Lenvil Miller owed $2,501.61 to the Star Bank of Cincinnati. Star Bank referred collection of Miller’s account to Payco-General American Credits, Inc. (Payco), a debt collection agency. Payco sent Miller a collection form. Across the top of the form was the caption “DEMAND FOR PAYMENT” in large, red, boldface type. The middle of the page stated “THIS IS A DEMAND FOR IMMEDIATE FULL PAYMENT OF YOUR DEBT,” also in large, red, boldface type. That statement was followed in bold by “YOUR SERIOUSLY PAST DUE ACCOUNT HAS BEEN GIVEN TO US FOR IMMEDIATE ACTION. YOU HAVE HAD AMPLE TIME TO PAY YOUR DEBT, BUT YOU HAVE NOT. IF THERE IS A VALID REASON, PHONE US AT [ ... ] TODAY. IF NOT, PAY US—NOW.” The word “NOW” covered the bottom third of the form. At the very bottom in the smallest type to appear on the form was the statement, “NOTICE: SEE REVERSE SIDE FOR IMPORTANT INFORMATION.” The notice was printed in white against a red background. On the reverse side were four paragraphs in gray ink. The last three paragraphs contained the validation notice required by the Fair Debt Collection Practices Act (FDCPA) to inform the consumer how to obtain verification of the debt. Miller sued Payco on the ground that the validation notice did not comply with the FDCPA. Miller argued that even though the validation notice contained all the necessary information, it violated the FDCPA because it contradicted other parts of the collection letter, was overshadowed by the demands for payment, and was not effectively conveyed to the consumer. Discuss whether Payco has violated the FDCPA.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Lenvil Miller owed $2,501.61 to the Star Bank of Cincinnati. Star Bank referred collection of Miller’s account to Payco-General American Credits, Inc. (Payco), a debt collection agency. Payco sent Miller a collection form. Across the top of the form was the caption “DEMAND FOR PAYMENT” in large, red, boldface type. The middle of the page stated “THIS IS A DEMAND FOR IMMEDIATE FULL PAYMENT OF YOUR DEBT,” also in large, red, boldface type. That statement was followed in bold by “YOUR SERIOUSLY PAST DUE ACCOUNT HAS BEEN GIVEN TO US FOR IMMEDIATE ACTION. YOU HAVE HAD AMPLE TIME TO PAY YOUR DEBT, BUT YOU HAVE NOT. IF THERE IS A VALID REASON, PHONE US AT [ ... ] TODAY. IF NOT, PAY US—NOW.” The word “NOW” covered the bottom third of the form. At the very bottom in the smallest type to appear on the form was the statement, “NOTICE: SEE REVERSE SIDE FOR IMPORTANT INFORMATION.” The notice was printed in white against a red background. On the reverse side were four paragraphs in gray ink. The last three paragraphs contained the validation notice required by the Fair Debt Collection Practices Act (FDCPA) to inform the consumer how to obtain verification of the debt.
Miller sued Payco on the ground that the validation notice did not comply with the FDCPA. Miller argued that even though the validation notice contained all the necessary information, it violated the FDCPA because it contradicted other parts of the collection letter, was overshadowed by the demands for payment, and was not effectively conveyed to the consumer. Discuss whether Payco has violated the FDCPA.
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