Target Likely Headed to Class Action Lawsuit Over Debt Collection

Target — home of the bulls eye and those crazy escalators just for your shopping cart — will more than likely find itself part of a class-action lawsuit if plaintiff Pennsylvanian Vicki Higgins has her way.

The details are scanty in this AP news story, but Higgins, via her lawsuit, is claiming unfair collection practices. She alleges that Target, along with its law firm, Patenaude & Felix, are using false affidavits: “TNB–” that’s Target National Bank “–took the false and misleading affidavits and utilized them to secure judgments against hundreds, and perhaps thousands, of alleged debtors.”

If you’re of a legal bent, you can read the complaint here. Some highlights:

1. Higgins is alleging “emotional distress in the form of fear, anxiety, anger and stress.” I call this “my morning bus commute.”

2. Turns out, Vicki Higgins wasn’t the Vicki Higgins Target National Bank was looking for. When she received the letter saying she owed the debt, she wrote back “advising she did not have an account with Target National Bank or Target Department Store and requested documentary proof.”

3. And here’s where the trouble starts: When writing back, TNB asserted, “You represent to our office that the above-referenced debt from a revolving charge account with TARGET NATIONAL BANK was not incurred by yourself or anyone authorized by you. Further, you represent that you never received a TARGET NATIONAL BANK credit card or a loan or check bearing account number 4352371726401160. Instead, you believe your identity was stolen and someone else applied for and used the revolving charge account with TARGET NATIONAL BANK.” Only that’s not what Higgins said at all. She never claimed her identity was stolen. She just said that she never had an account with TNB.

4. TNB also never sent Higgins any documentary proof of her past-due debt. In a later letter to TNB, Higgins writes, “I requested some type of confirmation that this account belonged to me. Now months later you sent me a copy of a past due bill from Target Visa that has my name and address on it. If the company puts my name and address on a past due bill at your request it doesn’t make me liable for the delinquency. I am contacting my attorney to find out if it was legal for you to do that.”

5. TNB proceeds — more than likely not out of any sense of malicious glee, regardless of how this will get spun in consumer circles — and, unfortunately for the bank, continues with the initial fiction that Higgins has alleged identity theft: something she never did. (This “identity theft” angle is something TNB is going to worry like a dog with a bone throughout the complaint.)

6. And here we are.

Back to #5 above: when dealing with anything high-volume, it is often easiest just to mechanize the whole process. I’m sure TNB deals with countless actual defaulters on a daily basis. Vicki Higgins’s case, though, shows one of the HUGE pitfalls to this kind of automation: any nuance for individual cases gets back-seated in order to keep the process machine running. The problem is, like Target’s discovering, when that machine breaks a little, it’s really going to end up breaking a lot.