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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House Financial Services Committee Hears Bill to Exempt Lawyers from FDCPA in Connection with Legal Proceedings and Related Communications

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On September 7, the Financial Services Committee held hearings on a bill, H.R. 1849: Practice of Law Technical Clarification Act of 2017 (Trott), that seeks to amend the Fair Debt Collection Practices Act. The current definition of “debt collector” under the FDCPA does not make clear whether it applies to attorneys, especially in the context… Continue Reading

Cursory Investigations and Misleading Reporting Leads to Partial Summary Judgment Win for Consumer

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Featured Posts
A recent federal court decision granting summary judgment to a plaintiff on a claim that a lender violated the Fair Credit Reporting Act (the “FCRA”), 15 U.S.C. § 1681 et seq., by failing to conduct a “reasonable” investigation of a credit reporting dispute – an issue normally reserved for a jury – illustrates the difficulty… Continue Reading

District of New Jersey Judge Allows Consumer’s 1099C Disclosure Case to Continue

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On September 28, 2017, the District of New Jersey denied a debt collector’s motion to dismiss a Fair Debt Collection Practices Act (“FDCPA”) claim based on 1099C language contained in a collection letter.  This decision continues a recent trend, particularly within the courts of the Third Circuit, in denying motions to dismiss on this issue.  … Continue Reading

Court Finds Terrason Spinks and Jet Processing Liable for $281M IWorks Scheme

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On August 18, following a bench trial, the United States District Court for the District of Nevada found defendants Terrason Spinks and his company, Jet Processing, Inc., jointly and severally liable for $280,911,870 in consumer injury caused by violations of the Federal Trade Commission Act (“FTC Act”) and Electronic Fund Transfer Act (“EFTA”).  This case… Continue Reading

CFPB’s Latest Supervisory Highlights Provides Valuable Statistics and Insight on Enforcement Efforts

Posted in ALL CFS Blog Entries, Auto Finance, Debt Buyers & Collectors, Mortgage Lenders & Servicers, State Attorneys General, CFPB, & FTC
The Consumer Financial Protection Bureau recently released its Summer 2017 Supervisory Highlights, which summarizes the agency’s supervisory activities during the first half of this year. Looking to the numbers.  From January through June, the CFPB’s nonpublic supervisory activities led to restitution payments that totaled approximately $14 million, and public enforcement actions that netted an additional… Continue Reading

FTC and Debt Collector Agree to Defendant Leaving Debt Collection Practice

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
On August 24, the United States District Court for the Western District of New York entered a Stipulated Order for Permanent Injunction and Monetary Judgment against the last of a group of defendants who engaged in banned debt collection practices.  The defendant, Anthony Coppola, is now barred from debt collection activities, misrepresenting material facts of… Continue Reading

FTC Charges Deceptive Debt Collectors in Intimidation Scheme; Court Enters Temporary Restraining Order

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
On August 21, the Federal Trade Commission charged a North Carolina debt collection operation with using deception and intimidation to collect money from consumers for debts they did not owe or that the group had no right to collect.  On August 24, the District Court for the Western District of North Carolina granted a temporary… Continue Reading

Central District of California Limits Fees in FCRA Class Action, Creates Bigger Award Pool for Class Members

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
On July 18, the District Court for the Central District of California granted in part and denied in part a motion for attorneys’ fees, costs, and other payments in a Fair Credit Reporting Act class action suit.  The motion accompanied a proposed $400,000 settlement, with a third of the funds allocated to class counsel for… Continue Reading

11th Circuit Rules That Consent Under TCPA Can Be Partially Revoked

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
The Eleventh Circuit ruled in Schweitzer v. Comenity Bank that a consumer can verbally revoke consent to be called on her cell phone using an automatic telephone dialing system “in the morning and during the work day.”  As a result, the district court improperly granted summary judgment to the bank because a jury could find the… Continue Reading

Seventh Circuit Holds That Debt Collector Cannot Avoid Liability Under FDCPA Despite Strict Compliance With Controlling Precedent

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Mortgage Lenders & Servicers
In a surprising decision involving a vigorous and scathing dissent, the Seventh Circuit ruled that a debt collector was liable under the Fair Debt Collection Practices Act even when it followed the law that was in effect at the time the alleged violation took place.  This alarming ruling raises an obvious question:  Is compliance with… Continue Reading

CFPB Warns Older Consumers of Risks of Reverse Mortgage

Posted in ALL CFS Blog Entries, Mortgage Lenders & Servicers
Financial professionals often recommend a reverse mortgage loan as a way to delay claiming Social Security benefits.  A reverse mortgage, federally insured through the Federal Housing Association’s (“FHA”) Home Equity Conversion Mortgage Program (“HECM”), allows homeowners age 62 and older to borrow against the equity in their homes and defer payment of the loan until they… Continue Reading

Northern District of Illinois Rules for Debt Collector on Challenge to 1099-C Language

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On August 9, the Northern District of Illinois granted summary judgment to a debt collector who included 1099-C language in its collection letter.  The Court held the language was not false or deceptive, and that no reasonable person could read the language otherwise. In Moses v. LTD Financial Services I, Inc., et al., plaintiff Kirk… Continue Reading

Seventh Circuit Holds Rule 67 Tender of Full Relief Does Not Moot TCPA Class Action

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Mortgage Lenders & Servicers
In Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016), the Supreme Court held that an unaccepted offer of full relief under Rule 68 to a named plaintiff was insufficient to moot class claims.  However, the Supreme Court expressly left open the possibility of a “different result if a defendant deposits the full amount of the… Continue Reading

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