Collections Company Named In KlearGear Lawsuit Dismissed After Reporting $3,500 Charge Was 'Erroneous'

from the perhaps-the-first-time-a-collections-agency-has-received-positive-attention dept

A little bit of good news has made its way out of the KlearGear debacle. (Quick recap: tech tchotchke store KlearGear screws up order, customer writes negative review, KlearGear bills her $3,500 for violating an extortionate “non-disparagement clause” [which wasn’t even in force when it screwed up her order] and then sends that bill to collections, thus screwing up her credit record.)

Scott Michelman of Public Citizen, which is suing KlearGear on the customer’s (Jen Palmer) behalf, reports that one of the defendants (Fidelity Information Corp.) has fixed its contribution to Jen Palmer’s woes.

Our suit also named the debt collector Fidelity Information Corp., who by this point owned the debt. Now Fidelity has done an independent review of the case and reported to the credit agencies that the debt was erroneous. So the Palmers have a measure of relief – the KlearGear debt is off John’s credit report, finally, after 18 months. Today the Palmers voluntarily dismissed Fidelity from the lawsuit.

That’s good news for the Palmers, whose credit was damaged enough by KlearGear’s fraudulent tactics that it prevented them from getting a loan to purchase a new furnace when theirs broke, as well as hampering their efforts to buy a new home.

That just leaves KlearGear, which has yet to respond to the lawsuit Public Citizen filed more than two months ago. KlearGear’s social media accounts remain shuttered and silent. The company, however, remains open for business, however, with whoever’s behind it presumably revising future earning estimates.

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Companies: fidelity information corp, kleargear

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Comments on “Collections Company Named In KlearGear Lawsuit Dismissed After Reporting $3,500 Charge Was 'Erroneous'”

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13 Comments
John William Nelson (profile) says:

Re: Re: Not immune to the FDCPA or FCRA

Fidelity Information Corp is not immune from the Fair Debt Collection Practices Act or the Fair Credit Reporting Act. Both give a consumer the right to sue and collect statutory damages as well as attorney’s fees if successful.

I hope they didn’t let Fidelity Information Corp out easily. I hope they at least had to pay some basic fees and damages. I do not know the full facts, but my understanding is that Ms. Palmer did attempt to explain to the debt collectors that this debt was erroneous and they simply ignored her.

Clearing up credit is one thing, but Fidelity would be required to do that anyway.

That Anonymous Coward (profile) says:

Fidelity is a company who buys up bad debt (I would guess).
The debt was presented as being valid, and I am sure KlearGear signed an agreement stating as such.

Perhaps having Fidelity fix the reporting, and not trying to screw them over is part of the greater plan for the Palmers. The debt collector is a victim of KlearGear’s illegal practices as much as the Palmers are.

Fidelity got screwed by KlearGear as well, and most likely will be working to obtain back any payments made to KlearGear to purchase these debts.
Come on kids, you can’t believe this is the ONLY time KlearGear sold these debts off – this is the one we heard about. I bet there is a pile of the debts out there on shaky ground just needing a push.

I have a feeling there will be at least 1, if not more, debt collectors coming after KlearGear. Given the general hate for the debt collection industry, I hope they use every sleazy borderline illegal tactic to hound KlearGear.

Couldn’t happen to nicer people.

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