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 www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
Every week, AccountsRecovery.net 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 MTD in Hunstein Case for Lack of Standing
Having previously dismissed four of the five claims in a Fair Debt Collection Practices Act case, a District Court judge in New Jersey has gone five-for-five, dismissing the final claim, ruling that the plaintiff lacked standing to sue because she did not suffer a concrete injury after accusing the defendant of using a vendor to print and mail two collection letters that were sent to her. More details here.
WHAT THIS MEANS, FROM BRIT SUTTELL OF BARRON & NEWBURGER: For anyone following the continuing saga that Hunstein, this ruling should not come as a surprise. At least two circuit courts of appeals have held that an alleged FDCPA violation for using a letter vendor is not enough to put a Plaintiff in federal court, not to mention the various district courts, including the five decisions from the District of New Jersey, that have held the same. The one twist with this decision is that it does come from a court within the Third Circuit Court of Appeals who has not ruled on the Hunstein issue. This is important because there is at least one decision from the United States District Court for the Eastern District of Pennsylvania that held a Hunstein violation may confer Article III standing on a plaintiff. It will be interesting to see if this intra-circuit split will incentivize the plaintiff to file an appeal with the Third Circuit.
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Judge Dismisses FDCPA Case Over Use of County Sheriff as Process Server
A District Court judge in Indiana has adopted a Magistrate Judge’s report that recommended a defendant’s motion to dismiss be granted in a Fair Debt Collection Practices Act case related to the use of law enforcement officials effecting the service of process for a collection lawsuit. More details here.
WHAT THIS MEANS, FROM BRENT YARBOROUGH OF MAURICE WUTSCHER: When I first saw this headline, I assumed the plaintiff asserted a Hunstein claim over communications with the Sheriff’s Office. While that sounds absurd, some consumer attorneys are trying to extend § 1692c(b)’s prohibition on third-party communications to routine and necessary communications with process servers. As it turns out, the unrepresented plaintiff in this case based his claim on a complete misreading of § 1692e(2)(B). However, a Hunstein claim would have been dismissed just as easily given the statutory exception for communications made with “the express permission of a court of competent jurisdiction.” That exception should be useful when defending Hunstein claims arising from a method of service that was expressly permitted by the court’s rules.
Judge Grants MJOP in FDCPA Case Over Time-Barred Claim
A District Court judge in Pennsylvania has granted a defendant’s motion for judgment on the pleadings, agreeing with the defendant that the plaintiff’s complaint is time-barred under the Fair Debt Collection Practices Act’s one-year statute of limitations. More details here.
WHAT THIS MEANS, FROM JONATHAN ROBBIN OF J. ROBBIN LAW: A Pennsylvania Eastern District Court judge granted a motion to dismiss a plaintiff’s FDCPA action because the action was brought outside the FDCPA’s one-year statute of limitations. The defendant filed a collection lawsuit against the plaintiff in a Philadelphia court for a credit-card charged off in 2010, but the plaintiff lived in North Carolina when the defendant commenced the collection action. Because defendant sent the complaint and notice of default to an address in Philadelphia and did not attempt to contact her, the plaintiff discovered the judgment only when she was about to close on a home in 2019. She filed suit under the FDCPA against defendant in December 2021 alleging the defendant had failed to file the collection action in the proper venue. But, even in evaluating whether the plaintiff was entitled to equitable tolling on her FDCPA claim, the Court noted that she had waited nearly two and a half years from discovering the judgment in July 2019 until bringing her FDCPA claim in December 2021. Further, plaintiff failed to show she was prevented from filing during that time period or otherwise pursued her rights diligently. This decision further emphasizes that even in cases evaluating an application of equitable tolling, courts will not allow consumers to bring FDCPA claims over one year from a discovery, except if the plaintiff can demonstrate sufficient diligence or an inability to file the claim from the time of the act’s discovery.
Appeals Court Affirms Dismissal of FDCPA Class Action Over Issues With Letter
The Court of Appeals for the Third Circuit yesterday affirmed the dismissal of a Fair Debt Collection Practices Act class-action case for failure to state a claim in favor of a defendant that was sued for sending a collection letter to the plaintiff that allegedly referenced an incorrect balance, did not itemize the debt, did not indicate whether interest was accruing, and whether the inclusion of attorney’s fees and reference to the original creditor were misleading or deceptive. More details here.
WHAT THIS MEANS, FROM CAREN ENLOE OF SMITH DEBNAM: So why am I excited about the Third Circuit’s decision in Velez-Aguilar v. Sequiem Asset Solutions LLC Inc. when it is not binding precedent and involves a debt validation letter which predates the effective date of Regulation F? Because of its comments on what the FDCPA requires regarding the amount of the debt and as importantly, what it does not require.
With all the excitement and angst over Regulation F, it’s easy to lose sight of the fact that it is just an interpretative rule. It does not establish the basis for liability – that’s left to the FDCPA. As cases continue to emerge challenging debt validation notices under the Rule, it will be interesting to see how much courts rely upon the Rule versus the FDCPA.
So, what did the Third Circuit say in Velez-Aguilar? It says that the FDCPA does not require itemization. To support its position, the Court points to the plain language of section 1692g and the meaning of the word amount, concluding that the “’amount of the debt’ then indicates the total, aggregate, sum, or quantity of money that the consumer is obligated to pay.” While we continue to advise clients to use the model validation notice, this opinion may be of some persuasive value for those that choose to do otherwise.
Judge Rules Plaintiff Lacks Standing in FCRA Case Over Duplicative Items on Credit Report
A District Court judge in Kentucky has granted a defendant’s motion to dismiss after it was sued for violating the Fair Credit Reporting Act, ruling that the plaintiff lacked standing to sue after accusing the defendant of furnishing information about a debt twice on his credit report. More details here.
WHAT THIS MEANS, FROM JESSICA KLANDER OF BASSFORD REMELE: This underscores the importance of putting plaintiffs to task on proving up their claims. So often, we have plaintiffs providing vague and unauthenticated documents that allegedly “prove” the veracity of their claims or damages. This case shows that it pays to put plaintiffs to their burden of proof. This case also shows that certain federal courts are eager to dismiss these claims for lack of standing – which makes more work for the plaintiffs and sufficiently diminishes any likelihood for an easy payout. Keep the dismissals coming!
FCC Takes More Action to Fight Illegal Robocalls
The Federal Communications Commission last week put voice service providers on notice that it is taking its fight against illegal robocalls seriously, ordering a pair of providers to stop carrying suspected illegal robocalls while also telling all providers to investigate their networks for signs of alleged illegal activity and report back to the FCC what they are doing to stop it, or run the risk of an FCC enforcement action. More details here.
WHAT THIS MEANS, FROM CHUCK DODGE OF HUDSON COOK: In the debt collection space, the news we typically look for out of the FCC relates to the TCPA and any guidance they can give on what constitutes an autodialer. These developments remind us that the FCC is busier than that, and that carriers regulated by the FCC must be attentive to who they work with and “support.” While the FCC announcements about these cease-and-desist letters focus on the allegedly misleading nature of the “robocalls,” the underlying claims focus on the more fundamental and familiar TCPA concern that the alleged robocallers did not have prior express consent to leave pre-recorded messages for the consumers they called. These actions by the FCC are a useful reminder both to (a) understand the kind of consent a caller needs to be allowed to autodial a potential customer (or, in the case of a collection-related call, an actual customer) and leave a pre-recorded message, and (b) understand, if you are a carrier, the nature of the business being conducted by your business customers. In one of the announcements the FCC references the “unyielding menace of illegal spoofed, scam, robocalls,” suggesting that the FCC does not consider this just a short-term enforcement plan.
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 www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
