Class-action status eyed against Nebraska debt collector - Omaha.com
Published Sunday, June 23, 2013 at 1:00 am / Updated at 5:56 pm
Class-action status eyed against Nebraska debt collector

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.

Contact the writer: Russell Hubbard

russell.hubbard@owh.com    |   402-444-3133

Russell Hubbard covers banking, financial services, corporate finance, TD Ameritrade, business lawsuits, bankruptcies and other economic and financial topics.

Lyft launches in Omaha; police won't ticket drivers while service is free
In Omaha, bus tour calls for hourly minimum wage over $10
Michelle Obama gets resume from girl with jobless dad
Amazon launches grocery service for Prime members
Cabela's 1st-quarter sales down 21 percent as gun, ammo sales dip
Omaha’s Straight Shot Accelerator hones its focus for latest class of 7 invited companies
Omaha senator seeks minimum wage ballot measure
Kelly: Started at a dining room table, Home Instead thriving at 20 with $1B in annual revenue
Hy-Vee opens its first Omaha Market Cafe
Omaha's Eppley Airfield sees increased demand — and that means more fare options for travelers
Construction to start in May on West Broadway apartment/retail structure
No 'bear' qualifies to ask Warren Buffett questions at this year's Berkshire meeting
Omahans start their workday earlier than most, at 7:48 a.m.
Omaha Hall of Fame inductees share stories of their lives in business
Warren Buffett says Coca-Cola pay plan 'excessive'
Earnings roundup: Apple plans more stock buybacks, will split stock in June
In brief: Postal workers to protest at Staples stores
'Main street' concept takes shape at Sterling Ridge
Nebraska Crossing Outlets stores, layout
OSHA: Union Pacific must reinstate worker who reported injuries suffered on job
West Corp.'s 1st-quarter profits up 33 percent
Stock market ‘not rigged,’ TD Ameritrade CEO says
First lady announcing one-stop job site for vets
Powdered alcohols no longer have label approvals
'We have a serious problem in Nebraska': PSC discusses concerns over Uber, Lyft
Deadline Deal thumbnail
7M Grill
Half Off Delicious Comfort Fusion Food & Drinks!
Buy Now
< >
SPOTLIGHT »
Inside Business
To submit an announcement for "Inside Business", click here. For questions call (402) 444-1371 or e-mail announcements@owh.com.
WORLD-HERALD ALERTS »
Want to get World-Herald stories sent directly to your home or work computer? Sign up for Omaha.com's News Alerts and you will receive e-mails with the day's top stories.
Can't find what you need? Click here for site map »