Another Court Rules No FDCPA Violation For: “This settlement may have tax consequences. Please consult your tax advisor.” (John Rossman quoted)

03.20.2017

John Rossman, chair of Moss & Barnett's creditors' remedies and bankruptcy team, was quoted in the insideARM.com article, "Another Court Rules No FDCPA Violation For: 'This settlement may have tax consequences. Please consult your tax advisor.'" (written by Tim Bauer, March 20, 2017). Excerpts from that article appear below.

"On March 15, 2017, a United State District Court Judge ruled that the following statement in a letter was not a violation of the Fair Debt Collection Practices Act (FDCPA): 'This settlement may have tax consequences. Please consult your tax advisor.'" The case is Remington v. Financial Recovery Services, Inc., et al. (Case No. 3:16-865, U.S. District Court, CT).

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Defendant in this case was represented by attorney John Rossman from Moss & Barnett in Minneapolis. (Moss & Barnett also represented the defendant in the Everett case.) insideARM contacted Mr. Rossman for his thoughts on this decision. He commented,

'During oral argument on our motion to dismiss, I explained to the Court that it is my personal opinion that a debt collector is not required to provide a tax consequence disclosure. However, many creditors require that debt collectors provide these disclosures. Further, the disclosure by FRS in this case –- which does not reference 1099-C or any dollar limit – is accurate according to the tax code and does not violate the FDCPA. Clearly the Court agreed with the common sense of this approach. This is certainly an area where guidance and a safe harbor from the CFPB would be a great benefit to consumers and debt collectors alike.'

This is a positive result for the ARM industry on an issue that has no uniform answer."

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