A class action has been filed in New York against collection specialists, Global Recovery & A/R Associates, Inc. The action is brought on behalf of all New York residents who received alleged misleading "form" type collection letters from Global Recovery. The action is brought under the federal Fair Debt Collection Practices Act and seeks statutory damages as well as injunctive and declaratory relief.
According to consumers, Global Recovery has utilized unfair, deceptive and misleading tactics to collect debts for third parties. Particularly, consumers claim that Global Recovery has engaged in activity aimed at overshadowing and rendering ineffective the validity notice required by the Fair Debt Collection Practices Act. Under the Act, those attempting to collect a debt for a third party must inform those from whom they are attempting to collect of their right to dispute the validity of the alleged debt within 30 days. Generally, this notice is provided as part of an initial communication. However, it must be provided no later than five days after the initial communication. Under the Act, any other language that has the effect of overshadowing this notice is strictly forbidden. The consumers allege that although the letter sent by General Revenue contained the required notice, it was not sufficient under the Act. Furthermore, consumers allege that additional letters were sent that clearly overshadowed the statutory notice. According to consumers, Global Recovery has a policy of ending additional, and increasingly more threatening, follow up letters within the statutory 30 day dispute period. Consumers claim that even when they have notified Global Recovery of their desire to dispute the alleged debt, the threatening letters continued to be sent. The consumers allege that these actions have the effect of overshadowing and rendering ineffective the statutory notice, entitling them to damages.