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Condo | HOA Lawyers

Debt Collectors Adherence to Generic Forms Were Inaccurate and Misleading


A company that handled fee collections for an Association engaged in unlawful practices when it falsely indicated that a lien had been filed against two homeowners.


Plaintiffs Chad and Caitlin Truhn fell behind on their assessment payments to their Homeowner’s Association. In their agreement with the Association, the Truhns agreed to pay the cost of collecting their fees, a task the Association outsourced to EquityExperts.org, LLC (“the Collector”). The Truhns eventually settled their debt and brought suit alleging that the Collector’s practices violate the Fair Debt Collection Practices Act (“FDCPA”). The Truhns claimed that the Collector’s collection letters contained incorrect and misleading information.

United States District Court, Eastern District of Michigan

The Court held that the Collector violated the FDCPA by using language within their collection letters that would lead the Truhns to believe that a lien had been filed against them. Specifically, the Collector falsely represented it was actively in the process of recording a lien, when in fact, a lien had still not been filed more than six weeks later when the Truhns had satisfied their debt. The Court explained, because the least experienced consumer would more than likely have read the letter to mean that the lien had been mailed directly to the recording office, the Collector violated the FDCPA.

The Collector’s statement that a collection cost had been charged to the Homeowner’s Association, though technically untrue, did not violate the FDCPA. The Court’s reasoning was that the bill was charged to the Association – the Collector simply had yet to send the bill to the Association. Therefore, the statement was not a material misrepresentation.

Lesson Learned

If you use a fee collections service, make sure you communicate clearly with the company to ensure that they are using specific and factually accurate information in their collection letters.

Truhn v. EquityExperts.org, LLC, No. 18-12698 (E.D. Mich. Nov. 20, 2019) (unpublished opinion)


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