Nebraska debt collection suit can be class action

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Posted: Tuesday, July 16, 2013 12:00 am

A lawsuit against a Grand Island debt collector can proceed as a class action that might include as many as 27,000 eligible Nebraska consumers, U.S. District Judge Joseph F. Bataillon has ruled.

The ruling Friday stems from a 2011 lawsuit filed in U.S. District Court in Omaha by three Omaha residents against Credit Management Services.

They say in the suit that Credit Management violated federal debt collection laws by saying payment requests were sent 90 days before the filing of collection lawsuits, when they weren’t. The consumers also say in their suit that Credit Management requested detailed financial information, such as copies of tax returns and pay stubs, after it had filed collection suits.

Request for such information violate federal debt collection laws and “deceive the unsophisticated consumer into believing such information must be provided in order to defend the collection lawsuit,” the lawsuit reads.

John Guthery, an attorney for Credit Management with the Lincoln firm Perry Guthery, declined to comment on the class-action certification.

His side has argued in court papers that the lawsuit is flawed.

The court is still considering a motion by Credit Management to rule summarily in its favor because the suit, according to case documents, “constitutes a collection of conclusory statements which purport to establish alleged violations but, ultimately, lack sufficient facts or applicable law to support them.”

That motion is pending and unaffected by the class-action status ruling.

Credit Management employs about 180 people, according to the company website, and works with about two-thirds of Nebraska’s hospitals. The company says it has 1,800 clients across the region.

The suit says the company wrote in its standard collection lawsuits filed against consumers that more than 90 days had elapsed between demand for payment and the filing of the legal action.

“In fact, defendants do not routinely send a ‘claim’ to consumers prior to filing the county court collection lawsuit,” the consumer suit says.

Also, the suit says, attempts to collect interest or attorney fees didn’t comport with the law.

Court documents say lawyers for consumers contend 27,000 people were sued in Nebraska by Credit Management during the relevant periods, which extend as far back as four years. Credit Management, documents say, contends there are only 5,000.

Last month, an Omaha woman sued another Grand Island debt collector, General Collection, in U.S. District Court in Omaha. That suit is seeking class-action status, citing collection letters the woman said led her to believe she had to dispute a debt or the court would automatically consider the obligation as valid.

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