Northland Group ‘Threatens,’ ‘Misleads’ Consumers in Collection Letters

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Northland Group, Inc. is facing a proposed class action lawsuit filed by two individuals who claim the defendant’s collection letters contained misleading and threatening language. The first plaintiff says she received a letter from Northland containing a settlement offer that the debt collector claimed it was “not obligated to renew.” The suit claims that the letter was misleading because it implied that Northland’s offer could expire at any moment and that the consumer could pay the settlement amount and still be held accountable for the rest of the debt.

The second plaintiff says she received a letter from Northland that contained the following statement:

“At this time, Capital One, N.A. has informed us that your account meets its requirements for possible legal action. No final decision about possible legal action on this account will be made until more than 30 days after your receipt of this notice to allow time for you to exercise your rights set forth below.”

The suit argues that the defendant “has no basis” for its determination that Capital One intends to file a lawsuit against the plaintiff. The statement was included to threaten the consumer into paying her debt and avoiding litigation against her, the complaint says.

The letter also allegedly contained a line informing the plaintiff that her creditor “will report any discharge of indebtedness as required by the Internal Revenue Code and corresponding IRS regulations.” The suit claims that this language misleads the consumer into believing that any settlement will be reported to the IRS, when there are various exceptions to the reporting requirements. According to the complaint, Northland included this statement to threaten the consumer into paying more of her debt than she was required to pay.