TO: All persons who satisfy the following criteria: (a) Diversified Collection Services, Inc. (“DCS”) created a check drawn on their account based on an authorization or purported authorization given more than five days prior to the date the check was deposited; (b) they were not sent notice of the intended deposit of the check(s) by DCS “not more than ten nor less than three business days” prior to the deposit of the check(s); and (c) the check was deposited on or after December 3, 1995.

PLEASE READ THIS NOTICE CAREFULLY.
THIS IS NOT AN ATTEMPT TO COLLECT MONEY FROM YOU. THIS IS NOT A NOTICE OF A LAWSUIT AGAINST YOU. YOU MAY BENEFIT FROM READING THIS NOTICE.

WHAT THIS LAWSUIT IS ABOUT

In November 1996, Sandra Rodriguez-Suncin and Walter Steve Suncin (“plaintiffs”) filed a lawsuit complaining that DCS violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. 1601 et seq., by creating and drawing checks on their checking account based on authorization given more than five days before the check was deposited without giving them notification of the deposit 3 to 10 days prior to the deposit. In plaintiffs’ case, plaintiffs entered into an agreement with DCS to repay a student loan owed by them. The agreement provided that Western Union Financial Services would issue a third-party draft against plaintiffs’ checking account each month for a certain amount to pay plaintiffs’ student loan obligation and a second check each month payable to DCS for service fees. DCS did not provide notice to plaintiffs “not more than ten nor less than three business days” prior to issuing and depositing these checks. Plaintiffs allege that this procedure violates 1692f(2) of the FDCPA.

On February 12, 2001, Judge Bolton of the United States District Court for the District of Arizona granted preliminary approval of the settlement, subject to a fairness hearing which will take place on June 4, 2001 at 10:00 a.m. in Room 1400 of the United States District Court, District of Arizona, 230 N. First Avenue, Phoenix, Arizona 85025.

You are being sent this notice because you appear to be a member of the class. This notice explains the nature of the lawsuit and the terms of the settlement, and informs you of your legal rights and obligations.

NO ADMISSION OF LIABILITY

By settling this lawsuit, defendant is not admitting that it did anything wrong.

THE PROPOSED SETTLEMENT

The attorneys for the class believe that this settlement is fair, reasonable, and in the best interest of the class members. The defendants have represented that there are approximately 126,000 class members. The principal terms of the settlement agreement are summarized as follows:

A. Class Recovery: Pursuant to the Settlement Agreement, defendant will pay $100,000 to the class. Payment to the class shall be divided pro rata among all participating class members as the class recovery. The money shall be distributed to those individuals who (i) do not opt-out of the settlement, (ii) do not have their notice returned by the Postal Service without a valid forwarding address, and (iii) who submits a Proof of Claim Form seeking confirmation of the class members’ address and receipt of the subject form letter. Any notice returned with a forwarding address will be remailed by Class Counsel to the address provided. Following final approval, each class member who does not request to opt-out of the settlement, who can be located, and who have submitted a Proof of Claim Form shall receive payment by check. The checks shall be void after 120 days from the date of issuance. Any funds remaining in the class fund after the void date will revert to Class Counsel in order to defer the costs of mailing. In addition, defendant has agreed to give proper notice of withdrawals.

B. Class Representative: In addition, the named plaintiffs, Sandra Rodriguez-Suncin and Walter Steve Suncin, shall receive the total sum of $2,000.

C. Attorneys’ Fees and Costs: The Class Counsel shall receive the total sum of $165,000, representing the fees and costs they incurred as well as the costs for disbursement of the class notice and settlement fund.

D. Release.
1. Class Members. Each class member not opting out shall, as of the effective date of this settlement, be deemed to release and discharge forever defendant, its past or present parent companies, affiliates, subsidiaries, successors, predecessors, and assigns, and its present or former directors, officers, employees and agents (“Released Parties”), of and from all claims, causes of action in tort, contract, statute, or otherwise for statutory damages arising from the acts or omissions alleged in the complaint. No opinion is expressed as to whether any class member has actual damages. This release is conditioned upon the performance by defendant of its obligation toward the class members set forth in this agreement. This release is limited to the individuals listed on the class list, which will be provided no later than 20 days after the execution of this agreement and shall not be used for any purpose other than the litigation and administration of this settlement.
2. Additional Release by Named Plaintiffs. Plaintiffs Sandra Rodriguez-Suncin and Walter Steve Suncin further release defendant and other Released Parties from all claims whatsoever from the beginning of time to the effective date of this agreement, whether or not known now, anticipated, unanticipated, suspected, or claimed, fixed or contingent, whether yet accrued or not, and whether damage has resulted from such or not arising from the acts or omissions alleged in the complaint. This release is conditioned upon the performance by defendant of its obligation toward the plaintiff set forth in this settlement agreement.

OPINION OF CLASS COUNSEL CONCERNING THE VALUE OF THE SETTLEMENT

In an individual action for statutory damages, the person bringing the suit may recover (i) any actual damages suffered and (ii) statutory damages determined by the court, but not more than $1,000. There is no minimum. In either an individual or class action, the person bringing the suit may also recover attorneys’ fees and the expenses of prosecuting the suit, if it is successful. While the theoretical maximum statutory damages recoverable in an individual action is $1,000, there is no minimum, and no assurance that if any significant number of persons attempt to recover $1,000 each, that they will receive anything. The Court has the discretion to award anything between the maximum amount and zero, depending on the egregiousness of the violation. No opinion is expressed as to whether any class member has actual damages. Class counsel believes that this settlement is fair and reasonable and that the class members should accept this settlement. Class counsel has recently settled several other cases involving alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1601 et seq.

FAIRNESS HEARING

A hearing will be held on the fairness of the proposed settlement. At the hearing, the Court will be available to hear any objections and arguments concerning the fairness of the proposed settlement, including the amount of the award to plaintiffs’ counsel of costs and attorneys’ fees. The hearing will take place on June 4, 2001 at 10:00 a.m. before Judge Bolton in Room 1400 of the United States District Court, District of Arizona, 230 N. First Avenue, Phoenix, Arizona 85025.

WHAT YOU CAN DO

1. If you wish to receive a portion of the settlement proceeds, you must return the form at the end of this notice indicating that you wish to participate in the settlement on or before May 14, 2001. You will be represented by the attorneys for plaintiffs without additional charge. Or if you prefer, you may enter you own appearance or ask the Court to allow you to participate through your own attorney. If you wish to participate through your own attorney, an appearance must be filed with the Court by May 14, 2001.

2. You have the right to exclude yourself from both the class action and the settlement by filing a request for exclusion with the Clerk of the United States District Court for the District of Arizona, 230 N. First Avenue, Phoenix, AZ 85025. The request for exclusion must be received by the Clerk of the Court on or before May 14, 2001, and must refer to your name, address, and the name and number of the case. You must also serve copies of the request for exclusion on each of the attorneys for the plaintiffs and for the defendant listed below in the section entitled “Correct Address” by the same date.

3. If you object to the settlement, and wish to submit an objection rather than simply exclude yourself from the class action, you must submit your objection in writing to the Clerk of the United States District Court for the District of Arizona, 230 N. First Avenue, Phoenix, Arizona 85025. The objection must be received by the Clerk of the Court on or before May 14, 2001 and must refer to the name and number of the case. You must also serve copies of your objection on each of the attorneys for the plaintiff and for the defendant listed below in the section entitled “Correct Address” by the same date. Any objection must include your name and address and the name and number of the case and a statement of the reasons why you believe that the Court should find that the proposed settlement is not in the best interests of the class. If you do file an objection and wish it to be considered, you must also appear at the hearing before Judge Bolton on June 4, 2001 at 10:00 a.m. Please note that it is not sufficient to simply state that you object. You must state reasons why the settlement should not be approved.

In order to obtain the benefits of the settlement, you need to fill out and return the Proof of Claim form attached to this Notice. This Proof of Claim form must be received by May 14, 2001.

IMPORTANT: THE COURT REQUIRES THAT ANY REQUESTS FOR EXCLUSION OR OBJECTIONS BE RECEIVED BY THE CLERK BY MAY 14, 2001. IF YOU MAIL A REQUEST FOR EXCLUSION OR OBJECTION, YOU BEAR THE RISK OF THE REQUEST FOR EXCLUSION OR OBJECTION NOT BEING RECEIVED BY THE CLERK BY THE DEADLINE.

If the settlement is not approved, the case will proceed as if no settlement has been attempted. In that event, defendant retains the right to contest whether this case should continue to be maintained as a class action and to contest the merits of the claims being asserted against them in this action. There can be no assurance that if the settlement is not approved, the class will recover more than is provided in the settlement, or indeed, anything.

This description of the case is general and does not cover all of the issues and proceedings thus far. In order to see the complete file, including a copy of the settlement agreement, you should visit the office of the Clerk of the United States District Court for the District of Arizona, 230 N. First Avenue, Phoenix, Arizona 85025. The Clerk will make the files relating to this lawsuit available to you for inspection and copying at your own expense.

WHAT YOU SHOULD DO NOW

IN ORDER TO RECEIVE THE BENEFITS TO WHICH YOU ARE ENTITLED UNDER THE SETTLEMENT AGREEMENT OUTLINED ABOVE, YOU NEED TO FILL OUT AND RETURN THE PROOF OF CLAIM FORM ATTACHED AT THE END OF THIS NOTICE. THIS PROOF OF CLAIM FORM MUST BE RECEIVED BY MAY 14, 2001. You may also consult with an attorney (at your expense), exclude yourself from the case, or file objections, as described above. You also have the right to file an appearance in the case if you wish.

CORRECT ADDRESS

If this Notice was sent to you at your current address, you do not have to do anything further to receive any further notices concerning this case. If it was forwarded by the Postal Service, or if it was otherwise sent to you at an address which is not current, you should immediately send a letter to each of the attorneys for the plaintiff and for the defendant listed below, stating your past and current addresses.