If this keeps up, the collections industry might need to find something else to complain about.
The number of lawsuits filed by individuals against collection agencies, alleging violations of the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and the Telephone Consumer Protection Act decreased again in July, according to data released by WebRecon. The 1,431 suits filed in July was 3% lower than the 1,479 filed in June, although all three categories were higher than the same month last year. Through the first seven months of 2018, there have been 10,521 lawsuits filed, 5% less than the same period of 2017, which saw 11,144 suits filed against collection agencies.
The area which has seen the biggest drop is lawsuits alleging violations of the TCPA, which are down 16% on a year-over-year basis. It’s possible, and it’s been suggested by some legal experts, that the Court of Appeals decision in ACA International v. Federal Communications Commission is the reason why the number of TCPA lawsuits has fallen so precipitously.
The only area where the number of lawsuits filed is up on a consistent basis is the FCRA, which has been cited as a potential problem area for collection agencies. It’s possible that plaintiff’s attorneys are trying out a new strategy of focusing on FCRA-related lawsuits, which generally relate back to how a debt is reported, or not reported, to one of the major credit bureaus.
The number of complaints filed with the Bureau of Consumer Financial Protection was now 7% in July, compared with June, but are still up 13% on a year-over-year basis.
While the overall number of lawsuits is declining, and at this pace would be completely eliminated in 20 years or so, the ARM industry would be wise to keep its guard up, especially as rules related to the FDCPA and the TCPA are on the horizon, which will likely spark new strategies from plaintiff’s attorneys. For the moment, however, the temporary reprieve may offer agency executives a brief opportunity to enjoy the last few days of summer.