Class Action Alleges MCM, Midland Funding Misrepresented California Consumer’s Time-Barred Debt

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A California consumer claims in a proposed class action that Midland Credit Management, Inc. (MCM) and Midland Funding, LLC sent her a collection notice that misrepresented the legal status of her time-barred debt and the potential ramifications of making a payment.

According to the suit, the February 2018 letter concerned a debt originally owed to Capital One Bank and stated, in part:

“The law limits how long you can be sued on a debt and how long a debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or non-payment of it to a credit bureau.”

The case argues this statement falsely implied that the time-barred debt was legally enforceable and that the decision to sue the plaintiff for it was within the defendants’ discretion. In truth, the suit says, the debt’s statute of limitations would restart in the event the plaintiff submitted payment, which would thereby open her to potential litigation.

Moreover, the complaint says the letter contained multiple settlement offers requiring payments that would stretch over a period of time. The problem with this, according to the suit, is that the defendants failed to disclose that making a partial payment with a written acknowledgement of the obligation may restart the debt’s statute of limitations.