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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
An individual has filed a Fair Debt Collection Practices Act lawsuit against a collector for not honoring a settlement agreement that was reached to pay a debt for less than the full balance owed, largely because the payment that was made was for an “inexplicably precise” amount.
A copy of the complaint, filed in the District Court for the Eastern District of Tennessee, can be accessed using case number 23-cv-00261 or by clicking here.
In May 2020, the plaintiff received a letter from the defendant regarding a past-due credit card debt. The balance owed was $1,144.62 and the defendant offered to settle the debt for $572.31. The plaintiff did not have the funds to make the payment at that time. In October 2020, the plaintiff hired a debt consolidation company and posted $8,259 to settle her debts. The plaintiff then contacted the defendant about the credit card debt and negotiated a settlement for 43% of the balance that was owed, or $492.19. The plaintiff had the debt consolidation company make the payment.
A few days later, the plaintiff received a letter from the defendant, informing her the balance on the account was now $652.43 — $492.19 less than the original balance. The letter offered to settle the debt for a payment of $430. The current creditor has subsequently filed a collection lawsuit against the plaintiff to recover the remaining $652.43.
“Assuming for arguendo that [defendant] avers that Plaintiff’s payment of $492.19 was a payment made prior to the settlement offer being agreed upon, the inexplicably precise figure of $492.19, which as stated supra is exactly 43% of the original balance of $1,144.62, suggests that this figure was not a regular payment,” the complaint alleges. “Furthermore, Plaintiff asks that this Court take judicial notice that it is common practice for debt collectors and creditors to settle debts in whole number percentages.”
The plaintiff filed suit, alleging the account should have been zeroed out when the first payment was made. She claims to have been denied credit as a result of the defendant’s actions and she has been forced to pay $15,000 in higher interest rates.
The complaint accuses the defendant of violating Section 1692e(2)(A) of the FDCPA by misrepresenting the character, amount, or legal status of the debt.
