Darla Myers owed over $11,000 to an automobile finance company in 2001.

LHR was hired to collect the debt, and an LHR agent contacted her with threats of a lawsuit and garnishment of her wages. Ms. Myers negotiated a settlement whereby LHR accepted approximately $3,000 as complete payment for the debt.

Myers wire-transferred the money to LHR to satisfy the debt and later received a letter saying the debt was paid in full. Despite this settlement, Ms. Myers later found out that her settled debt was still reported to the credit agencies by LHR, and this action adversely affected her credit rating.

CASE QUESTIONS

1. Were LHR’s actions lawful under the FDCPA? Why or why not?

2. If LHR’s actions were not lawful, what could it have done to comply with the act?