of other statements that Midland Credit Management made in the collection letter itself in regard to discounted payment options offered by Midland Credit Management as well as a statement that Midland Credit Management did not have to renew any of those discounted payment option offers, constituted false and deceptive language and statements.

The United States District Court of the Northern District of Illinois ruled against Plaintiff, and dismissed the complaint, citing a “benign-language exception”; to the statutory language of the Fair Debt Collection Practices Act.  The Court stated that the language “TIME-SENSITIVE DOCUMENT” did not create any privacy concerns for the Plaintiff nor could it possibly cause the Plaintiff to be exposed to embarrassment.  The Court also felt that the language on the envelope as well as the statements within the letter, were not misleading.

The Plaintiff appealed the decision to the United States Court of Appeals for the Seventh Circuit (“Seventh Circuit”).  The Seventh Circuit allowed the federal Consumer Financial Protection Bureau – which agreed with Plaintiff’s position – to file an amicus brief for the Seventh Circuit to consider that supported the Bureau’s position on the case.

The Seventh Circuit reversed the District Court’s decision in part, stating that the language of section 1692f(8) of the Fair Debt Collection Practices Act is clear; that its application does not lead to “absurd” results; and that it was a rational policy choice by Congress to prohibit any writing on an envelope containing a debt collection letter other than language needed for the letter itself to be able to be mailed.  The Seventh Circuit, however, did not feel that Midland Credit Management violated the law.  It stated that Midland properly used safe-harbor language.

In the United States District Court for the District of Arizona, another federal lawsuit was filed against Midland Credit Management and its employees for alleged violations of the FDCPA. The docket number for this case is Case No. 2:11-cv-02492-FJM.

The plaintiffs in this case were a husband and wife who had allegedly owed a debt that was assigned to the defendant for collection. The plaintiffs alleged that in order to collect their debt, the defendant took legal action against them in a local court. The plaintiffs alleged that then they filed a motion to dismiss the defendant’s action and that the court granted them the motion. The plaintiffs alleged that in spite of the dismissal of the legal action against them, Midland Credit Management still continued with their debt collection attempts.

They also alleged that the defendant reported and misrepresented the status of the debt to three credit bureaus (Experian, Transunion, and Equifax) which negatively affected their credit scores. Additionally, the plaintiffs alleged that Midland Credit Management continued to send them written communications regarding the collection of the debt. The plaintiffs alleged that by misrepresenting the status of their debt, knowingly providing false credit information, and using deceptive or misleading means to collect a debt, Midland Credit Management acted in violation of the FDCPA.

Another federal lawsuit was filed against Midland Credit Management and its agents in the United States District Court for the Southern District of California. The defendants were sued for alleged violations of the FDCPA and California state law. The docket number for this case is Case No. 3:09-cv-01427-BEN-BGS.

The plaintiff in this case alleged that Midland Credit Management attempted to collect an alleged debt from him but that he directly disputed the debt with both the company and the credit bureaus. The plaintiff also alleged that he asked for validation of the debt and informed the defendant that it was not his debt. The plaintiff alleged that the defendant never provided him with verification of the debt and that they still reported the debt to the credit bureaus as “Verified” even though it was disputed. Additionally, the plaintiff alleged that the next month, the defendant “re-aged” the accounts in order to make the debt seem more recent. The plaintiff alleged that the defendant’s actions constituted violations of the FDCPA and that as a result, his FICO score was damaged, and he was denied credit.

Midland Credit Management and its agents were also sued for alleged violations of the FDCPA and Colorado state law in the United States District Court for the District of Colorado. The docket number for this case is Case No. 1:10-cv-01954-MSK-BNB.

The plaintiff alleged that in order to collect a debt, the defendants regularly called her many times on her phone for a span of two years. She alleged that these calls were often made three times a day, for four to five days out of a week, and that the calls would also be made on Sundays. The plaintiff also alleged that in these calls, the defendants would state that they were calling from a “pre-legal department” which caused her to believe that she was receiving calls from a law firm. The plaintiff alleged that some of the calls would show up as “Blocked” on her phone, leaving her unable to identify the Caller ID, and that the defendants would not reveal the name of the debt collection agency that they were calling from.

Additionally, the plaintiff alleged that the callers often used profane and abusive language on the phone; that many of the phone calls came before 8:00 a.m. and after 9:00 p.m. (which were outside of the times that they were allowed to call), and that they would often leave automated messages on her answering machine. The plaintiff also alleged that the defendants never provided her with the required mini-Miranda notice and that they never sent her a validation letter or any kind of written correspondence. The plaintiff alleged that many of Midland Credit Management’s actions constituted violations of the FDCPA including calling her at inconvenient and restricted times; making phone calls that were meant to harass or annoy her; failing to disclose their identity; mispresenting the status of the debt; using misleading means during the collection process; and failing to provide her with required notices.

Another federal lawsuit was filed against Midland Credit Management in the United States District Court for the District of Colorado for alleged violations of the FDCPA and the Telephone Consumer Protection Act. The docket number for this case is Case No. 1:18-cv-02808-CMA-KMT.

In this case, the plaintiff alleged that she received continual calls from Midland Credit Management for around four years regarding the collection of a debt. The plaintiff alleged that many of the calls that she received were made using an automated dialing system or a pre-recorded voice because she would often hear a recording before she was connected to a live representative. Additionally, the plaintiff alleged that in one of the first calls that was made to her, she informed the defendant that she could not pay off the debt because she was on a fixed income and asked the defendant to stop calling her. The plaintiff alleged that the defendant acknowledged her request but that the defendant tried to arrange a payment system for the debt and continued to call her despite her request. According to the FDCPA, debt collectors should not make calls to an individual with the purpose of abusing or harassing them. The plaintiff alleged that by continuing to call her after they knew she could not pay the debt and after she requested for them to stop calling, the actions of Midland Credit Management were in violation of the FDCPA.

In the United States District Court for the Northern District of California, another federal lawsuit was filed against Middle Credit Management and its employees for alleged violations of the FDCPA and California state law. The docket number for this case is Case No. 3:10-cv-00791-EDL.

The plaintiff in this case alleged that Midland Credit Management was attempting to collect a credit card related debt from her. She alleged that the defendants called her on her house phone and that they were rude and abusive to her in their communications. The plaintiff alleged that the defendants told her that she had to stop making excuses and accused her of not paying off her bills. She also alleged that the defendants threatened her by claiming that they had her social security number. Additionally, the plaintiff alleged that they informed her that she was being sued for a debt that originated in 1979 but there was no such lawsuit against her. The plaintiff alleged that the defendants never revealed the identity of the collection agency that they were calling from and that they never sent her any correspondence regarding her rights. The plaintiff alleged that the actions of the defendants violated the FDCPA because they used false and deceptive means during the collection process; used abusive language in their communication(s) with her; failed to identify themselves; and failed to provide her with required notices.

Another federal lawsuit was filed against Midland Credit Management in the United States District Court for the Northern District of Georgia in the Atlanta Division. The defendant was sued for alleged violations of the FDCPA. The docket number for this case is Case No. 1:09-cv-02039-JOF.

The plaintiff alleged that Midland Credit Management was assigned to collect an alleged debt from her and that they placed repeated calls to her phone from three different phone numbers. The plaintiff also alleged that the defendant informed her that they would file a lawsuit against her if she did not pay back the debt, but that they had still not yet taken any action against her. Additionally, the plaintiff alleged that the defendant threatened that the State of Georgia would enforce a judgment against her if the debt remained unpaid. The plaintiff alleged the defendant would call her and hang up before she answered or before the call was sent to voicemail. The plaintiff also alleged that the defendant never revealed itself to be a debt collector in their calls. The plaintiff alleged that by engaging in conduct that was intended to be oppressive or abusive, failing to disclose their identity, threatening action that they did not intend to take, and using false or deceptive means to collect a debt, Midland Credit Management’s actions were in violation of the FDCPA.

 

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act (“FDCPA”) is a federal statute enacted by the 95th United States Congress. The FDCPA was created to encourage fair debt collection, to eliminate unlawful debt collection practices, and to provide legal protection for consumers against debt collectors. The types of debt covered by the FDCPA are consumer debts, including but not limited to credit card debt, student loans, auto loans, and mortgages.

There are a number of debt collection practices that are prohibited by the FDCPA. For example, when speaking with a consumer, a debt collector cannot threaten them with violence or with actions that they cannot legally take, lie to them, swear or use profane language, or pretend that they are a government agency or a law enforcement agency, amongst other actions. Additionally, there are restrictions as to when a debt collector is allowed to communicate with a consumer. For example, a debt collector cannot place calls to a consumer between the hours of 9 p.m. and 8 a.m. and if they have already asked for communication to be stopped, the debt collector must cease their calls to both their personal phone and their workplace. A debt collector is also not allowed to call a consumer at times that are inconvenient for them. Moreover, in most states, and unless a debt collector is a debt collection law firm, a debt collector cannot threaten to sue a consumer; as they do not have the present right to do so. In these cases, the right to sue remains with the original or current creditor.

If a debt collector has violated a consumer’s rights under the FDCPA, the consumer can sue them for damages. The consumer could be entitled to statutory damages of up to $1,000.00, as well as actual damages including but not limited to harm or loss that resulted from a debt collector’s actions.