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 for Lack of Standing in FDCPA Case Over Letter Sent After Representation Notification
A District Court judge in Missouri has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act lawsuit, ruling the plaintiff did not have standing to sue because the defendant sent a letter to the plaintiff after being notified that the plaintiff was being represented by an attorney. More details here.
WHAT THIS MEANS, FROM JONATHAN FLOYD OF TROUTMAN PEPPER: Most federal courts continue to find that purely statutory violations do not confer Article III standing. Defendants should continue to review the case law in the relevant circuit and scrutinize consumer allegations of emotional distress, alarm, worry, confusion, loss of sleep, and alleged out-of-pocket expenses resulting from the receipt of a collection notice. Allegations without any factual allegations of justifiable reliance, actual damages, or other concrete injury can likely be challenged.
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Appeals Court Partially Overturns Ruling in TCPA, FCRA Case Involving Improper Collection Activity
The Court of Appeals for the Fourth Circuit has partially affirmed and partially vacated an award in a case the Court said would make for a great hypothetical law school exam involving allegations of improper debt collection activity and alleged violations of the Telephone Consumer Protection Act and the Fair Credit Reporting Act. More details here.
WHAT THIS MEANS, FROM RICK PERR OF KAUFMAN DOLOWICH & VOLUCK: This opinion highlights the need to perform bankruptcy scrubs for potential consumers. A bankruptcy can void an obligation, which, if subsequently collected upon, can create liability for the debt collector. The Court of Appeals for the Fourth Circuit reversed a grant of summary judgment for the collection agency when it concluded that there were genuine issues of material facts as to whether the agency was collecting a discharged mortgage from the plaintiff, or whether it was attempting to collect the amount due only from the plaintiff’s ex-wife, who never filed for bankruptcy. Ultimately, a jury will decide what happened in the collection efforts, but it will be a costly exercise.
Judge Certifies Class in FDCPA Case Over Attempts to Enforce Judgment
A District Court judge in New York has adopted recommendations from a Magistrate Court judge and certified a class in a Fair Debt Collection Practices Act case that has been going on for nearly a decade. More details here.
WHAT THIS MEANS, FROM DAVID GRASSI OF FROST ECHOLS: This decision from the Western District of New York once again serves as a reminder that post-judgment collection activities remain actionable under the FDCPA regardless of the judgment’s validity. Here, a default judgment was entered against Plaintiff in state court and later sold to the Defendant, who collected funds based on a garnishment. Plaintiff moved to vacate the judgment, which the state court initially granted and the Defendant returned the funds. The state court then denied the motion as untimely and ordered Plaintiff to return the funds, though Plaintiff did not do so. The federal court found Plaintiff had Article III standing under these facts to bring his FDCPA claim because he alleges he was deprived of funds for a period of time by judgment collection actions that violate the FDCPA and state law, and because Defendant contends the judgment is still enforceable despite Plaintiff’s contention it was not properly assigned. The Court also found a class of individuals had standing because they were sent garnishments on judgments where the assignor did not provide the requisite notice. The Court certified a class, finding commonality because the class members were treated uniformly, that Plaintiff would adequately protect their interests, predominance based on the factual and legal bases for the claim, and superiority because it is unlikely individual members would pursue claims.
The takeaway is that a collection agency needs to remain diligent and compliant when collecting on judgments. While judgments generally afford for additional tools to be used, they may also have additional requirements to use those tools and, even when they do not, the tools still must be used in compliance with the requirements of the FDCPA.
Judge Partially Grants MSJ for Defense in FCRA, FDCPA Case Over Claims Debt was Settled
A District Court judge in Arizona has partially granted a defendant’s motion for summary judgment in a Fair Credit Reporting Act and Fair Debt Collection Practices Act case, while also denying the plaintiff’s motion for summary judgment, in a he-said, she-said case over whether the plaintiff made payments in accordance with a settlement agreement with the defendant. The ruling does take into account a new ruling from the Ninth Circuit regarding the FDCPA’s statute of limitations that furnishers may want to pay attention to. More details here.
WHAT THIS MEANS, FROM JACOB BACH OF MARTIN GOLDEN LYONS WATTS MORGAN: It is difficult to win a FCRA claim regarding the reasonableness of an investigation on a motion for summary judgment, but this case proves that it is not impossible. Though there are cost of defense considerations to take into account when determining whether to take a FCRA claim through summary judgment, given that the issue of whether an investigation was reasonable is generally a fact issue for a jury to consider, defendants should consider whether there are enough facts in their favor to win at summary judgment rather than only consider settlement. Plaintiff’s counsels often rely on the high standard to win a FCRA claim at summary judgment to justify be lazy during discovery, and defendants can use this to their advantage. The Ninth Circuit has also brought itself in line with other circuits holding that every time a debt is credit reported, it sets a new date for a potential FDCPA violation, and defendants should be cognizant of which actions constitute new potential FDCPA violations when arguing the statute of limitations.
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.