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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 FDCPA Case Over Different Dispute Deadlines in Collection Notice
A District Court judge in Connecticut has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act class-action involving a conflict between the dispute timeline collectors are required to give under Regulation F (30 days from the receipt of the notice, excluding weekends and holidays) and the dispute language required when sending letters in Connecticut (30 days after receiving the notice), ruling the two different dates do not contradict each other nor are misleading. More details here.
WHAT THIS MEANS, FROM CAREN ENLOE OF SMITH DEBNAM: This case serves as a good reminder to the ARM industry of two things: first, Regulation F’s debt validation requirements do not neatly align with 15 U.S.C. § 1692g and secondly, that the statute takes priority over Reg F. As we know, section 1692g(a) requires debt validation notices provide thirty days after receipt to dispute or request validation. Section 1006.34 requires the debt validation notice include the end date of the validation period and defines the validation period in such a way as to include a 5 day (excluding public holidays and weekends) mail rule. Here, the court’s opinion touches on those potential inconsistencies (further enforced by the Connecticut debt collection act) and attempts to address: (a) what happens when both a traditional 1692g notice is provided in tandem with the model DVN provisions, resulting in different end dates for the debt validation period; and (b) what happens when the model DVN language is used but the end date does not fully account for the 5 day mail rule assumption provided in 12 CFR 1006.34(b)(5)? Using both the Article III lens, as well as a plausibility lens, the case is excellent reading in that it lays out the various scenarios in which a complaint may or may not pass muster when addressing the seeming inconsistencies presented by the language of the statute and the regulation. Of particular note, the court’s opinion emphasizes: (a) the need for particular allegations as to an injury in fact; (b) a no harm, no foul mantra; and (c) that the time period provided by the statute takes priority over Reg F.
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Judge Grants MJOP in FCRA, FDCPA Case Over Duplicative Tradelines
A District Court judge in Nevada has granted a defendant’s motion for judgment on the pleadings in a Fair Credit Reporting Act and Fair Debt Collection Practices Act case involving duplicative entries on the plaintiff’s credit report from a collection agency and a creditor related to the same debt, although the amounts of the debt were different. More details here.
WHAT THIS MEANS, FROM CHUCK DODGE OF HUDSON COOK: Sometimes it’s just that simple. Judgment on the pleadings is rare in FCRA or FDCPA cases, but in this case the plaintiff sued both the original creditor and the debt collector under the FCRA and FDCPA, claiming that it was “inaccurate”, and therefore a violation of the FCRA, for both parties to furnish data on his account. The facts indicate that the original creditor furnished a trade line with a charged-off fixed balance, consistent with Metro 2 guidance on how to report a charged-off balance, and the debt collector furnished a trade line with a higher balance that reflected the accrual of interest and fees. Having previously dismissed the case against the debt collector after finding that it was furnishing accurate information, the court awarded the original creditor judgment on the pleadings on the same basis. The two parties furnishing trade lines for the same account as described was not inaccurate or misleading. For that reason the court awarded judgment for the creditor and put this relatively simple case to rest.
‘Tidal Wave’ of Collection Lawsuits Coming, Report Predicts
A “tidal wave” of lawsuits seeking to collect and recover on unpaid debts is “imminent,” according to SoloSuit, a company that helps individuals respond to collection lawsuits. The report also ranked the companies that were plaintiffs in the most collection lawsuits and the law firms that filed the most lawsuits on behalf of creditors. More details here.
WHAT THIS MEANS, FROM XERXES MARTIN OF MARTIN LYONS WATTS MORGAN: The current state of the economy appears to be less people wanting to work, while life gets more expensive. When people struggle to afford their necessities or lifestyles, they typically take on debt at the cost of interest if not paid off timely. When watching TV, you probably don’t get through a commercial break without seeing an advertisement for a credit card. You have a problem, there is the advertised solution. More issuance of credit leads to more debts, more debts leads to more defaults, and more defaults leads to more collection activity. No surprises there. However, I think a “tidal wave” as proclaimed by the study may be exaggerated. Given the amount of debt out there, there should be an increase in lawsuits, but due to bottlenecks the increase should be more akin to a rising tide than a tidal wave.
California Appeals Court Affirms Second Fee Award for Collector
I think this might be something along the lines of adding insult to injury … Three months after a different Appeals Court upheld an award to a debt collector of $50,000 in attorney’s fees, another Appeals Court has affirmed the award of $19,651 to the collector after it was accused by a law firm of interfering with the attorney-client relationship between the firm and one of its clients. More details here.
WHAT THIS MEANS, FROM LORI QUINN OF GORDON REES: Spielbauer Law Office, Plaintiff and Appellant, appealed the trial courts award of attorney’s fees to Midland Funding, LLC. The Court of Appeals for the Sixth Appellate District of California affirmed the trial court’s award of attorney’s fees to Midland Funding denying each of the three contentions Spielbauer raised on appeal. The Sixth Appellate Court found the trial court did not abuse its discretion in sustaining Midland’s objection to the use of an expert declaration where the trial court found the evidence was insufficient to qualify the declarant as an expert to render an opinion nor did it err in denying judicial notice of two cases cited by Spielbauer. The grant of Midland’s attorney fees were affirmed. The Court also found Midland was entitled to costs on appeal. There is the saying – two times is a charm – but not for this Plaintiff / Appellant.
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.
