Class Action Claims Credit Control Contravened FDCPA

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Credit Control, LLC is the defendant in a proposed class action that alleges the company violated the Fair Debt Collection Practices Act (FDCPA) by including language in a collection notice that could “be read to have two or more different meanings.”

Filed in New Jersey, the lawsuit claims the defendant informed the plaintiff that “if the amount cancelled on this debt equals or exceeds $600, the IRS may require” it to be reported. The least sophisticated consumer would mistakenly understand this to mean the creditor is mandated by the IRS to report the forgiveness of a debt if it equals or exceeds $600 irrespective of whether the amount charged is interest or principal. The defendant’s statement on the IRS disclosure is inherently deceptive and misleading, the lawsuit says, because it provides the least sophisticated consumer with “erroneous and incomplete” tax information because “in actual fact and according to IRS regulations, the creditor ‘will not’ be required to report to the IRS forgiveness of debt in an amount greater than $600 in forgiveness, if the amount contained interest.”