FDCPA Class Action Filed Against Northland Group Inc.

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A proposed class action lawsuit claims defendant Northland Group Inc. broke the law by including language in a debt collection letter that misleadingly stated the forgiveness of debt needs to be reported to the IRS. Filed in New York district court, the eleven-page complaint claims the Minnesota-based debt collection group sent the plaintiff a letter with tax disclosure language that could “reasonably be understood” by the least sophisticated consumer to mean all instances of debt forgiveness need to be declared to the IRS. This is not entirely accurate, the lawsuit claims (emphasis ours):

“If the creditor wishes to legitimately give tax advice in a sincere manner, one that does not mislead the consumer, then that creditor should specify and make clear to the least sophisticated consumer that only certain amounts require reporting, and that this applies only to principle and not to interest forgiveness.”