Debt Buyers + Collectors

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More than two years after the Supreme Court released its ruling in Facebook v. Duguid, confirming the meaning of automatic telephone dialing systems (ATDS) under the Telephone Consumer Protection Act (TCPA), a plaintiff has filed a petition for a writ of certiorari to the Supreme Court to challenge the Ninth Circuit’s application of the Facebook decision. The Facebook ruling effectively closed the door on one of the broadest classes of TCPA-related litigation; since then, plaintiff-side advocates have worked ceaselessly, though largely unsuccessfully, to chip away at the ruling. If the Supreme Court accepts the appeal, this will represent a significant development in the ongoing saga of ATDS litigation.

On June 29, 2023, the Federal Communications Commission (FCC or Commission) issued a notice of proposed rulemaking clarifying how consumers may revoke consent to receive calls or texts under the Telephone Consumer Protection Act (TCPA). The FCC is accepting comments on the proposed rule until July 31, 2023.

On June 28, a magistrate judge in the U.S. District Court for the Southern District of Ohio issued a report recommending that the defendant’s motion to dismiss be denied because the plaintiff had standing under the Telephone Consumer Protection Act (TCPA) even though the calls in question were not intended for the plaintiff.

On June 16, Nevada Governor Joe Lombardo signed into law Senate Bill 276, which significantly amended Nevada Revised Statute 649, otherwise known as the Nevada Collection Agencies Licensing Act (the Act). The Act regulates the activities of “collection agencies,” or any person “engaging, directly or indirectly, and as a primary or a secondary object business or pursuit, in the collection of or in soliciting or obtaining in any manner the payment of a claim owed or due or asserted to be owed or due to another.” Among other things, Senate Bill 276 expanded the exemptions from the collection agency licensing requirement to include entities that are not debt collectors under § 1692a(6)(A) – (F) of the Fair Debt Collection Practices Act (FDCPA). From a practical perspective, these expanded licensure exemptions should result in many first-party servicers no longer needing to obtain a Nevada collections license. Highlights of Senate Bill 276 include:

In a matter involving the bona fide error defense to claims asserted under the Fair Debt Collections Practices Act (FDCPA), an Indiana court of appeals reversed a trial court’s order granting summary judgment in favor of the defendant debt collector holding that the defense did not apply because the mistake at issue was not of…

Last week, the Ninth Circuit Court of Appeals affirmed a lower court’s denial of preliminary injunctive relief to plaintiffs challenging Nevada Senate Bill 248 (S.B. 248), which places new restrictions on the collection of consumer medical debt. In doing so, the court found the bill neither ran afoul of the First Amendment, nor was preempted by the federal Fair Debt Collection Practices Act (FDCPA) or Fair Credit Reporting Act (FCRA). Read on for further analysis.

By way of background, S.B. 248 amended chapter 649 of the Nevada Revised Statutes governing debt collection agencies. Passed in response to the uptick in needed medical care caused by the COVID-19 pandemic, S.B. 248 was designed to protect Nevada consumers from potential financial ruin caused by medical debt by imposing new restrictions on the collection of such debt. Among other provisions of the bill, § 7 requires debt collection agencies to send written notification to medical debtors 60 days before taking any action to collect such debt (Section 7 Notice). The Section 7 Notice must inform the debtor that the “medical debt has been assigned to the collection agency” for collection or that the “collection agency has otherwise obtained the medical debt for collection.” During the 60-day period following the notice, a collection agency cannot take “any action to collect a medical debt.” Voluntary payments during the 60-day period are permitted, but a debt collector must disclose to the debtor that “payment is not demanded or due,” and that the “medical debt will not be reported to any credit reporting agency during the 60-day notification period.” Implementing regulations define “action to collect a medical debt” as “any attempt by a collection agency or its manager or agents to collect a medical debt from a medical debtor” and provide examples of what are, and are not, “attempts” to collect such debt.

On June 8, the Consumer Financial Protection Bureau (CFPB) announced that it had entered a consent order against medical debt collector Phoenix Financial Services for alleged violations of the Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA).

According to the CFPB, Phoenix sent collection letters to consumers who had disputed the…

In Schmitt v. Security National Servicing Corporation, the plaintiff filed a class action complaint alleging violations of the Fair Debt Collection Practices Act (FDCPA) and Ohio Residential Mortgage Lending Act (RMLA) premised on the assertion that her loan documents did not provide for the imposition of late fees after acceleration of the loan. The…

Nearly two years after the Supreme Court’s 2021 decision in Transunion v. Ramirez, courts and litigants continue to grapple with standing issues in Fair Debt Collection Practices Act (FDCPA) cases brought by plaintiffs alleging intangible harms to reputation and privacy interests. Prominent among these post-Ramirez FDCPA cases was Hunstein v. Preferred Collection &…

In Bemero v. Lloyd & McDaniel, PC, the U.S. District Court for the Northern District of Illinois granted a motion to dismiss in a Federal Debt Collection Practices Act (FDCPA) case where the Model Validation Notice (MVN) was undated, finding the plaintiff lacked standing because she did not allege a concrete injury.

The defendant…