Compliance Digest – December 28

I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit, email John H. Bedard, Jr., or call (678) 253-1871.

Every week, brings you the most important news in the industry. But, with compliance-related articles, context is king. That’s why the brightest and most knowledgable compliance experts are sought to offer their perspectives and insights into the most important news of the day. Read on to hear what the experts have to say this week.

Appeals Court Affirms Dismissal of FDCPA Class-Actions, But For Lack of Standing

The Court of Appeals for the Seventh Circuit has affirmed the dismissal of a pair of Fair Debt Collection Practices Act class-action letter lawsuits — but on different grounds than originally dismissed — because the plaintiffs never identified a concrete injury that was suffered as a result of what was said in the letters. More details here.

WHAT THIS MEANS, FROM XERXES MARTIN OF MALONE FROST MARTIN: The Seventh Circuit’s decision affirms for that jurisdiction that plaintiffs will not prevail by merely alleging bare violations of the FDCPA. Specifically, plaintiffs must satisfy Article III standing by asserting a true concrete and particularized injury before a court will consider any purported substantive violations. Rather than creating a strict liability statute, Congress clearly structured the FDCPA to prevent and redress harm or an “appreciable risk of harm” to consumers. Plaintiff’s will have a high hurdle to clear in Seventh Circuit letter cases.


Judge Denies MTD in Case Seeking to Invoke TCPA’s ATDS Provisions Were Invalid

On the same day, in the same District, two different judges issued opposing rulings on whether the Telephone Consumer Protection Act was unconstitutional between 2015 and 2020. The ruling in Hussain v. Sullivan Buick-Cadillac-GMS Truck, Inc. has already been discussed, and joined two other courts in determining that the statute was unconstitutional. But another judge in the Middle District of Florida found the defendant’s attempt to make the same argument unpersuasive and denied a motion to dismiss. More details here.

WHAT THIS MEANS, FROM RICK PERR OF KAUFMAN DOLOWICH & VOLUCK: The most surprising thing about this case is that people are surprised by it. The United States Supreme Court held in Barr that the government-backed debt exemption to the TCPA was unconstitutional and severed the exemption from the statute. It refused to strike down the entire TCPA. The rationale that non-government-backed debt calls are somehow lawful between the date of the amendment (2015) and the Barr opinion (2020) is highly questionable. It would be one thing for government-backed debt callers to argue that reliance on the exemption should preclude liability, but all other actors were unaffected by this amendment. Kudos to those defendants that were able to convince courts to dismiss TCPA cases based on the argument. But I would caution those hoping to definitely rely on a similar result.

Appeals Court Issues Four More Rulings on Lack of Standing

A day after it issued two rulings in which it determined plaintiffs lacked standing to sue debt collectors for alleged violations of the Fair Debt Collection Practices Act, the Court of Appeals for the Seventh Circuit issued four more rulings on the matter yesterday, determining in each case that the plaintiffs lacked standing to file their lawsuits because they did not prove that each of them suffered a concrete injury. More details here.

WHAT THIS MEANS, FROM AYLIX JENSEN OF MOSS & BARNETT: The United States Court of Appeals for the Seventh Circuit recently issued five opinions addressing Article III standing issues related to violations alleged under the Fair Debt Collection Practices Act (“FDCPA”). These five opinions revisit the Supreme Court’s decision in Spokeo, Inc. v. Robins and clarify that a plaintiff is required to provide proof of a concrete injury in fact to establish Article III standing. More specifically, as highlighted by Judge Easterbrook in two of the decisions, allegations of “confusion” or “’annoyance” are insufficient to establish an injury in fact for purposes of Article III standing. In light of these post-Spokeo decisions, it’s important for defendants to carefully analyze plaintiffs’ claims regarding their alleged injuries to determine whether they have asserted more than a bare procedural violation of the FDCPA.

Scammer Facing 30 Years in Prison After Pleading Guilty in $2M Collection Scheme

A North Carolina woman has pleaded guilty to charges of wire fraud and money laundering after being accused of orchestrating a collection scheme that netted $1.9 million in payments from unsuspecting individuals. More details here.

WHAT THIS MEANS, FROM LAURIE NELSON OF PAYMENT VISION: It is not a new concept to see a case against an individual in the collection space, but this case is interesting in several regards. First, the idea that the charged individual, Ms. Brown, orchestrated the illegal actions thru multiple entries, three in total, and, went by numerous names. This type of structure is a prime example of why all due diligence programs must include steps needed to have a thorough understanding of a company’s ownership and leadership. To that same point, consumers need to protect their interests and research before starting any negotiations with any company other than the original creditor. The first step to consider is confirming with the original creditor that the company is an authorized agent. 

Secondly, this case is interesting due to the extended period Ms. Brown was successful in the operation. The charges stem from actions taken during a five-year period where the accused collected over $1.9 million. Due to the nature of many bad actors opening and closing businesses rapidly, longevity in many cases is used in the collection space as an indicator of a more compliant business. This case is proof it should not be. 

Overall, this case is a reminder to all that schemes continue daily, some big, some small but to those that are defrauded, always big.  

Pa. AG Bans Student Loan Debt Relief Company

The Attorney General of Pennsylvania has stopped a company offering student loan debt relief services from operating in the state, forced it to repay $74,000 to individuals who were scammed, and pay a $50,000 fine as part of an announced settlement. More details here.

WHAT THIS MEANS, FROM JACQUELYN DICICCO OF J. ROBBIN LAW: In another fight against student loan debt relief scams, the Pennsylvania Attorney General stopped a company that misled consumers into paying charges and fees to be enrolled in student debt relief reduction or forgiveness programs, which borrowers are able to enroll in for free. This time, Unified Holding Group, LLC (“Unified”), doing business under a fictitious name, the Student Education Center, was alleged to have solicited borrowers and offered their services to reduce or eliminate student loan debt, marketed and advertised services related to the repayment of student loan debt on its website, created false reviews about their services on its own website, and also created false reviews on the Better Business Bureau’s website. In addition, Unified misrepresented to borrowers that they qualified for federal programs that would permanently reduce their monthly payments or that their loans would be forgiven. To accomplish these efforts, Unified charged borrowers fees for their services. In the action brought against it captioned Commonwealth of Pennsylvania Office of Attorney General v. Unified Holding Group, LLC d/b/a Student Education Center, the parties reached a settlement, which indicated that the acts and practices of Unified constitute “unfair methods of competition” and/or “unfair or deceptive acts or practices.” As a result, among other monetary relief, the settlement forced Unified to repay approximately $74,000 in restitution to borrowers who were scammed. This appears to be just one of the many successful efforts by the AG against tackling the abuses in the student loan industry.

I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit, email John H. Bedard, Jr., or call (678) 253-1871.

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