New data from WebRecon reflects an increase in the number of consumer finance lawsuits filed during the month of May. After a sharp decline in the number of Fair Debt Collection Practices Act, Telephone Consumer Protection Act, and Fair Credit Reporting Act lawsuits filed during the month of April, May saw a roughly 30% increase
Supreme Court Refuses to Extend the Scope of the FDCPA to Consumer Finance Company
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
CFPB Updates Its Planned Overhaul of Acceptable Debt Collection Practices
In July of 2016, the Consumer Financial Protection Bureau released an outline of new rules targeting third-party debt-collection operations. The new rules targeted various areas including: Debt validation, Limits on Contact, Consumer Disputes, and Deceased Consumers. At the time, the CFPB stated it planned to release rules relevant to first-party creditors at a later
FTC Obtains Judgments Against Defendants Who Initiated Billions of Illegal Robocalls
On May 31, a California Federal District Court approved default judgments against ten defendants for violations of the Federal Trade Commission Act, 15 U.S.C. § 45 et seq., (“FTC Act”), and Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. § 6105 et seq., (“Telemarketing Act”). The case is Federal Trade Commission v. Aaron
Insurance Company Settles Nationwide TCPA Class Action for $4.25M
On May 31, plaintiffs Jim Youngman and Robert Allen filed a motion for preliminary approval of class action settlement for their pending Telephone Consumer Protection Act action against Florida-based insurance company A&B Insurance and Financial Inc. The case is Youngman v. A&B Insurance and Financial, Inc., No. 6:16-cv-01478-CEM-GJK (M.D. Fla. May 18, 2017).
U.S. Supreme Court Scoffs at Kentucky Supreme Court’s Decision to Disregard Federal Arbitration Act
On May 15, the United States Supreme Court reversed and remanded a state court decision that invalidated an arbitration agreement. In a visceral 7-1 decision, the Supreme Court sent a clear message to Kentucky that the state cannot circumvent the Federal Arbitration Act (“FAA”) merely because the court does not like arbitration clauses.
In Kindred
Court Rejects Bona Fide Error Defense for Collector Who Failed to Maintain Policies and Procedures
On May 8, an Arizona federal judge held that a defendant debt collector was not entitled to a “bona fide error” defense in a claim brought under the Fair Debt Collection Practices Act because the collector failed to show it had either a policy or procedure in force to address the specific error in the
CFPB Sues Law Firms for Debt Relief Fees Disguised as Bankruptcy Fees
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.”
Validation Notice Including Request for Payment and Identifying Creditor by Acronym Does Not Violate FDCPA
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]
West Virginia Federal Court First Reconsiders, Then Restricts, Vicarious Liability for TCPA Claims in MDL
The United States District Court for the Northern District of West Virginia recently reversed its position on vicarious liability under the Telephone Consumer Protection Act, granting summary judgment for defendants UTC Fire and Security Americas Corporation, Inc. and Honeywell International, Inc. in multi-district litigation. In doing so, the court joined the growing list of federal