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HomeSuccesses$118,000 Settlement in Unlawful Tenant Debt Collection Class Action

$118,000 Settlement in Unlawful Tenant Debt Collection Class Action

Outcome: $118,509.85 Settlement

Galdamez v. I.Q. Data International, Inc., Case No.: 15-cv-1605 in the United States District Court for the Eastern District of Virginia

Moving apartments is often a stressful process. For Virginia residents Sara Judith Garcia, Jorge Armando Escobar Barillas, and Virginia de Jesus Pena Pozuelos, moving became even more stressful when their former landlord hired debt collection company I.Q. Data International to collect an alleged unpaid balance. I.Q. International sent the plaintiffs a collection letter which stated that the plaintiffs owed six percent interest along with the original amount. According to the letter, if the plaintiffs did not pay, they would continue to accrue interest.

However, under Virginia law, landlords can only collect interest on unpaid balances if there was an interest provision in the lease or if they have a judgement against the tenant from a court. The plaintiff’s landlord had neither of these things. Tycko & Zavareei LLP alleged that I.Q. Data International’s practice of charging interest was an illegal attempt to collect more money from the plaintiffs and to scare them into paying an unvalidated debt.

In 2017, Tycko & Zavareei negotiated a settlement on behalf of the plaintiffs and other renters in Virginia, North Carolina, South Carolina, West Virginia, and Maryland. 1,206 people in these states had paid interest to I.Q. Data International, and they received up to $1,788.00, depending on the amount of interest they paid. I.Q. Data International had charged interest to an additional 8,904 people, who each received a portion of the $118,509.85 settlement. With this settlement, Tycko & Zavareei sent a message to debt collectors that they cannot get away with threatening renters into paying money they don’t owe.

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