Northland Group Facing Debt Collection Case Over Tax Language

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A New York consumer’s proposed class action against Northland Group, Inc. takes issue with certain language the debt collector allegedly included in a notice it sent to the man over an obligation supposedly owed to Citibank, N.A. According to the lawsuit, Northland informed the plaintiff in an August 1, 2016 notice that Citibank will “report any discharge of indebtedness as required by the Internal Revenue Code and corresponding IRS regulations.” The lawsuit claims this directive is deceptive and misleading under the Fair Debt Collection Practices Act (FDCPA) because, per IRS regulations, discharge of debt amounts “other than stated principal” is not required to be reported.

The defendant had no duty to disclose to the plaintiff any potential tax ramifications, but since it chose to make such disclosures, it must do so in a non-misleading way, the case argues. Citing current case law, the complaint characterizes the pertinent language contained in the defendant’s notice as “ambiguous,” adding that the above statement’s vagueness and uncertainty “does not erase the fundamental mischief and deception that the statement intends to cause to the consumer.”