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Posts published in “Debt Collection”

7th Cir. Holds Debt Collector May Rely on Information from Creditor

Joining with the Fourth and Ninth Circuits, the U.S. Court of Appeals for the Seventh Circuit recently affirmed a trial court’s summary judgment order in favor of a debt collector and against a debtor finding that the debt collector did not violate the federal Fair Debt Collection Practices Act (FDCPA) by only verifying the information in its records instead of contacting the creditor to verify the debt. In so ruling, the Court also held that the debt collector did not violate the federal Fair Credit Reporting Act (FCRA) because it conducted a reasonable investigation into the disputed information. A copy…

ED NY Dismisses FDCPA Claim Based on Non-Disclosure of Potential Fees, Costs

The day before the Second Circuit shut down reverse-Avila claims with its decision in Taylor v. Financial Recovery Services, Inc., the U.S. District Court for the Eastern District of New York dismissed an FDCPA Avila claim involving potential future fees and costs in Derosa v. Computer Credit, Inc. A copy of the opinion is available at:  Link to Opinion. This recent chapter in the post-Avila saga involves a consumer who incurred a small hospital debt. A collector sent a letter that used the words “PAST DUE AMOUNT: $174.15” to inform the consumer of the balance. The letter contained no mention of interest, fees,…

2nd Cir. Cleans Up Interest Disclosure Mess, Upholds Taylor

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…

SD Fla. Holds No FDCPA Violation for Naming Payment Processor, Lender in Debt Validation Notice

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…

3rd Cir. Holds Settlement Offer as to Time-Barred Debt May Violate FDCPA

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…

7th Cir. Holds Debt Collector Violated FDCPA Despite Using Miller Safe Harbor Language

The U.S. Court of Appeals for the Seventh Circuit recently held that “debt collectors cannot immunize themselves from FDCPA liability by blindly copying and pasting the Miller safe harbor language” where that language is inaccurate under the circumstances. Accordingly, the Seventh Circuit reversed the trial court decision granting the debt collector’s motion to dismiss. A copy of the opinion in Boucher v. Finance System of Green Bay, Inc. is available at:  Link to Opinion. The plaintiff debtors were Wisconsin residents who incurred and defaulted on debts for medical services.  Their creditors sold those debts to the defendant collection agency, which in turn…

Use of FTC ‘Approved’ Disclosure No Safe Harbor Against FDCPA Claim

A recent decision from a trial court sitting in Illinois calls into question whether debt collectors can rely on a widely used disclosure when collecting debt that may be subject to an expired limitations period. A copy of the opinion in Richardson v. LVNV Funding, LLC is available at:  Link to Opinion. In 2012 the Federal Trade Commission and Asset Acceptance, LLC entered into a consent decree to resolve an enforcement action that included allegations that Asset’s debt collection activities violated the federal Fair Debt Collection Practices Act. The consent decree provided that when collecting “time-barred” debt not subject to credit reporting,…

11th Cir. Rejects Challenge to Debtors’ Ability to Recover Attorney’s Fees in Stay Violation Actions

The U.S. Court of Appeals for the Eleventh Circuit recently held, in a case of first impression, that “the Bankruptcy Code authorizes payment of attorneys’ fees and costs incurred by debtors in successfully pursuing an action for damages resulting from the violation of the automatic stay and in defending the damages award on appeal.” A copy of the opinion in Mary Beth Mantiply v. Patricia Nelson Horne is available at:  Link to Opinion. Husband and wife filed for Chapter 7 bankruptcy in 2011 and received a discharge five months later. The husband passed away and his daughter was substituted as personal…

9th Cir. Holds FDCPA Preempts State Judgment Execution Laws

The U.S. Court of Appeals for the Ninth Circuit recently held that the federal Fair Debt Collection Practices Act preempted state judgment execution law insofar as it permitted debt collectors to execute on FDCPA claims. In so ruling, the Court held that debt collectors cannot evade the restrictions of federal law by obtaining a collection judgment against the debtor, and then forcing the debtor’s FDCPA claims to be auctioned, acquiring the claims, and dismissing them. A copy of this opinion Arellano v. Clark Cty. Collection Serv. is available at:  Link to Opinion. The debtor incurred a medical debt, and then failed…

Debt Collection Rulemaking on Hold Amid CFPB Rancor

The future of federal rules covering debt collection has been thrown into doubt amid the leadership change at the Consumer Financial Protection Bureau. In one of his first actions since taking the helm of the CFPB as acting director, Mick Mulvaney announced a halt on all Bureau rulemaking, reported Reuters. It has been more than four years since the CFPB announced plans to propose the first-ever rules regulating debt collectors subject to the federal Fair Debt Collection Practices Act. Last year it issued an outline of what those rules might look like. The Bureau had indicated earlier this year that…

Missouri Supreme Court Holds Statutory Post-Judgment Interest Allowed for All Non-Tort Actions

The Supreme Court of Missouri recently affirmed, in part, a trial court order dismissing two debtors’ petitions attempting to assert violations of the federal Fair Debt Collection Practices Act and the Missouri Merchandising Practices Act against a hospital for failure to state a claim, holding that judgments in non-tort actions include post-judgment interest as a matter of law pursuant to § 408.040.1 even if the judgment does not expressly include post-judgment interest. A copy of the opinion in Dennis v. Riezman Berger, PC is available at:  Link to Opinion. A hospital provided medical services to the debtors.  After the debtors failed to…

11th Cir. Holds V-Mail Asking Debtor to Call Back is FDCPA ‘Communication,’ But Callers Needn’t Provide Names

The U.S. Court of Appeals for the Eleventh Circuit recently held that a voicemail from a debt collector that merely asks for the debtor to call back constitutes an initial communication under the federal Fair Debt Collection Practices Act (FDCPA) requiring the so-called “mini-Miranda” warning. In so ruling, the Court also held that a debt collector employee does not need to reveal his or her name to provide “meaningful disclosure” of the caller’s identity. A copy of the opinion in Hart v. Credit Control, LLC is available at:  Link to the Opinion. The defendant debt collector left a voicemail for the…