Washington reaches $1.6 million settlement with debt collector
On September 8, the Washington attorney general announced that a Renton-based debt collector (defendant) will pay over $1.6 million in a settlement to resolve allegations that it violated the Washington Consumer Protection Act by misleading consumers with offers for “settlements” of debts. According to the AG, the defendant sent letters titled “settlement offers,” but failed to disclose that because the debt was older than the six year statute of limitations for filing a suit to collect, it could not enforce the debt in court. The term “settlement offer” allegedly deceptively suggested the defendant could potentially litigate to collect the debt. Under the terms of the settlement, the defendant is required to: (i) pay full restitution to 1,400 Washingtonians, a total of nearly $710,000; (ii) pay $1,675,000 to the attorney general’s office, including payment to cover the costs of the case and fund future investigations and enforcement of the Consumer Protection Act; (iii) cease using the words “settle” or “settlement” when attempting to collect on time-barred debts; and (iv) disclose that the statute of limitations to sue on the debt has passed.