Midland Credit Management Accused of Vague Debt Reporting Conditions

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Midland Credit Management Inc. is on the receiving end of a proposed class action lawsuit that claims it violated the Fair Debt Collection Practices Act (FDCPA) by failing to clearly indicate how much consumers need to pay to qualify for different reporting options. The defendant allegedly sent a collection letter to the plaintiff containing three payment options that offered different settlement amounts. The suit claims that a note at the bottom of the letter stated the following:

“*if you pay your full balance, we will report your account as Paid in Full. If you pay less than your full balance, we will report your account as Paid in Full for less than the full balance.”

The suit argues that this language is misleading to consumers because it can have more than one interpretation. A consumer could reasonably believe that the “Paid in Full for less than the full balance” would only apply to the first settlement option, which had been mentioned in the paragraph corresponding to the asterisk, the suit says. It further claims that a consumer could also reasonably believe that any of the settlement options would result in this reporting option or that any partial payment at all would cause the debt to be reported as “Paid in Full for less than the full balance.” Because of the letter’s ambiguity around how much money is required of the consumer, it violates the FDCPA, the complaint says.