On September 8, 2021, the Washington Attorney General’s Office (AG) announced that it had reached a settlement agreement with a debt collection company, resolving allegations that the company had violated the Washington Consumer Protection Act (CPA), RCW 19.86, and the Washington Collection Agency Act (CAA), RCW 19.16.
The settlement concludes a lawsuit originally filed June 25, 2020, in which the AG alleged that the debt collection company’s letters to Washingtonians were deceptive. Specifically, the complaint alleges that the company’s use of the phrase “settlement offer” implied that the debt collector might sue to collect the debt. Because the letters failed to disclose that the company could not enforce the debt in court, according to the complaint, the debt collector “engaged in an unfair or deceptive practice in trade or commerce that affected the public interest” in violation of the Washington CPA. This practice also allegedly violated the CAA (RCW19.16.250(16)), which prohibits “a Washington-licensed collection agency to threaten any action against a debtor which the licensee cannot legally take.”
As a part of the settlement with the AG, the debt collector will enter into a consent decree with the state, pursuant to which the debt collection company will pay the state $1.32 million, will pay $355,000 in restitution to consumers, and will be enjoined from using the terms “settle” or “settlement” in offers to resolve time-barred debts unless the company also discloses that the statute of limitations has run on enforcing the debt.