7th Circ. Rules Debt Collectors' 'Settlement' Letters Misleading

Law360, Los Angeles (March 11, 2014, 6:28 PM EDT) -- A Seventh Circuit panel on Tuesday ruled against debt collectors LVNV Funding LLC and Capital Management Services LP in two putative class actions, finding that their collection letters’ offers to “settle” time-barred debts were misleading even though they did not threaten litigation.

Judge Diane Wood, writing for a unanimous panel, held that it was not improper for debt collectors to seek repayment for old debts but that they were not allowed to mislead the debtors into thinking the debt was still legally enforceable.

The companies had...
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