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

Debt Buyers & Collectors

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Debt Collector Defeats FDCPA Suit with Bona Fide Error Defense

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
A federal judge in Utah has ruled that a debt collector may rely on the “bona fide error” defense to defeat a claim for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq.  Analyzing the compliance procedures that the debt collector had in place, the Court granted summary judgment for… Continue Reading

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

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

Northern District of Illinois Says that Revocation of Consent for One is Not Revocation of Consent for All

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On August 23, a federal judge in Illinois ruled that a consumer who had multiple accounts with different creditors assigned to the same collection agency did not effectively revoke consent for all accounts merely by revoking consent for one.  Specifically, the Court said that when a consumer told a collection agency to stop calling him… Continue Reading

11th Circuit Applies Totality-of-the-Circumstance Analysis to Judicial Estoppel

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Mortgage Lenders & Servicers
On September 18, in an en banc review, the Court of Appeals for the Eleventh Circuit overruled, in part, seminal cases Barger v. City of Cartersville, 348 F.3d 1289 (11th Cir. 2003) and Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir. 2002), adopting a totality-of-the-circumstances analysis when facing questions of judicial estoppel.  In… Continue Reading

Plaintiff’s Counsel Ordered to Pay Defendant’s Fees and Costs in Bad Faith FDCPA Action

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On September 20, a United States District judge for the Northern District of California granted defendant United Recovery System’s motion for attorneys’ fees and costs arising from its successful defense of a lawsuit based on alleged violations of the Fair Debt Collection Practices Act and the California Fair Debt Collection Practices Act, also known as… 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

NY and NJ Render Conflicting FDCPA Decisions Involving Credit Repair Companies

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Debt Buyers & Collectors
Two recent decisions from the Southern District of New York and the District of New Jersey have expressly disagreed about a credit repair company’s dispute of a debt on behalf of a consumer in two Fair Debt Collection Practices Act cases.  In Taylor-Burns v. AR Resources, Inc., plaintiff Tonya Taylor-Burns alleged that the debt collector… 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

Federal District Court Sanctions CFPB for Failing to Provide Knowledgeable Deposition Witness

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On August 25, 2017, the United States District Court for the Northern District of Georgia entered an order granting multiple Defendants’ consolidated motion for sanctions against the Consumer Financial Protection Bureau. Defendants’ Rule 37 motion alleged the CFPB failed to produce a knowledgeable deposition witness and also failed to follow the Court’s various orders to… 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

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

Federal District Court Grants Preliminary Approval of $3.2M TCPA Class Action Settlement

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On August 10, Massachusetts District Court Judge Richard G. Stearns granted preliminary approval of a $3.2 million class settlement agreement in a Telephone Consumer Protection Act class action filed against Collecto, Inc.  The four named plaintiffs allege that Collecto made unauthorized telephone calls to class members’ cellular phones using an automated telephone dialing system in… 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 Settles Claims Against Aequitas Capital Management

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
On August 17, the Consumer Financial Protection Bureau filed a complaint and proposed settlement against Aequitas Capital Management, Inc. and its related entities, alleging that the loan buyer aided the Corinthian Colleges’ predatory lending scheme.  According to the Bureau, Aequitas enabled Corinthian to make high-cost private loans to Corinthian students, giving the impression that the… 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

Oregon District Court Enters Summary Judgment for Collector in Current Account Balance Case

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On August 2, a Federal Court in Oregon entered summary judgment in favor of a collection agency, ruling that a debt collector must disclose to the consumer that interest accrues on an account only when such interest actually does accrue. In Powers v. Capital Management Services, LP, plaintiff Diane Powers incurred a debt for $565.90,… Continue Reading

House Thwarts CFPB’s Arbitration Rule

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
On July 25, the United States House of Representatives voted to repeal the Consumer Financial Protection Bureau’s latest arbitration rule.   As we reported previously, the CFPB issued a final rule banning class action waivers in arbitration provisions for covered entities, as well as requiring the covered entities to provide information to the CFPB regarding any efforts… 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

Join Us for the Credit and Collection News Annual Creditor Grantor Consortium in Washington, DC

Posted in ALL CFS Blog Entries, CFS Events, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
We are pleased to announce that Troutman Sanders partners Ashley Taylor and David Anthony will be featured speakers at the upcoming Credit and Collections News (CCN) Annual Creditor Grantor Summit.  The conference will be held August 14-16, 2017 at the Ritz-Carlton in Georgetown, Washington, DC. Ashley will speak on a panel entitled “Working with Your Attorney… Continue Reading

Join Us on August 17 for a Clear Law Institute Webinar “Game of Phones: Current Trends in Collection Calls under the TCPA, FDCPA, and other Regulatory Frameworks”

Posted in ALL CFS Blog Entries, CFS Events, Debt Buyers & Collectors, State Attorneys General, CFPB, & FTC
Join Troutman Sanders attorneys James Trefil and Jonathan Floyd for a webinar hosted by the Clear Law Institute on August 17 from 1:00 – 2:15 p.m. In this webinar, you will learn to navigate the various layers of rules and regulations that govern the use of debt collection telephone calls. This presentation will focus on… Continue Reading

Fifth Circuit Affirms FDCPA Violation Where Debt Collector Failed to Mark Account as Disputed

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
The Fifth Circuit Court of Appeals recently affirmed summary judgment on a Fair Debt Collection Practices Act claim in favor of a debtor, finding that the debt collector violated the FDCPA when it failed to mark the debtor’s account as “disputed” when the collector reported the account to the bureaus. Plaintiff Robert Sayles sued Advanced… Continue Reading

Debt Collector Prevails by Using Safe Harbor Language on Letters in Current Balance Case

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors
In dismissing a claim against a debt collector, brought under the Fair Debt Collection Practices Act, the U.S. District Court for the Eastern District of Wisconsin found that language used by the debt collector clearly informing the consumer that interest and fees would continue to accrue on the balance did not violate the FDCPA. In… Continue Reading