Suit alleges collection agency sent deceptive letters to drivers involved in collisions

A class action case alleges a collection company used deceptive practices when it sent notices claiming consumers owed debt from motor vehicle collision incidents.

The case, originally filed in Illinois in December, was moved to a Seattle federal court on Monday.

It was filed by plaintiff Benjamin Cerean, who alleges the collection company, Afni, violated the Washington Consumer Protection Act (WCPA) when it sent a letter asserting he owed more than $8,000 to Progressive Insurance from an August vehicle collision.

Cerean’s collision involved another vehicle, with minor damage to both vehicles, the suit says. It adds that Afni was claiming Cerean owed money for alleged damages to the other driver’s vehicle.

“The letter could induce an individual to remit payment to Afni in response to it, under the mistaken belief that the claim was a legally enforceable debt, when in fact it was an unadjudicated claim for tort damages,” the suit says.

According to the suit, the letter also noted that the Department of Transportation would be notified about the incident, which may result in the suspension of Cerean’s driving or registration privileges.

Cerean, confused by the letter, contacted an attorney to investigate Afni’s claim. It was found that neither Afni nor Progressive had reported the alleged debt to the Washington Department of Licensing.

The suit alleges that Afni attempted to collect from more than 40 Washington consumers using collection letters with substantially similar language.

“Notice of insurance subrogation claims are unfair or deceptive if they look like debt collection notices and may induce people to remand payment in the mistaken belief that they have a legal obligation to do so, when in fact the notices represent nothing more than an unadjudicated claim for tort damages,” the suit says.

The Consumer Financial Protection Bureau (CFPB) issued a consent order against Afni in 2020 for violating the Fair Credit Reporting Act (FCRA), according to CFPB’s website.

It states Afni furnished information to CRAs that it knew, or had reasonable cause to believe was inaccurate. This included failing to report appropriate first delinquency dates on certain accounts, failing to conduct reasonable consumer dispute investigations, and failing to send required notices to consumers.

A $500,000 penalty was imposed, and the company was required to take certain steps to improve and ensure the accuracy of its furnishing and its policies and procedures related to credit reporting and dispute investigation.

In 2023, a number of repair shops told Repairer Driven News they were receiving notices from a collection agency, Wilber, sent on behalf of Liberty Mutual or an affiliate company.

The letters state that the insurance company sought reimbursement for total loss charges after the claim was settled. Shops were asked to return money they had been paid for things like storage or blueprint fees.