Consumer Financial Services Law Monitor

Consumer Financial Services Law Monitor

monitoring the financial services industry to help companies navigate through regulatory compliance, enforcement, and litigation issues

Ethan G. Ostroff

Ethan G. Ostroff

Blog Role:
Editor-in-Chief
Contributor – State Attorneys General, CFPB & FTC; Credit Reporting & Data Brokers

CFS Value:
Ethan specializes in the defense of consumer actions, including class and mass actions, general business litigation, as well as regulatory compliance.

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Supreme Court Refuses to Extend the Scope of the FDCPA to Consumer Finance Company

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Featured Posts
On June 12, 2017, the United States Supreme Court rendered a unanimous decision holding that a company collecting debts that it purchased for its own account does not meet the statutory definition of “debt collector” under the Fair Debt Collection Practices Act (FDCPA) because the debts are no longer “owed or due another.” We previously… Continue Reading

Join Us for a Complimentary Webinar: A Review of the Supreme Court’s Decision in Henson v. Santander

Posted in ALL CFS Blog Entries, CFS Events, Debt Buyers & Collectors
On Wednesday, June 21, 2017, from 4:00 – 4:30 p.m. ET, Troutman Sanders attorneys David N. Anthony and Ethan G. Ostroff will explore the Supreme Court’s unanimous decision issued on June 12, 2017 and how it may affect companies in the collection industry. This decision resolves a Circuit split on the narrow issue of whether an entity… Continue Reading

Favorable Decision Rendered in “Current Account Balance” Case

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On May 18, the Southern District of New York rendered a long-awaited opinion on “current account balance” cases, holding that current balances referenced in collection letters, with no mention of accruing interest or fees, do not violate Section 1692e of the Fair Debt Collection Practices Act where no such interest or fees actually accrue.  The… Continue Reading

District Court Rules SeaWorld Breached Customer Contracts and Violated Electronic Funds Transfer Act

Posted in ALL CFS Blog Entries, Payment Processing & Cards
A federal district court in Florida entered summary judgment against SeaWorld in a class action case, finding the theme park violated the Electronic Funds Transfer Act (EFTA)  by renewing class members’ contracts during their one-year term and collecting unauthorized payments after the contracts expired. Lead Plaintiff Jason Herman commenced the action in December 2014, alleging… Continue Reading

U.S. Supreme Court Rejects “Meaningful Attorney Involvement” Case

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Featured Posts
The United States Supreme Court declined a petition for writ of certiorari by a consumer regarding a collection letter on law firm letterhead with attorney signatures.  The ruling of the United States Court of Appeals for the District of Columbia in Tawanda Jones v. David Sean Dufek, Sr. was left in place, holding that a… Continue Reading

Supreme Court Wavers During Oral Arguments in FDCPA Case That May Upend Entire Industry

Posted in ALL CFS Blog Entries, Auto Finance, Debt Buyers & Collectors, Featured Posts
On April 18, the United States Supreme Court heard long-awaited oral arguments in a case that addresses the fundamental issue of the definition of a “debt collector” under the Fair Debt Collection Practices Act.  The Supreme Court’s decision will resolve an existing Circuit split on whether an entity that purchases defaulted debts and then attempts… Continue Reading

Favorable Spokeo Decision Handed Down in Eastern District of Virginia

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On April 17, the Eastern District of Virginia dismissed sua sponte a suit against a collection agency alleging that the debt collector failed to properly update the plaintiff consumer’s credit report, thereby violating the Fair Debt Collection Practices Act.  Relying on the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins, the Court concluded that… Continue Reading

Join Us on March 23 for a Complimentary Webinar on Electronic Fund Transfer Act (EFTA) – Latest Trends and Developments

Posted in ALL CFS Blog Entries, CFS Events, Payment Processing & Cards
Over the past few years, Regulation E, which implements the Electronic Fund Transfer Act, has been cited by federal regulators in rulemaking, enforcement actions and bulletins. The CFPB has not only used the EFTA in its rulemaking concerning prepaid accounts, but it has filed enforcement actions for alleged violations of EFTA and issued bulletins concerning… Continue Reading

CFPB Sues Law Firms for Debt Relief Fees Disguised as Bankruptcy Fees

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
The Consumer Financial Protection Bureau recently sued three law firms in the United States District Court for the Central District of California for collecting advance fees from consumers seeking debt relief.  CFPB Director Richard Cordray stated that “[t]he defendants exploited consumers who were already suffering financial difficulties by tricking them into paying steep, illegal fees.”… Continue Reading

Validation Notice Including Request for Payment and Identifying Creditor by Acronym Does Not Violate FDCPA

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
The United States District Court for the Southern District of California recently dismissed all of a plaintiff’s claims in the putative class action Matthew Stuppiello v. Southwest Credit Systems, L.P.   The Court held that a validation notice does not violate the Fair Debt Collection Practices Act by including a request for payment “and explain[ing] that… Continue Reading

CFPB Takes Action Against Law Firm Debt Collectors for Lack of Meaningful Involvement

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
On January 9, 2017, the Consumer Financial Protection Bureau (CFPB) entered a Consent Order against Works & Lentz, Inc., Works & Lentz of Tulsa, Inc., two medical debt collection law firms, and their president, Harry A. Lentz, Jr., for the defendants’ violations of the Fair Debt Collection Practices Act (FDCPA) and the Furnisher Rule (Regulation… Continue Reading

Republican Senators Press Vice President-Elect Pence for Removal of CFPB Director

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
On the same day that House Democrats wrote to President-elect Donald Trump to defend controversial Consumer Financial Protection Bureau Director Richard Cordray, two Republican senators sent a letter to Vice President-elect Mike Pence to press for his removal.  The letter, signed by Ben Sasse (Neb.) and Mike Lee (Utah), requested that Trump dismiss Cordray “promptly… Continue Reading

House Democrats Urge President-Elect Trump Not to Remove CFPB Director

Posted in ALL CFS Blog Entries, State Attorneys General, CFPB, & FTC
On January 9, twenty-one Democrats from the House of Representatives sent a letter to President-elect Trump in defense of controversial Consumer Financial Protection Bureau Director Richard Cordray, urging Trump not to remove Cordray from his post.  The letter began by noting that no President has ever removed an independent agency head for cause and threatened… Continue Reading

More Than One Call Per Day is Not Enough to Violate FDCPA; Consent Provided to Creditor Extends to Debt Collector Under TCPA

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Featured Posts
The United States District Court for the District of New Jersey recently held in Samuel Chisholm v. AFNI, Inc. that a debt collector “could not reasonably be found to violate” the Fair Debt Collection Practices Act by calling a consumer 18 times on his cell phone over the course of 13 days.  All calls were… Continue Reading

Attorney Collecting Debt For a Debt Collector May Not Rely on Client’s Validation Notice

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
A district court in the Seventh Circuit has denied a motion to dismiss filed by a collection attorney acting on behalf of a debt collector client, holding that the plaintiff in the case could pursue her claim based on the attorney’s failure to provide his own § 1692g validation notice in an initial communication, even though… Continue Reading

What’s In a Barcode?: District Court in Eleventh Circuit Adopts Benign Language Exception for Debtor’s Account Number

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
A district court in the Eleventh Circuit has joined the Fifth and Eighth circuits, along with a host of district courts throughout the country, in adopting the “benign language” exception to Section 1692f(8) of the Fair Debt Collection Practices Act, and has dismissed a claim based on a collection letter with a visible barcode containing… Continue Reading

Troutman Sanders Attorney Selected to Serve in Attorney State Chair Program for ACA International

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
Ethan Ostroff has been selected by ACA International (Association of Credit and Collection Professionals) to serve in the Attorney State Chair Program for the Commonwealth of Virginia.  The Attorney State Chair Program provides ACA International units and their members with access to an attorney licensed to practice law in their state.  These attorneys have volunteered… Continue Reading

Eastern District of New York Rules That Fee May Be Collected with Principal Balance, Requesting Prompt Contact is Permissible

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
In Igor Vayngurt v. Southwest Credit Systems, L.P., the Eastern District of New York ruled that a debt collector did not violate the Fair Debt Collection Practices Act by attempting to obtain payment of a collection fee at the same time as the principal balance of the debt and requesting prompt contact in the initial… Continue Reading

Extra Assurances Not Required: Collector Not Liable for Letter with No Statement Assuring that Non-Interest Charges and Fees Would Not Accrue

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
The United States District Court for the Eastern District of New York has dismissed a debtor’s claim that a collection letter stating “Non-interest Charges & Fees: $0.00” was misleading under the Fair Debt Collection Practices Act because an unsophisticated consumer could mistakenly believe that non-interest charges and fees might be added in the future.  The… Continue Reading

Fourth Circuit Rejects FDCPA Liability For Filing Proofs of Claim On Time-Barred Debt

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On August 25, 2016, the Fourth Circuit held in In re Eric Dubois, Case No. 15-1945, that filing a proof of claim based on a time-bared debt in a Chapter 13 bankruptcy does not violate the Fair Debt Collection Protection Act (FDCPA) when the applicable state statute of limitations does not extinguish the debt. This… Continue Reading

CFPB Introduces New Protections for Borrowers

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Featured Posts, Mortgage Lenders & Servicers, State Attorneys General, CFPB, & FTC
On August 4, 2016, the CFPB issued its final mortgage servicing rule pursuant to Regulation X of the Real Estate Settlement Procedures Act (RESPA) and Regulation Z of the Truth in Lending Act (TILA). The final rule provides greater foreclosure protections to borrowers and requires further transparency between borrowers and mortgage servicers. The final rule… Continue Reading

Ninth Circuit Rules Every Debt Collector Must Send Verification Notice

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
In a case of first impression, the U.S. Court of Appeals for the Ninth Circuit held in July that all debt collectors must send debtors a verification notice.  “In other words, if there are multiple debt collectors that try to collect a debt, each one must send the required notice after its first communication with… Continue Reading

House Financial Services Committee Releases Draft of Bill to Replace Dodd-Frank

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Featured Posts
On June 23, a discussion draft of “The Financial CHOICE Act” was released by the House Financial Services Committee.  A primary purpose of this bill is to replace the Dodd-Frank Act, including reforming financial institution regulations and significantly changing the structure and authority of the Consumer Financial Protection Bureau.    Specifically, the CFPB’s leadership would change… Continue Reading

CFPB Argues Violation of Statutory Right against Misrepresentation is in itself Concrete Injury

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
In Bock v. Pressler & Pressler, LLP, the U.S. Court of Appeals for the Third Circuit requested supplemental briefs applying Spokeo, Inc. v. Robins to the Article III standing issue at bar. As we previously reported, the Court requested targeted discussion on whether a violation of the statutory right at issue was by itself a… Continue Reading