Nationwide Debt Direct recently had a state lawsuit moved to federal court and it’s interesting because it’s yet another example of a suit brought over marketing.
The suit alleges Nationwide Debt Direct “unlawfully obtained Plaintiffs consumer reports and used them illegally to obtain information for the purpose of soliciting Plaintiff for debt settlement and credit repair services.”
The suit states Nationwide Debt Direct, located in Plano, Texas, sent at least one mailer to the Ohio consumer named as the Plaintiff.
Consumer credit report data has been the basis of most of the mailings generated by debt relief companies and used to form the foundation of advertising and claims made. Want to see loads of examples, then click here.
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The mailer in question is alleged to have been sent by another company on behalf of the debt relief company and it contained “numerous deceptions and used information collected from Plaintiff’s consumer [credit] reports.”
The suit states the Plaintiff received the mailer in 2014 and called Nationwide and spoke to a Joe Stone. “Stone indicated to Plaintiff that Nationwide Debt Direct was located in Frisco, Texas and they work to settle debts based on the Credit Card Reform Act. During the phone conversation, Stone indicated that Nationwide offers a federally regulated balance reduction program.” The complaint alleges Nationwide made the assertion its program was front loaded with fees. “During their phone conversation, Stone indicated that Nationwide charges a flat fee of 20% of the client’s debt total and that the fee is spread out 1/3 over the first 3 months and the remainder over 15 months.”
This trend on suits from the data used for marketing efforts should be a concern for all companies utilizing such efforts. Before you do a mailing using such data, you better make damn sure the data in no way came from a consumer credit report that was not accessed with permission or a permissible purpose.
I see an increase in suits against debt relief companies for this issue and also the Telephone Consumer Protection Act black hole of liability.
For those who want to read the suit, the case number is 2:15-cv-02886-MHW-NMK.
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