The action alleges that named plaintiff Doris DeKoven received a collection letter on April 1, 2004, which stated that she owed money to Spiegel. The letter allegedly informed her that her account had not been paid, and had been referred to Enhanced Recovery for collection. On May 18, 2004, she received a second letter that allegedly offered her a one-time chance to settle her $3,783 account for $2270, as long as the full amount was received by June 2, 2004.

The lawsuit alleges that, although Enhanced Recovery’s first letter contained the statutorily-required notices regarding verification of the debt, that language was overshadowed and rendered ineffective because it demanded that Ms. DeKoven “either pay or contact ERC today.” The FDCPA requires that all communications from collection agencies be written so that unsophisticated consumers will not be confused, and this seemingly contradictory demand allegedly violates the FDCPA.

The second letter allegedly violated the FDCPA because it advertised its discount offer as a “one-time” settlement offer, when in fact, Enhanced Recovery is virtually always ready to settle delinquent debts at a discount rate. Because of the portrayal of the offer as special, most unsophisticated consumers would assume that they could not take advantage of the discount except as indicated by the letter. The action alleges that thousands of form letters similar to the ones received by Doris DeKoven have been sent to Illinois consumers in the last year.

Debt collectors that violate the FDCPA are liable for $1000 in statutory damages for each erroneous letter they send, up to the lesser of $500,000 or 1% of their net worth. The FDCPA contains very specific rules that debt collectors must follow: Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing --

• the amount of the debt;

• the name of the creditor to whom the debt is owed;

• a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

• a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

• a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

If the consumer notifies the debt collector in writing within the thirty-day period, that the debt, or any portion, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector must cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

If any of these provisions is not followed exactly, a debt collector may find itself liable for damages.