A class action lawsuit filed by Weisberg & Meyers LLC in the U.S. District Court in the Southern District of New York will move forward after a joint motion to dismiss filed by defendants Cohen & Slamowitz LLP, Encore Capital Group, MRC Receivables Corp. and Midland Credit Management Inc. was denied by Judge P. Kevin Castel for three out of four alleged violations of the Fair Debt Collection Practices Act (FDCPA).
The judge's order refused to dismiss the lawsuit’s allegation that defendants Encore and subsidiaries MRC and MCM could be held vicariously liable for potential FDCPA violations in a collection letter sent by Cohen & Slamowitz LLP, an affiliated collection law firm that is part of Encore Capital debt collection network.
The original class action complaint, filed in November 2010, alleges a mailed communication plaintiff received from “Law Offices of Cohen & Slamowitz LLP” contained multiple FDCPA violations. The plaintiff’s consumer account was first purchased from Citibank by Encore Capital, along with several others, as part of a consumer accounts portfolio.
According to the communication and court documents, the law firm was trying to collect the debt, now owned by Midland Credit, with an offer of a 50% off “Tax Season Special Discount” to settle the debt in full.
The communication and thousands exactly like it, allegedly falsely represented the creditor as “Midland Credit” rather than “MRC Receivables”, and used the prefix “Law Firm Of” in lieu of the firm’s legal name “Cohen & Slamowitz LLP”, both potential FDCPA violations. Castel’s order declined to dismiss these allegations against the defendants.
The lawsuit alleges that through the collection efforts of its subsidiaries and network, Encore can be held vicariously liable for violations of the FDCPA. Encore, MRC Receivables and Midland Credit Management had filed a joint motion to dismiss claiming they are not liable for alleged violations.
Encore Capital officials were not immediately available for comment.
