A new class action accuses another debt collection law firm of improper collection practices regarding the debt collection process.
Kalliopoi Klatsis, on behalf of herself and others, filed a new class action lawsuit in Cook County Circuit Court on April 3 accusing the Kohn Law Firm and Midland Credit Management of alleged unlawful violations of the Fair Debt Collections Practices Act for allegedly omitting "safe-harbor" language as a means to allegedly mislead and collect larger amounts from debtors that what is owed.
According to the complaint, Klatsis incurred an alleged credit card debt for household goods and services which she was unable to pay due to unforeseen financial hardship. As a result, the account went into default and the creditor, Synchrony Bank, filed a claim against her to attempt to recover it.
On April 5, 2021, a judgment for just over $4,000 was entered on the state complaint. In February 2023, Kohn mailed a letter to Klatsis in connection with the judgment entered and the alleged debt. The letter informed her of the alleged debt, but allegedly did not inform her that the debt would be increasing at a rate of 5% per day.
The suit accuses Kohn of not including so-called "safe harbor" language disclosing that they were attempting to collect the full amount plus interest accrued daily until it's paid off.
Safe harbor language provides debt collectors with a way to notify consumers that the amounts they owe may ultimately vary.
The complaint alleges debtors had no knowledge or understanding until informed by her attorney that even if she "paid off" the debt that had been entered into judgment, she would continue to owe a larger amount because of the daily interest incurring new charges she said she was not aware of.
In her complaint, Klatsis asserts she would have pursued a different course of action concerning the debt she had incurred if she had known the alleged truth of the 5% daily accrual rate imposed on unpaid judgements.
The plaintiffs seek to expand the action to include potentially everyone in Cook County who has received such letters from Kohn Law Firm which allegedly omitted safe harbor language. The complaint does not estimate how many people that may include, but says it is at least more than 40 people.
Plaintiff is demanding a trial by jury and is seeking actual, statutory and punitive damages, plus court costs and legal fees.
Klatsis is represented by attorney Mario Kris Kasalo, of The Law Office of M. Kris Kasalo, of Skokie.