An Omaha woman has filed a lawsuit seeking class-action status that says a Nebraska debt collector sent letters that led her to believe her debt would be viewed as valid by the court system if she did not dispute it.
Jody Jernigan filed the lawsuit last week in U.S. District Court in Omaha. The defendants are General Collection and the law firm Truell Murray & Associates, both based in Grand Island. The suit seeks class-action status, representing other people with claims similar to those of Jernigan.
Attempts to reach General Collection and Truell Murray were unsuccessful.
The heart of the dispute is language included in collection letters. Jernigan, the suit says, received letters saying, “Unless the debtor disputes the debt within 30 days after receipt of the notice, it will be assumed that the debt is valid.”
The suit says that Jernigan thought the wording meant that the Nebraska county court system, a forum widely used by creditors to legally enforce legitimate collection efforts, would assume the debt was her legal obligation. Jernigan, the suit says, acknowledges defaulting on a credit line from a lender, and that Truell Murray had sued her in Douglas County Court.
But the language in the collection letter she received is not what is spelled out in the federal Fair Debt Collection Practices Act, according to a Pennsylvania case filed in 2008 in U.S. District Court in Scranton. That court in that case said debt validation notices must specify that only the debt collector — not others, such as courts or credit scoring companies — will assume the debt is valid.
“An undisputed debt may only assumed to be valid by the debt collector,” reads the Jernigan lawsuit, filed by Omaha's Car & Reinbrecht law firm, summarizing language from the federal law. Attempts to reach lawyers from Car & Reinbrecht were unsuccessful.
People should not downplay the seriousness of small deviations in wording, which on the surface might seem to be trivial, said lawyer Carlo Sabatini. He is the Pennsylvania attorney who represented a debtor in the 2008 case.
“The statute is very specific,” Sabatini said. “It is written to provide specific notice to consumers of the impact of what is going on. Omitting the key words could lead people to the wrong impression, such as that they are barred from disputing the debt in court.”
General Collection's website says the company has been in business since 1959. In 1997, it was bought by Mark Stelk, also named as a defendant in the suit. The site says the company's business has tripled under his ownership and now employs 38 people, up from eight before.
“Our full-service debt collection agency is only one of two in Nebraska certified by the Association of Credit and Collection Professionals, an organization that demands the highest degree of ethical practices and conduct from its members,” the company website says.
The company is well-known in Grand Island, a member of many area chambers of commerce and the Nebraska Bankers Association.
Lawsuits seeking class-action status follow a long process before they proceed to trial, if they ever do. Common objections by defendants that can derail class-actions include arguing that the issues in question are inappropriate for the forum and that the proposed class representative fails to adequately represent the proposed class.
In the Jernigan case, the proposed class consists of people sued by Truell Murray on behalf of General Collection in the past year or so for collection of a personal, family or household debt who received the validation letter with the disputed wording. The suit asks for a jury trial.