Just over two years to the day after it issued its opinion in Avila v. Riexinger & Associates, LLC, the Second Circuit Court of Appeals has issued a critical blow to a recent spate of FDCPA lawsuits attempting to create liability out of thin air. A copy of the opinion in Taylor v. Financial Recovery Services is available at: Link to Opinion. In Avila, the Second Circuit held that a debt collector violates the FDCPA by stating the “current balance” of a consumer’s debt without disclosing that the balance is increasing due to the accrual of interest or fees. In Avila, the debt…
Posts published in March 2018
The U.S. District Court for the Southern District of Florida recently granted summary judgment in favor of a defendant debt collector in a putative class action alleging violations of sections 1692g and 1692e of the federal Fair Debt Collection Practices Act (FDCPA), holding that the “debt validation notice” letter at issue was neither confusing nor misleading under the applicable least sophisticated consumer standard. In so ruling, the Court held that naming the payment processing company with whom the consumer had dealt, as well as the bank that had actually issued the credit at issue, did not violate the FDCPA. A…
The U.S. Court of Appeals for the Ninth Circuit recently held that the National Bank Act (NBA) did not preempt California’s state escrow interest law, which requires financial institutions to pay at least 2 percent simple interest per annum on escrow account funds. In so ruling, the Court also held that the federal Truth in Lending Act provisions for escrow accounts, at 15 U.S.C. § 1639d, did not apply to loans originated before the 2013 effective date of the provisions. A copy of the opinion in Lusnak v. Bank of America is available at: Link to Opinion. In July 2008, the…
The U.S. District Court for the Southern District of Florida recently denied a borrower’s motion to exclude testimony of an insurer’s expert regarding the reasonableness of lender-placed insurance premiums levied upon the borrower’s mortgage loan. In so doing, the Court rejected the borrower’s argument that the expert testimony failed to address claims that the insurer colluded with its mortgage servicer to inflate insurance premiums, concluding that the borrower’s objection goes to the weight, rather than the admissibility of the testimony, and that testimony concerning the insurer’s compliance with applicable rules, regulations and industry standards would assist the trier in fact.…
The U.S. Court of Appeals for the Sixth Circuit held that a plaintiff asserting only a bare violation of the federal Fair Debt Collection Practices Act (FDCPA) failed to identify a cognizable injury traceable to the defendant’s alleged conduct, and therefore failed to demonstrate Article III standing. In so ruling, the Sixth Circuit reversed the trial court, and dismissed the appeal and underlying case for lack of jurisdiction. A copy of the opinion in Hagy v. Demers & Adams is available at: Link to Opinion. After the borrowers defaulted on their mortgage loan, the loan servicer initiated foreclosure proceedings against them. Subsequently,…
In July of 2015 the Federal Communications Commission handed down an order that unreasonably expanded the reach of the 1991 Telephone Consumer Protection Act, exposing any business using a telephone to the risk of TCPA liability. A decision from the United States Court of Appeals for the District of Columbia in ACA International v. FCC, et al. serves to undo some of the damage caused by the FCC’s order. Among the restrictions provided for by the TCPA, it was those portions of the Act which prohibited the use of an “automatic telephone dialing system” that were adversely impacted by the 2015 order.…
In the action seeking review of the Federal Communications Commission’s 2015 TCPA Order, the U.S. Court of Appeals for the District of Columbia ruled today that: The FCC’s ruling as to the types of calling equipment that fall within the TCPA’s restrictions would “subject ordinary calls from any conventional smartphone to the Act’s coverage, an unreasonably expansive interpretation of the statute.” This portion of the FCC’s 2015 TCPA Order was set aside and vacated. The FCC’s “approach to calls made to a phone number previously assigned to a person who had given consent but since reassigned to another (nonconsenting) person” —…
The U.S. Court of Appeals for the Ninth Circuit recently affirmed the dismissal of a consumer’s putative class action alleging willful violations of the federal Fair Credit Reporting Act (FCRA) for lack of standing under Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). In so ruling, the Court held that merely printing a credit card receipt without redacting the card’s full expiration date did not allege the concrete injury required, where no second receipt existed, the consumer did not lose the receipt, nobody stole the receipt, and nobody stole the consumer’s identity. A copy of the opinion in Bassett…
The U.S. Court of Appeals for the Tenth Circuit recently affirmed summary judgment in favor of an insurance company, holding that the insurer had no duty to defend and indemnify its insured in a lawsuit alleging that the provider’s telemarketing phone calls violated several federal and state laws, because statutory damages and injunctive relief under the Telephone Consumer Protection Act (TCPA) are uninsurable penalties — not damages — under Colorado law and the insurance policies at issue. A copy of the opinion in ACE American Insurance Company v. Dish Network is available at: Link to Opinion. The federal government and five…
The California Court of Appeal, Fourth District, recently reversed summary judgment awarded in favor of the defendant based on violations of the California Invasion of Privacy Act, which prohibits the recording of confidential communications without the knowledge or consent of the other party, and the intentional recording of communications using a cellular or cordless telephone. In so ruling, the Appellate Court held that the defendant could not establish that it lacked the requisite intent to violate the Privacy Act, because the defendant’s full-time “always on” recording system recorded all calls on the company phones regardless of whether the calls were…
The Massachusetts Supreme Judicial Court recently held that the “statutory power of sale” as defined in M.G.L. ch. 181, § 21 was incorporated by reference in a lender’s form reverse mortgage instrument even though the lender used the term “power of sale” rather than the specific term “statutory power of sale.” Accordingly, the SJC ruled, the lender was able to utilize the Massachusetts statutory power of sale. A copy of the opinion in James B. Nutter & Company v. Estate of Murphy is available at: Link to Opinion. In 2007 and 2008, three elderly borrowers each obtained loans from the same lender…
The U.S. Court of Appeals for the Third Circuit held that a collection letter sent to collect a time-barred debt that makes a “settlement offer” to accept payment “in settlement of” the debt could potentially violate the federal Fair Debt Collection Practices Act’s (FDCPA) general prohibition against “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Accordingly, the Third Circuit vacated the ruling of the trial court dismissing the complaint, and remanded the matter for further proceedings. A copy of the opinion in Tatis v. Allied Interstate, LLC is available…