September 25, 2018 / 9:06 PM / 6 months ago

3rd Circuit says debt collector's IRS notice could be misleading

Midland Credit Management must face a proposed class action accusing it of misleading New Jersey borrowers by suggesting in debt collection letters that they may owe federal taxes if part of their debt is canceled, a federal appeals court ruled on Monday.

In a unanimous decision, a three-judge panel of the 3rd U.S. Circuit Court of Appeals revived a 2015 lawsuit accusing California-based Midland of violating the U.S. Fair Debt Collection Practices Act (FDCPA) by telling consumers in collection letters that it might report canceled debt to the Internal Revenue Service, when that was not the case.

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