Lawsuit Activity Rebounds in July, But Still Well Below 2019 Levels: WebRecon

Only in 2020 would the number of lawsuits filed against collection agencies claiming violations of the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and the Telephone Consumer Protection Act be both up and down, according to data published yesterday by WebRecon.

When comparing the totals from July 2020 to a month earlier, the number of suits filed were all up, significantly so for FCRA and TCPA. But when looking at the number of lawsuits that were filed in July 2019, the number of suits for all three statutes were down by double-digit percentages. The trend even holds true for complaints filed by individuals about debt collectors with the Consumer Financial Protection Bureau.

More than half of the TCPA suits filed in July were putative class actions, according to WebRecon, while 22.5% of FDCPA suits and only 3.7% of FCRA suits were class actions.

So what’s the takeaway? Plaintiffs and their lawyers are becoming more active as the coronavirus pandemic drags on, but they are still a lot less active than they were a year ago.

The year-to-date totals for January through July might offer the best insight into how the data is trending. Complaints filed with the CFPB and FDCPA suits are down when comparing the totals to the first seven months of 2019, while the number of FCRA and TCPA claims are up.

Attempts to collect debts that are not owed continues to be the most popular complaint consumers are filing with the CFPB, accounting for 55% of complaints filed in July. Not receiving written notification of a debt was next, representing 22% of complaints.

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