The Consumer Financial Protection Bureau has issued its Consumer Response Annual Report which includes complaints related to debt collection. As it did in its Annual Report on Debt Collection issued on March 20, the CFPB again represents having received “approximately 31,100 debt collection complaints” in 2013. This number, however, is far greater than the number of debt collection complaints appearing in its public database. So where are the missing complaints? Last week Eric Rosenkoetter of the National Association of Retail Collection Attorneys provided some of his thoughts on where the missing CFPB complaints may have gone. Listen to Eric, David Reid of DBA…
The New Jersey Appellate Division held in a surprising decision that a retail-branded credit card was time barred by its four year statute of limitations for the sale of goods. Trial Court Applied Six Year Statute A debt buyer filed a complaint in July 2012 to recover a defaulted store-branded credit card. The debtor counterclaimed under the Fair Debt Collection Practices Act arguing that the purchases she made with her card represented the sale of goods and since she defaulted in August of 2006, the debt buyer’s claim was time barred by New Jersey’s Uniform Commercial Code Article 2-725. The trial court…
The Telephone Consumer Protection Act requires a call placed to a cellular phone using an autodialer[ref]Presumably there was no dispute that the “autodialer” used here was an “automatic telephone dialing system” under the TCPA. The TCPA regulates the use of an ATDS to contact a cellular phone when collecting debt.[/ref], to have the prior express consent of the person who received the call, the Eleventh Circuit Court of Appeals held this past Friday. In Osorio v. State Farm Bank, debt collection calls were made to a cellular phone line subscribed to by Fredy Osorio.The intended recipient of the calls was Osorio’s long-time cohabitant, Clara Betancourt.…
According to a blog post made by Federal Communications Commissioner Michael O’Rielly, immediate changes are needed to the Telephone Consumer Protection Act to address the flood of litigation caused by its own “complex and unclear” rules. Citing changes in business models and methods of communications he notes that the FCC’s rules have become “complex and unclear” and suggests that clarification would benefit all parties impacted by the TCPA. Another concern voiced by the Commissioner is the fact that TCPA complaints have increased by 30 percent in the past year and that there is a growing backlog of petitions to the FCC…
The Consumer Financial Protection Bureau released a report today outlining its efforts and objectives in regulating, supervising and enforcing against debt collectors. The report is available here. Past CFPB reports have provided guidance on where the bureau might be headed in its regulation, supervision and enforcement efforts. This year’s report is no different. It notes the growth of medical and student loan debt collection. Expect more focus on these sectors right away. In addition the report examines: consumer complaints the CFPB and the Federal Trade Commission have received over the past year their enforcement activities the bureau’s supervision of debt collectors the bureau’s rulemaking,…
Earlier this week the Seventh Circuit Court of Appeals issued its opinion in the consolidated appeals of McMahon v. LVNV Funding, LLC and Delgado v. Capital Management Services, L.P., concerning the collection of time barred debt without the threat of litigation. The result is not good for the credit and collections industry, principally because it further confuses application of the Fair Debt Collections Practices Act across the nation. Background In both cases the debt collectors offered to settle the debts, without mention of a lawsuit or any legal action. Both suits claimed that the letters were false, deceptive and misleading, in violation…
The Federal Trade Commission reported yesterday that on Feb. 24, it obtained an ex parte temporary restraining order from a New York federal court freezing the assets of Federal Check Processing, Inc. and related entities. The TRO also appointed a temporary receiver for the defendants pending a hearing on March 17. According to the FTC’s press release, the defendants used company names suggesting a government affiliation such as Federal Recoveries, LLC, Federal Check Processing, Inc, Federal Processing Services, Inc., Nationwide Check Processing, and State Check Processing, Inc. In addition to the allegedly deceptive names of the companies, the FTC alleges that the defendants…
Recent remarks from Consumer Financial Protection Bureau Deputy Director Steven Antonakes indicate that the CFPB remains particularly interested in data integrity during debt collection. Speaking at the National Community Reinvestment Coalition Annual Conference in Washington yesterday, Antonakes said the bureau is “concerned that the accuracy of account information degrades as it passed on from the original creditor to debt collection firms or debt buyers.” Antonakes also suggested that improvements in data integrity will further the bureau’s efforts “to ensure that collectors are seeking to recover debts from the right person in the right amounts.” Concerns over data integrity are consistent with the bureau’s policy statement in its…
A jurist praised by the New York Times for his administration of credit card collection cases was recently the subject of a harsh rebuke from a New York appellate court for the same judicial practices.
The Consumer Financial Protection Bureau today announced that 1st Alliance Lending, LLC, a mortgage lender, was assessed a civil monetary penalty of $83,000, arising from illegally splitting real estate settlement fees. In Yes, the CFPB is Serious About Self-Reporting!, I commented last August that the bureau is encouraging regulated entities to self-report, even if unsure whether their conduct violates law. Previously, self-reporting by US Bank had led the CFPB to forgo imposing a civil money penalty against that institution. While today’s announcement includes a civil monetary penalty, it is small compared to the tens of millions in penalties imposed by the bureau…
For several years my attorney ethics presentations and papers have emphasized that lawyer supervision and particularly non-lawyer supervision, in my experience, is an area of concern for attorneys who practice debt collection law. A recent opinion from New York’s Appellate Division, Second Department, concerning the conduct of a debt collection law firm provides an example of the harm that may result from less than robust supervision of attorneys and non-attorney staff. Attorneys who practice debt collection are probably the most “compliance-aware” branch of lawyers today. They are routinely subject to client audits of their practices’ operations and financial records. Some even have ISO…
Speaking as an invited guest to a conference of the Mortgage Bankers Association yesterday in Orlando, Steven Antonakes, deputy director of the Consumer Financial Services Bureau, told the industry group he was “deeply disappointed” by their lack of progress in improving the mortgage servicing industry. Noting that “too many [mortgage] customers continue to receive erratic and unacceptable treatment,” Antonakes added that “[t]his kind of continued sloppiness is difficult to comprehend and not acceptable.” Pointing to the bureau’s new mortgage rules, which became effective Jan. 10, Antonakes warned the mortgage servicers “it is time for the paper chase to end.” The CFPB’s…