The U.S. Court of Appeals for the Third Circuit recently held, in a matter of first impression among all of the Courts of Appeals, that a debt collector bears the burden of proving that a communication with a third party falls within the exception for location information contained in subsection 1692b of the federal Fair Debt Collection Practices Act (FDCPA). A copy of the opinion is available at: Link to Opinion. In 2005, a borrower obtained a loan in the amount of $43,300 secured by a mortgage. The mortgage went into default in 2011. The borrower called the mortgage servicer…
Posts published in “FDCPA”
Fair Debt Collection Practices Act
The U.S. Court of Appeals for the Second Circuit recently reversed the dismissal of a consumer’s claim alleging that a mortgage loan servicer violated the federal Fair Debt Collection Practices Act by sending a servicing transfer notice that did not contain the disclosures required under the FDCPA, 15 U.S.C. 1692g. A copy of the opinion is available at: Link to Opinion. The borrower argued that the defendant mortgage servicer violated the FDCPA by sending him two written communications: (1) a RESPA transfer of servicing notice, informing the borrower that the mortgage servicer had become the servicer for the borrower’s mortgage…
Furnishing information during and after a consumer bankruptcy is a complex task, and implicates the Bankruptcy Code, Fair Credit Reporting Act and Fair Debt Collection Practices Act. Recent litigation suggests that both the content and the timing of the furnished information poses unique risk to the credit and collections industry. And a recent string of lawsuits is raising the stakes on information furnished prior to bankruptcy. On Aug. 19 at 2 p.m. Eastern, we will offer our take on the top issues coming out of recent decisions and what you can do to contain risk and enhance your credit reporting…
The U.S. Court of Appeals for the Third Circuit recently held that a false statement in a communication from a debt collector must be “material” to be actionable under the FDCPA. In so ruling, the Court found that materiality was a part of the “least sophisticated debtor” analysis. A copy of the opinion is available at: Link to Opinion. In that case, a debt collector had purchased credit-card debt from the original lender. That debt collector then hired a law firm to help collect the debt. The law firm then filed suit to collect the debt. In that underlying case, the law…
The United States Bankruptcy Appellate Panel for the Eighth Circuit recently held that filing a proof of claim on a time-barred debt is not, alone, a prohibited debt collection practice under the federal Fair Debt Collection Practices Act. A copy of the opinion is available at: Link to Opinion. Husband and wife debtors filed a Chapter 13 bankruptcy petition. A medical services provider filed a proof of claim shortly thereafter. After their Chapter 13 plan was confirmed, the debtors filed an adversary proceeding against the medical services provider for damages under the FDCPA, arguing that because the debt was time…
A QR code visible on the face of an envelope embedded with an account number violates the Fair Debt Collection Practices Act, according to a recent decision from the United States District Court for the Middle District of Pennsylvania. A QR or “Quick Response” code is a type of bar code that can contain any sort of information. But the information is not visible, instead the QR code looks more like a jumble of black and white lines or boxes. You can’t do much with a QR code unless you have a device that can read the code. QR Codes…
The U.S. Court of Appeals for the Eleventh Circuit recently affirmed the dismissal of a borrower’s allegations under the federal Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act as to one letter, the purpose of which was to request additional information, but reversed as to two other letters, holding that they were sent in connection with the collection of a debt. A copy of the opinion is available at: Link to Opinion. The plaintiff’s mortgage loan went into default and the law firm representing the lender sent the borrower three letters. Two weeks later, the borrower…
The Maryland Court of Special Appeals recently held that a borrower could not maintain a lawsuit asserting federal Fair Debt Collection Practices Act and other related state-law claims because those claims were barred by collateral estoppel due to litigation in a prior collection action. In so ruling, the Court held that the doctrine of res judicata did not necessarily bar the borrower from narrowly attacking the means used to collect the debt under the FDCPA and state law, rather than attacking the validity of the debt itself, because the FDCPA and related state-law allegations gave rise to new and different…
The Eleventh Circuit Court of Appeals recently handed down a decision that went too far in holding that all litigation related activity is subject to the FDCPA. The decision in Miljkovic v. Shafritz & Dinkin, P.A., et al., is available here. In pursuing their client’s judgment, an attorney and law firm obtained a garnishment against Nedzad Miljkovic. Miljkovic filed a claim for exemption in response, which the creditor, through its attorneys, disputed in a sworn reply. However, the writ was eventually dissolved on the creditor’s attorney’s motion after Miljkovic provided discovery showing that his wages were exempt from garnishment under section 222.11(2), Florida Statutes. Miljkovic Sues…
The U.S. Court of Appeals for the Eleventh Circuit recently held that the FDCPA applies to litigation activity, even when the debt collector’s conduct is directed at someone other than the consumer, such as the court or the debtor’s counsel. A copy of the opinion is available at: Link to Opinion. A creditor obtained a money judgment against a debtor, and then sought and obtained a continuing writ of garnishment on the debtor’s wages in order to collect the debt. In response, the debtor filed a claim of exemption, which the creditor disputed in a sworn reply. However, the writ…
The U.S. Court of Appeals for the Eighth Circuit recently affirmed the dismissal of a debtor’s federal Fair Debt Collection Practices Act (FDCPA), federal Fair Credit Reporting Act (FCRA), and state law claims where a debt collector for a major bank pulled the debtor’s credit report and served a garnishment summons after the debtor allegedly had sent a cease-and-desist letter to the debt collector. In so ruling, the Court confirmed that: (1) a debt collector may pull a debtor’s credit report for collection purposes, and that the debt collector did not need to notify the debtor before reviewing such information;…
The Seventh Judicial Circuit Court of Florida recently denied a motion to dismiss a borrower’s counterclaims alleging violations of the Florida Consumer Collections Practices Act (FCCPA) against the owner of a mortgage loan, based on alleged communications by the servicer and foreclosure counsel with a debtor supposedly known to be represented by counsel and attempting to collect an allegedly invalid debt. In so ruling, the Court also held: Merely foreclosing on a mortgage, without more, did not constitute “debt collection” under the FDCPA; False statements regarding a debt made to a court instead of directly to the debtor are not…