Compliance Digest – January 11

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.

Judge Grants Certification in FDCPA Class Action Over Reference to ‘Civil Action’ in Letter

A District Court judge in Wisconsin has certified a class in a case against a collection agency accused of violating the Fair Debt Collection Practices Act by saying it “may” commence a civil action if the debt was not paid even though it had no intention of doing so. More details here.

WHAT THIS MEANS, FROM MIKE FROST OF MALONE FROST MARTIN: The Court certified a class action in this claim where the collection agency sent a notice to a consumer stating, in relevant part, as follows:

If this debt remains unpaid, then 30 days from the date of this letter the Facility may begin the following Extraordinary Collection Actions (ECAs):  Reporting to a consumer credit reporting agency or credit bureaus; Commence a civil action (suit) which may include : garnishment of wages, attaching or seizing a bank account, placing a lien on residences or other personal property.  The plaintiff alleged that the defendant’s policies and procedures supported the plaintiff’s contention that the defendant violated the FDCPA by making a false claim and threatening an action that the creditor had no intention of undertaking.  

In the event an agency is taking a legal action and wants to include such statement in a letter to a consumer, it is a best practice to obtain the creditors written authorization to sue or take an assignment of the claim prior to sending a letter that threatens legal action and also have the intent to take sure action that is contemplated.


Ninth Circuit Affirms Ruling for CFPB in Seila Law Case

In a battle that has been to the Supreme Court and back, the Court of Appeals for the Ninth Circuit yesterday reaffirmed a District Court ruling that grants a petition from the Consumer Financial Protection Bureau seeking to enforce a civil investigative demand letter that was sent to a law firm. The Appeals Court determined that a ratification from Director Kathleen Kraninger of prior enforcement actions undertaken by the CFPB was more than enough to allow the CID to proceed, even after the Supreme Court ruled the leadership structure of the agency was unconstitutional in this very case. More details here.

WHAT THIS MEANS, FROM MICHAEL KLUTHO OF BASSFORD REMELE: The machinations involving the Seila Law case brought by the CFPB (via a Civil Investigative Demand) continue. You might recall that this was the case decided by the US Supreme Court that ruled the CFPB unconstitutional. After doing so, the Supreme Court remanded the case back to the 9th Circuit Court of Appeals. 

This go around, and notwithstanding the ruling that the CFPB was unconstitutional, the 9th Circuit held that the “unconstitutional” CID enforcement was “ratified” by a subsequent “constitutional” Director. In essence, this represents a holding along the lines of “no harm, no foul.” Of course Seila Law would argue otherwise and perhaps it will in another appeal to the U.S. Supreme Court. This case has been going on for a long time, and it looks like it’s gestation is still underway. Keep your seatbelts fastened.

Judge Partially Grants MTD in Age Discrimination Case Against Collection Law Firm

A District Court judge in Ohio has dismissed three of the four counts requested by a collection law firm being sued by a former employee who is accusing the firm of age discrimination and other claims, while also setting a date for a jury trial to begin in May on the remaining counts. More details here.

WHAT THIS MEANS, FROM BRIT SUTTELL OF BARRON & NEWBURGER: This case highlights another area where industry members need to be compliant – employment law. While all members of the industry are acutely aware of the compliance requirements under the various federal, state, and local debt collection and consumer protections laws and regulations, it is important to remember that compliance with appropriate employment laws is also required. As the “baby-boomer” generation continues to age, it is important to remember that they still make up approximately half of the workforce. This means that companies must be vigilant in their employment practices (hiring, terminating, disciplining) and make sure that the policies are not only as facially neutral as possible but do not result in a disparate impact to one group or another.

Robocall Complaints Continue Decline: FCC

The number of complaints alleging violations of Section 227 of the Telephone Consumer Protection Act continued their marked decline during the first 11 months of 2020 and were on pace to fall for the third consecutive year, according to data released last week by the Federal Communications Commission. More details here.

WHAT THIS MEANS, FROM LARRY LASKEY: First, while the FCC Report reflects a decrease in 2020 informal consumer complaints to the FCC, TCPA lawsuits are projected (see this article) to be at about the same level as last year. Using the last-available full year data (2019), the FCC Report shows a dramatic drop in informal consumer complaints (from 100,104 for 2018 to 58,797 for 2019); reported data for TCPA lawsuits for the same period (see, e.g., the WebRecon stats linked to the December article) show only a very slight decline (from 3,866 for 2018 to 3,414 for 2019). While this could be attributed to less mercenary factors such as lag time, it also suggests support for the more popular (spell-checked from “plausible”?) notion that the private right of action granted by the TCPA is being used less to redress real consumer harm than to fill the pockets of plaintiffs’ counsel.

Second, and maybe more directly, the Report doesn’t reliably tell us much.  The numbers reported for complaints of 227(b) violations include both ATDS and automated message calls to cell phones as well as automated message calls to landlines, so we don’t know how much of the decrease is attributable to complaints about calls to cell phones (though we might assume it is, given the increased prevalence of “cell only” households) or to complaints about the use of an ATDS v. automated messages. We could surmise that the use of “human caller initiated” technologies, while providing solid defense to an ATDS-based lawsuit, wouldn’t have much impact on an informal complaint because “dead air” is the same to a consumer whether caused by a dialer or by a delayed “closer agent”. However, we’re still left to wonder about the extent to which call blocking/labelling solutions that impair our ability to reach the consumer are having the “positive” (meant only in a relative sense) effect of reducing consumer complaints (if not lawsuits).

Going forward, without more detail, reading anything into future similar FCC Reports will be further complicated as the industry more fully adopts the use of text messaging and the FCC implements its recently announced residential line call frequency limits and opt out requirements.

Class-Action Suit Filed Against Collection Agency

A class-action lawsuit has been filed against a debt collector, accusing it of making it look like the collector purchased debts from a healthcare provider when it had not done so and for violating a state collection law in Colorado. More details here.

WHAT THIS MEANS, FROM LESLIE BENDER OF CLARK HILL: As 2020 drew to a close, the National Consumer Law Center (NCLC) filed a class action lawsuit — Waite et al v Credit Service Company, Inc. — challenging the use of legal means to collect unpaid medical debts. NCLC and a consumer advocacy group known as “Towards Justice” filed the class action about “aggressive and predatory medical debt collection tactics that afflict tens of thousands of Coloradans every year.” (See press release as well as public responses from CSC and from UC Health here:

The defendant in the suit is not a healthcare provider but instead is a Colorado healthcare collection agency, Credit Service Company, Inc. (CSC). CSC, a company active in the Colorado Springs Chamber as well as the Southern Colorado Women’s Chamber of Commerce is independently rated A+ by the Better Business Bureau, has been honored as a “Best Workplace” in 2020, and is both a service-disabled veteran owned small business and is HUBZone certified. 

The lawsuit alleges CSC used “illegal efforts” to collect medical bills from patients. More specifically, the suit chronicles the experiences of two named patients of the UC Health System. Each named plaintiff alleges the plaintiffs’ complaints about excessive bills to the UC Health System were ignored, thus leading to UC Health placing their accounts for collections with CSC. The suit seeks damages and injunctive relief and characterizes the named plaintiffs as “targets” of CSC’s allegedly illegal collection actions. Although UC Health System offers a wide range of financial assistance programs to its patient population, the lawsuit is silent as to whether or not either named plaintiff or any alleged class members apply for financial assistance to defray the cost of the services or medical tests each plaintiff acknowledges he or she received.*

Among the claims in the lawsuit, the plaintiffs challenge UC Health’s practice of failing to “engage directly” with patients – instead transferring responsibility over to CSC so that CSC, not UC Health, uses its name in lawsuits against patients. The complaint alleges this practice forces patients to reveal “the private, sometimes intimate details of their medical histories to CSC even though CSC does not have a relationship of trust and confidence with them or a fiduciary obligation to them.” The suit does not mention whether or not it is the plaintiffs’ position that either UC Health or CSC have run afoul of relevant provisions (such as the business associate features) of the national medical privacy law, the Health Insurance Portability and Accountability Act of 1996 (and regulations and amendments related thereto, “HIPAA”).

Despite the allegations about UC Health’s conduct in the complaint, the NCLC did not name the UC Health System as a party to the lawsuit. Both UC Health and CSC offered public statements once the NCLC press release was published. CSC public comments include this statement, “CSC believes this lawsuit is frivolous; we have been a compassionate, empathetic, and ethical debt collector for more than 70 years.”

The takeaways from the lawsuit include these: first, even in the absence of a pandemic there are challenges patients face when confronted with medical bills they wish to challenge or cannot afford to pay. Patient advocates as well as collection agencies should look for opportunities to direct patients to consider financial assistance opportunities quickly even if also disputing all or a portion of a medical bill. Second, it is advisable to make it easy for patients to easily communicate with collection agencies regarding the details of their disputes or complaints about medical bills – ideally in their own words. Third, collection agencies and healthcare providers should assure they have open lines of communication for exchanging information about patient complaints or disputes related to their unpaid bills. What is less clear here is whether or not the practice of bringing collections lawsuits to collect unpaid medical bills is perceived to be overall problematic and whether this class action lawsuit signals more NCLC and consumer advocacy litigation to come in 2021.

* — See information noting that patients have 240 days from their original statement date to apply for financial assistance and some of the criteria for consideration. All the details of its policies, telephone numbers and email addresses and application forms can be found here: Since the pandemic began the UC Health system has provided care, treatment and helpful information to the public about COVID-19 and has seen as may as 450 patients daily presenting with COVID-19 infections.  See,

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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