Compliance Digest – February 22

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 MSJ for Defendant in FDCPA, TCPA Case Over Calls to Cell Phone

In a case that was defended by Patrick Watts at Malone Frost Martin, a District Court judge in Wisconsin has granted a defendant’s motion for summary judgment after it was sued for violating the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act by placing 28 calls to the plaintiff’s cell phone during a two-month span. More details here.

WHAT THIS MEANS, FROM ETHAN OSTROFF OF TROUTMAN PEPPER: This ruling out of the Western District in Wisconsin illustrates two important points regarding TCPA and FDCPA compliance. First, it highlights the importance of collection agencies obtaining written consent documentation from their clients before calling an individual using an ATDS or pre-recorded/artificial voice message. The court granted summary judgment for the defendant on the plaintiff’s TCPA claim, as the plaintiff signed consent forms with his medical provider (that covered communications from the defendant debt collector) and failed to produce evidence that the general consent form was “procured by fraud in fact” or that he was “not permitted” to review it, among other reasons. Second, the ruling reinforces the current trend of courts finding a plaintiff merely presenting evidence of call volume to prove harassment under the FDCPA, without more, is insufficient to defeat a motion for summary judgment. The court granted summary judgment for the defendant regarding both of the plaintiff’s FDCPA counts as the court found that “no reasonable jury could find objective harassment or the use of unfair or unconscionable means” to collect on this debt. 


Judge Grants MSJ For Defense in FDCPA Suit Over Reference to Changing Debt Balance in Letter

A District Court judge in Pennsylvania has granted a defendant’s motion for summary judgment after it was accused of violating the Fair Debt Collection Practices Act by sending the plaintiff a collection letter that indicated the amount owed may “increase or decrease” which allegedly created a false sense of urgency. More details here.

WHAT THIS MEANS, FROM RICK PERR OF KAUFMAN DOLOWICH & VOLUCK: Plaintiffs’ attorneys continue to argue that “unsophisticated” consumers make very sophisticated interpretations of simple words in collection letters. In this case, plaintiff claimed that the word “adjustments” in the letter, when referring to a change in a static balance due to a payment or adjustment, would cause the consumer to believe that the balance was not static because of interest or late fees. The collection agency defendant demonstrated to the trial judge that the balance could change if the creditor received a direct payment or the creditor adjusted the balance. Therefore, the language was true and not deceptive. The agency had to pursue discovery before filing the motion, and, therefore, the cost of defense was not insignificant. But, the agency should be commended for having the fortitude to stand its ground and taking it to the summary judgment stage.

Uejio Says CFPB is Coming for Those ‘Who Have Been Lax’ in Responding to Consumer Complaints

Dave Uejio, the Acting Director of the Consumer Financial Protection Bureau has published another blog post, this time sharing the directions he has given to the agency’s Consumer Education and External Affairs unit, including calling out companies who “have been lax” in responding to consumer complaints in a timely fashion, and “aggressively rebuild[ing] and repair[ing] out relationships” with consumer advocacy groups. More details here.

WHAT THIS MEANS, FROM JOANN NEEDLEMAN OF CLARK HILL: Acting Director of the Consumer Financial Protection Bureau, (“CFPB” or “Bureau”),  Dave Uejio, has been extremely busy and vocal since his appointment on January 20, 2021 by the Biden Administration.  He has clearly reinforced and articulated the Bureau’s primary mission of protecting consumers and has wasted no time in outlining an aggressive agenda moving forward. However his latest statement calling out “companies” for their “lax” response to consumer complaints it a bit puzzling. No specific industry was identified.

Since July of 2013 when the CFPB started accepting debt collection complaints, the ARM industry has done an excellent job in building response mechanisms in order to respond to consumer complaints in a timely manner. In the CFPB’s 2019 Consumer Response Annual Report to Congress dated March 2020, only 4% of debt collection companies did not timely respond to consumer complaints. Untimely response rates for payday, credit repair and title loan companies were almost double that figure. The 2020 Consumer Response Report is due next month and it will be interesting to see those findings in light of the Acting Directors comments. Ironically, on the CPFB’s own website, viewed as of the writing of this article states that 97% of complaints sent to companies get timely responses. Outreach to many in the industry confirms that responses to consumer complaints has remained consistent and within 15 days or less.

It is no coincidence that this latest directive is also tied to the Acting Director’s desire to bring consumer-advocate influence back to the Bureau. Whether advocates have been advising the CFPB about lax responses to consumer complaints is unclear and unknown. Many believe that the Acting Director is laying the groundwork for Rohit Chopra once he is confirmed. The ARM Industry has been one of the most responsive industries to consumer complaints and will continue to be so, even with a new change in leadership. It is recommended that companies that receive complaints through the CFPB portal, need to ensure that they data collection is accurate going forward in order to deflect these allegations of noncompliance.

Mass. AG Settles Lawsuit With Student Loan Servicer

The Attorney General of Massachusetts has announced a “first-of-its-kind” settlement with a student loan servicer that had been sued for allegedly engaging in unfair and deceptive practices that will require it to audit all 200,000 of its accounts in the state to determine if an error or misrepresentation was made and restore borrowers “to their rightful statuses” under a federal loan forgiveness program. If that is not possible, then the servicer — Pennsylvania Higher Education Assistance Agency (PHEAA) — must make monetary payments to borrowers. More details here.

WHAT THIS MEANS, FROM CARLOS ORTIZ OF HINSHAW CULBERTSON: The Massachusetts attorney general settled a lawsuit she filed against the Pennsylvania Higher Education Assistance Agency (“PHEAA”), a student loan servicer. The lawsuit arose out of allegations that PHEAA prevented hundreds of thousands from having their loans forgiven or reduced.  Among the terms of the settlement are (1) that over 200,000 Massachusetts borrowers whose federal loans PHEAA services may seek a detailed account review; (2) PHEAA must pay the borrowers if it is unable to correct any servicing errors it identifies; and (3) PHEAA must also repay teachers whose grants it erroneously converted to loans.  The Massachusetts attorney general described the settlement as providing first-of-its-kind relief. 

One of reasons this settlement is significant is that the judge presiding over the lawsuit declined to dismiss the case when PHEAA argued that the state law claims against it were preempted because they conflicted with federal law.  This settlement follows other enforcement actions that the Massachusetts attorney general has pursued, including a settlement with ACS Education Services (“ACS”) for alleged abusive student loan collection practices, under which ACS agreed to pay a $2.4 million fine and review certain borrowers’ income-based plan applications. These enforcement actions are consistent with the activities of other state attorneys general focused on student loan servicing practices.  For example, the New York attorney general also sued PHEAA, alleging that its failure to administer a loan forgiveness program led many who would have qualified to be rejected. In California, the state is investigating PHEAA for allegations similar to what was claimed against it in Massachusetts.  It is anticipated that more enforcement actions like this one will come and likely be concentrated in jurisdictions that have a Democrat in office for attorney general.

Virginia Next in Line to Enact Privacy Law

Virginia is poised to be the next state that enacts its own data privacy law, which some reports say is similar to the California Consumer Protection Act, although it does not include one provision that made the CCPA more problematic for companies. More details here.

WHAT THIS MEANS, FROM KIM PHAN OF BALLARD SPAHR: Each chamber of the Virginia General Assembly has passed comprehensive privacy legislation during the past month, similar in many respects to the California Consumer Privacy Act.  If the Virginia House of Delegates and the Virginia Senate can reconcile the differences between their respective versions, a final bill could be sent to Virginia Governor Ralph Northam, who is widely expected to sign such legislation into law.  Both the Senate bill (S 1392) and the House bill (H 2307) would grant exclusive authority to the Attorney General to enforce violations of any new privacy law, rather than giving consumers a private right of action. Both bills also contain an express exemption for financial institutions subject to the federal Gramm-Leach-Bliley Act.

Groups Ask FCC to Fix Apparent Error Related to Order Limiting Calls to Landlines Without Consent

A coalition of trade groups, including ACA International, have asked the Federal Communications Commission to correct an apparent error that “inadvertently” imposes a prior written consent requirement on informational prerecorded or artificial voice calls to residential numbers. More details here.

WHAT THIS MEANS, FROM AMANDA PAYTON OF SOLUTIONS BY TEXT: We should hope, but not assume, the FCC’s application of the “prior written consent” standard to informational calls was an error that will be promptly corrected. The Order, as written, is such a departure from the previous standard that we would expect definition updates and substantive commentary to accompany any intentional changes by the FCC. To correct an error, the FCC generally publishes an “Erratum” that zeros in on the mistake and provides revised, corrected language. According to the FCC’s Commission Documents (EDOCS), the FCC issued 35 Erratums in 2020 across a wide array of orders and topics. An Erratum is generally published quickly after a mistake is identified, but some Erratums take months to formalize. Considering the impact the current language has on businesses of many shapes and sizes, let’s hope the FCC acknowledges this as a mistake and issues a corrective Erratum soon.

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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