MILWAUKEE (CN) – Capital One Bank and its debt collector send grieving families a “glossy brochure purporting to educate the recipient about the probate process,” to trick family members into calling the collector about debts that have been discharged in bankruptcy, a widow claims in a federal class action.
Lead plaintiff Toni Nieto sued Phillips & Cohen Associates, a collection agency based in Westampton, N.J., and Capital One Bank.
Nieto claims she received three letters addressed to “The Estate of Trinidad Nieto” – her late husband – less than 3 weeks after he died.
The alleged debts had been discharged in bankruptcy and Capital One knew it, according to the complaint.
Then three more letters came with the glossy brochures, Nieto says. She claims the letters “are form letters, generated by computer, and with the information specific to the recipient inserted by the computer.”
The complaint continues: “The envelope that carried each copy of Exhibit B [the second set of three letters] also included a glossy brochure purporting to educate the recipient about the probate process. In actuality, the brochure is intended to deceive a decedent’s family members to voluntarily contact Phillips about debts that the family members do not owe. A copy of the brochure is attached to the Complaint as Exhibit C.
“Each letter in Exhibit B stated: ‘This collection agency is licensed by the Division of Banking, P.O. Box 7876, Madison, Wisconsin 53707.’
“Upon information and belief, Phillips is not licensed by the Office of the Administrator of the Division of Banking, or any other Wisconsin governmental agency.
“The alleged debts that Phillips were attempting to collect had been discharged in plaintiff’s and her husband’s chapter 7 bankruptcy. Plaintiff and her husband received a discharge on October 15, 2010.”
The complaint adds: “Capital One knew that the alleged debts Capital One attempted to collect from plaintiff had been discharged in bankruptcy.
“Phillips and Capital One attempted to use plaintiff’s husband’s death to contact plaintiff and dupe her into paying these discharged debts.
“It is the regular practice of Phillips and Capital One to attempt to use a family member’s death to contact the decedent’s relatives and dupe them into paying debts that have been discharged in bankruptcy.”
They do this to “capitalize on the death in the family,” the widow says in her complaint.
Nieto notes that bankruptcy proceedings are public record. “There are banking and collection industry tools and software that will identify debtors who have filed a bankruptcy and discharged balances,” the complaint states.
Nieto seeks actual, statutory and punitive damages for the class, for federal and state credit, consumer and collection violations, and for using “a communication which simulates legal or judicial process or which gives the appearance of being authorized, issued or approved by a government, governmental agency or attorney-at-law when it is not.”
The class is represented by Shpetim Ademi with Ademi & O’Reilly, of Cudahy, Wisc.