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 MSJ for Defendant in FDCPA Case Over Differing Amounts in Letter; Dispute Response
A District Court judge in Pennsylvania has ruled that a plaintiff has standing to pursue a Fair Debt Collection Practices Act case in federal court because the plaintiff purchased Tylenol to help deal with symptoms after receiving a collection letter that contained a misleading communication, but granted the defendant’s motion for summary judgment. More details here.
WHAT THIS MEANS, FROM VIRGINIA BELL FLYNN OF TROUTMAN PEPPER: In Linnabary v. Sequium Asset Sols., Plaintiff accused defendant of violating the FDCPA by sending debt collection and validation letters containing conflicting balances. On summary judgment the court found that defendant did not misrepresent the amount of the debt by listing two different balances because the defendant was not required to show detailed files of the debt, bills, or other evidence to satisfy its debt validation obligations. Further, the least sophisticated debtor would understand that the smaller amount listed in defendant’s validation response represented the total amount owed and the larger amount represented the amount owed three months prior.
Businesses should still be wary of sending supporting statements that do not align with balances contained in debt validation responses. Although on summary judgment, the court rejected plaintiff’s argument that defendant misrepresented the debt owed, such conflicting evidence will still constitute sufficient “informational injury” under Article III standing requirements, in which a plaintiff is denied information to which he or she was legally entitled and the denial caused adverse consequences. Here, the court found that Plaintiff’s testimony of certain intangible harms she suffered from the miscommunication — including failing to pay the debt or take appropriate action, suffering from emotional distress, feeling upset, fighting with her spouse, losing time, and purchasing Tylenol — all qualified as sufficient injuries that satisfy Article III standing requirements.
THE COMPLIANCE DIGEST IS SPONSORED BY:
Judge Grants MTD in FDCPA Class Action Over Different Account Numbers
For those of you keeping track of what does not constitute standing to sue in federal court, you can add receiving a collection letter that makes it appear you are responsible for a debt owed by your dead husband that includes an account number that is different from the account number that had previously been provided to you. More details here.
WHAT THIS MEANS, FROM JESSICA KLANDER OF BASSFORD REMELE: Here is another great case limiting the plaintiff’s ability to assert FDCPA claims in federal court. The language in this order regarding loss of “money” being insufficient to confer an injury is particularly helpful. Many courts hang their hat on the plaintiff’s vague contention that there was some undefined economic loss to establish an injury. Here, the court saw through the façade and concluded that the alleged harm was not specific enough. The court also concluded that general allegations of “fear, anxiety, and stress” are insufficient to establish a concrete injury. Add this one to the arsenal for challenging a plaintiff’s standing!
Judge Dismisses FDCPA Class-Action for Lack of Standing
A debt collection letter, sent to the plaintiff’s girlfriend. Letters that allegedly did not include the proper disclosures. And a District Court judge from New York who dismissed the class-action complaint because the plaintiff failed to allege that he suffered a concrete injury. More details here.
WHAT THIS MEANS, FROM KHARI FERRELL OF FROST ECHOLS: This case provides a useful analysis of the requirements for a party to establish Article III standing in cases where the harm allegation relates to some sort of improper disclosure of private information. In this case, the court makes it clear that not all disclosures of private information give rise to Article III standing, but only when such disclosure is made “known to the larger community.”
As it pertains to the plaintiff’s claim that the letters he received from the defendant caused confusion as to how he should respond, the Court reiterated that allegations of mere confusion — without alleging any downstream consequences of that confusion — are insufficient to establish Article III standing.
From a litigator’s perspective, this case highlights the importance of always checking the allegations in a plaintiff’s complaint related to alleged injury and harm to make sure they meet the requirements for Article III standing.
Appeals Court Affirms Ruling for Defendant in FDCPA Case Over Penn. CDCA Licensing Issue
In a case that was defended by Brit Suttell and the team at Barron & Newburger, the Court of Appeals for the Third Circuit has upheld a lower court’s ruling in favor of a defendant that was sued for violating the Fair Debt Collection Practices Act because it attempted to collect on a debt — a small-dollar loan — that was originated by a lender licensed under Pennsylvania’s Consumer Discount Company Act (CDCA) but then sold to an entity that was not licensed under the CDCA. More details here.
WHAT THIS MEANS, FROM ISSA MOE OF MOSS & BARNETT: This was an interesting opinion! Okay, not really, but leading with clickbait increases the chances that you’ll keep reading. Long and short of it is this: The 3rd Circuit held that the Pennsylvania Consumer Discount Company Act (“CDCA”) — which restricts unlicensed small-dollar lenders that negotiate or make loans or advances of money on credit, from charging, collecting, contracting for, or receiving interest at an annual rate above 6% — does not apply to companies that purchase or collect charged-off consumer debt. So, according to the 3rd Circuit, once a lender-licensee charges off a CDCA-regulated loan and sells it, the regulatory framework no longer applies to the debt buyer or their debt collector. Even better, the Pennsylvania Department of Banking and Securities agreed with this interpretation! What does that mean in this case? No FDCPA liability for a debt collector that sought to collect a charged-off CDCA-regulated debt (via a bankruptcy proof of claim) on behalf of a debt buyer, even though the debt buyer did not hold a CDCA license.
That’s it, short and sweet. Chalk one up for the ARM industry here. It’s not every day that you get both a federal appeals court and a state regulator to agree that a licensing statute should be interpreted in a way that lightens the regulatory burden for collection agencies. That’s the stuff dreams are made of!
Judge Dismisses FDCPA Suit Over Collection Suit Filed in Wrong Jurisdiction
A District Court judge in North Carolina has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act case, ruling that the plaintiff failed to state a claim after accusing the defendant of violating the statute by sending a collection summons and complaint to an incorrect address, obtaining a default judgment, and garnishing the plaintiff’s wages. More details here.
WHAT THIS MEANS, FROM CHUCK DODGE OF HUDSON COOK: This case may not be over, but it is over for now. The debt collector filed a collection lawsuit in Mississippi, but the consumer allegedly lived in North Carolina at the time of service (the opinion does not detail how the debt collector served the complaint, but Mississippi appears to allow service by mail to the last known address), and that she had never lived at or visited the address where the debt collector served the complaint. The debt collector obtained a default judgment, garnished the plaintiff’s wages and satisfied the small judgment. The consumer sued in federal court in North Carolina claiming several FDPCA violations that focused on improper service. The district court noted that it could not vacate the Mississippi judgment, but a Mississippi court had set it aside by the time of this decision. On the consumer’s FDCPA claims, the court noted that the consumer’s broad, conclusory FDCPA claims about a judgment that the debt collector had no reason to believe was faulty when it garnished her wages were not sufficient to establish that the debt collector had engaged in unfair or unconscionable conduct when it enforced the then-valid judgment. The court identified the absence of facts – like the Mississippi address where the consumer had lived, and whether she had provided an incorrect address to the original creditor – as a reason why it could not find that she had plausibly alleged an FDPCA claim. The court dismissed the case without prejudice, so it could be back with more facts that might not lead to another dismissal. The possibility of a bona fide error defense is still out there, so we’ll see if the case comes back. For now, it appears that the North Carolina court correctly dismissed this FDCPA case.
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.