The Eighth Circuit Court of Appeals recently decided a case involving a debt collector that had verified the existence of a debt in response to a consumer reporting agency’s inquiry, even though the debtor had allegedly disputed the debt to the same reporting agency. The Eighth Circuit affirmed the lower court’s ruling that the debtor
Federal Court Rejects Unconscionability Argument in Forcing Debt Collection Arbitration
On January 20, a Missouri federal judge issued an order granting a debt collector’s Motion to Compel Arbitration in an action under the Fair Debt Collection Practices Act. Although such motions are frequently granted, the judge here rejected an argument from the plaintiff that her loan agreement – including its arbitration provision – was entirely
Retailer Hit With Second FCRA Class Action Pertaining to Background Checks
On January 28, Michael’s Stores, Inc. was hit with its second Fair Credit Reporting Act (FCRA) class action lawsuit challenging Michael’s employment background check procedures in as many months. This lawsuit should serve as another reminder to employers to verify their background check procedures comply with both state and federal law.
According to the allegations
Seventh Circuit Hears Class Action Suit Against Neiman Marcus Over Data Breach
On January 23, the Seventh Circuit Court of Appeals heard oral arguments in a class action suit against Neiman Marcus Group LLC over the alleged 2013 hack that compromised the credit card numbers of 350,000 shoppers.
The suit was one of multiple proposed class actions filed after hackers infiltrated Neiman Marcus’ payment security system with
Federal Judge Throws Out Debt Collection Class Action
On January 21, the U.S. District Court for the Eastern District of Pennsylvania struck a class action under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”) and the Telephone Consumer Protection Act of 1991, 47 U.S.C. §§ 227 et seq. (“TCPA”). Although the judge allowed the lead plaintiff to pursue
CFPB Issues Bulletin Advising Entities Undergoing Regulatory Exams Not To Share Information With Third Parties Or Withhold Information From the CFPB
On January 28, 2015, the Consumer Financial Protection Bureau issued a bulletin warning financial institutions about entering into agreements with third parties that share or hide information related to regulatory exams, as well as warning entities under investigation about sharing information with third parties.
The bulletin is intended to assist supervised entities in complying with
Coalition Urges New York City to Ban Use of Credit Checks in Hiring
On January 15, the NYC Coalition to Stop Credit Checks in Employment published an open letter to New York City Mayor de Blasio and the City Council, urging them to support legislation banning the use of credit checks in employment decisions. To the extent New York City enacts such a law, it would create
FTC Shows Texas-based Debt Collector ‘the Horns’ by Filing Suit Alleging Illegal Collection Tactics
On January 20, 2015, the Department of Justice, on the Federal Trade Commission’s behalf, filed a complaint against Commercial Recovery Systems, Inc. (CRS), a Texas-based debt collector, including its current and former principals, for allegedly using illegal tactics, such as threatening consumers with false claims of lawsuits and potential garnishments, in the United States District
CFPB to Promulgate New Overdraft Rules in the New Year
New rules on overdraft protections and fees are one of the top items on the CFPB regulatory agenda this year. In its Fall 2014 Rulemaking Agenda, the CFPB noted that they were “continuing to research overdraft services and considering whether rules governing overdraft and related services are warranted and what such rules may be”
New FCRA Lawsuit Demonstrates Growing Trend of Consumers Challenging Employer Disclosure Forms
A new putative class action lodged in California federal court against Paramount Pictures Corporation made it the latest employer to be accused of violating the Fair Credit Reporting Act by obtaining credit reports from current and prospective employees without adequate disclosure of their rights under the FCRA. The lawsuit alleges that the company has a