The U.S. Court of Appeals for the Seventh Circuit recently affirmed judgment in favor of two debt collectors and against a debtor for his claims arising under the federal Fair Debt Collection Practices Act (FDCPA) and the Wisconsin Consumer Act (WCA). In so ruling, the Court held that the debtor did not create a triable issue of material fact to overcome summary judgment because he failed to present sufficient evidence that the transactions comprising the credit card debt on the underlying account were for “personal, family, or household purposes,” and therefore that the debt was a “consumer debt” subject to…
Posts published in “Debt Collection”
Lavallee v. Med-1 Solutions, LLC from the U.S. Court of Appeals for the Seventh Circuit examines whether an email from a debt collector was an “initial communication” and if it was, whether a clickable hyperlink serves as a proper means of providing the validation notice mandated by section 1692g(a) of the federal Fair Debt Collection Practices Act. These disclosures, sometimes called the “validation notice,” can be contained in what the FDCPA refers to as the “initial communication” or provided “in writing” within five days of the initial communication. While the debt collector was found to have violated the FDCPA, the decision…
The U.S. Court of Appeals for the Second Circuit recently affirmed the dismissal of a claim under the federal Fair Debt Collection Practices Act holding that an FDCPA violation occurs, for the purposes of the FDCPA’s one year statute of limitations, when an individual is injured by the alleged unlawful conduct. In so ruling, the Second Circuit clarified that in Benzemann v. Citibank N.A., 806 F.3d 98 (2d Cir. 2015), it did not intend to expand the FDCPA’s statute of limitations by requiring individuals to be injured and receive “notice of the FDCPA violation.” A copy of the opinion in Benzemann…
The U.S. Court of Appeals for the Ninth Circuit recently reversed the dismissal of a putative class action under the federal Telephone Consumer Protection Act finding that the plaintiff adequately alleged that the defendant placed calls using an automated telephone dialing system. In so ruling, the Ninth Circuit joined with a similar ruling by the Fourth Circuit, and held that the TCPA’s exception for calls “made solely to collect a debt owed to or guaranteed by the United States” was incompatible with the First Amendment and severed the exception as an unconstitutional restriction on speech. A copy of the opinion in…
Distinguishing contrary rulings from the Eighth and Eleventh Circuits, the U.S. Court of Appeals for the Seventh Circuit recently held that a debt collector’s percentage fee was recoverable under the language of a contract that required the consumer to pay “any costs (including reasonable attorney’s fees) incurred by [the creditor] in attempting to collect amounts due.” A copy of the opinion in Bernal v. NRA Group, LLC is available at: Link to Opinion. A consumer bought a monthly pass to Six Flags amusement parks. The contract stated that if the buyer failed to make the required monthly payments, he would…
The Consumer Financial Protection Bureau has announced it will allow more time for comments on its Notice of Proposed Rulemaking to implement the Fair Debt Collection Practices Act. The CFPB has extended the comment period by 30 days to Sept. 18. Years in the making, if adopted the proposed rules would bring significant changes to the form and manner of consumer debt collection subject to the FDCPA. According to the CFPB, its proposal “would set clear, bright-line limits on the number of calls debt collectors may place to reach consumers on a weekly basis; apply prohibitions on harassment or abuse, false…
In an unreported opinion, the Court of Appeal for the First District of California recently held that a debt collector that violated the minimum type-size requirement for collection letters under Cal. Civil Code § 1812.701(b) may utilize the procedure for curing violations under California’s Rosenthal Fair Debt Collection Practices Act to correct its violations. However, the Appellate Court reversed the dismissal because the trial court should have allowed the consumer to amend the complaint or locate a suitable class representative after granting summary judgment in favor of the debt collector on her individual claim. In so ruling, the Court also…
In determining the legal standard for holding a creditor in civil contempt for attempting to collect a debt in violation of a bankruptcy discharge order, the Supreme Court of the United States adopted an “objectively reasonable” standard, and held that a court may hold a creditor in civil contempt if there is “no fair ground of doubt” as to whether the order barred the creditor’s conduct. Accordingly, the Supreme Court reversed the Ninth Circuit’s ruling, which had applied a subjective standard for civil contempt. A copy of the opinion in Taggart v. Lorenzen is available at: Link to Opinion. The…
On April 30, Washington Gov. Jay Inslee signed into law Substitute House Bill 1531 which places new requirements on medical debt collectors. The new provisions go into effect July 28, 2019. The new law requires medical debt collectors to inform consumers in the initial written communication of the right to request the original account number, date of last payment and an itemized statement regarding the debt. For hospital debt, the communication must also notify consumers they “may be eligible for charity care from the hospital, together with the contact information for the hospital.” Upon an oral or written request for…
The U.S. Court of Appeals for the Seventh Circuit recently affirmed a trial court’s ruling that a debtor lacked Article III standing to sue a debt collector for failing to notify her in its debt validation letter that to trigger the federal Fair Debt Collection Practices Act’s protections she had to communicate a dispute in writing because the only harm she suffered was receiving the incomplete letter. In so ruling, the Seventh Circuit created a circuit split on this issue as in Macy v. GC Services Limited Partnership, 897 F.3d 747 (6th Cir. 2018), where the Sixth Circuit held under…
The U.S. Court of Appeals for the Seventh Circuit recently affirmed two trial court rulings in favor of a debt collector and against the debtors holding that correspondence which identified “the name of the creditor to whom the debt is owed” as the original creditor instead of the current creditor did not violate the federal Fair Debt Collection Practices Act because it accurately disclosed the only creditor to whom the debtors owed their debt sufficient for the unsophisticated consumer to understand. A copy of the opinion in Smith v. Simm Associates, Inc. is available at: Link to Opinion. In both cases, a…
The Texas Legislature has passed House Bill 996 which limits when a debt buyer can initiate legal action or arbitration to collect consumer debt and requires specific notices with respect to out-of-statute debt. Upon approval by Texas Gov. Greg Abbott, the new provisions will become effective Sept. 1, 2019. Definition of a Debt Buyer “Debt buyer” is defined as “a person who purchases or otherwise acquires a consumer debt from a creditor or other subsequent owner of the consumer debt, regardless of whether the person collects the consumer debt, hires a third party to collect the consumer debt, or hires…