Another Court Finds a 1099(c) Disclosure May Be False, Deceptive or Misleading

In a Fair Debt Collection Practices Act (FDCPA) case, a Federal Judge has declined to dismiss a lawsuit claiming that a 1099(c) disclosure in an initial letter was a false, deceptive, or misleading statement regarding potential tax consequences in relation to a proposed settlement of a debt. The Memorandum Opinion in case, Velez v. Enhanced Recovery Company, LLC (Case No. 16-164, U.S. District Court, Eastern District of Pennsylvania) was filed on May 2, 2016. A copy of the opinion can be found here.

The Litigation

The Plaintiff in the case, Radamed Velez, brought suit alleging that defendant Enhanced Recovery Company, LLC (“ERC”) violated the FDCPA by sending him a collection notice with a false, deceptive, or misleading statement regarding potential tax consequences in relation to a proposed settlement of his debt. ERC moved to dismiss the case pursuant to Federal Rule of Civil Procedure 12(b)(6). Editor’s Note: A Rule 12(b)(6) motion is a request by a party to dismiss a lawsuit for “failure to state a claim upon which relief can be granted.”