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.
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N.J. Judge Dismisses Class-Action FDCPA Suit Over Dispute Notice Language in Letter
Maybe the tide of lawsuits related to the dispute notification in validation notices in the Third Circuit is finally turning in favor of the credit and collection industry. More details here.
WHAT THIS MEANS, FROM XERXES MARTIN OF MALONE FROST MARTIN: Ulrich is definitely a case in the right direction. Currently, the Third Circuit is the outlier on validation notice language, but this case and other cases on appeal may finally change that. In the cases we have pending in the Third Circuit on validation notice language, courts have been granting motions to stay pending the Third Circuit addressing these issues and will hopefully overturn Graziano. Everyone is tuned in waiting to see what the Third Circuit does.
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Judge Grants MSJ in Case Involving Two Dispute Notices Sent Months Apart
A District Court judge in Texas has granted summary judgment in favor of a defendant that was accused of violating the Fair Debt Collection Practices Act by sending two collection letters — four months apart — that each contained a notice and a 30-day window in which the debt could be disputed. The conflicting information was said to violate Section 1692e of the FDCPA by using false, deceptive or misleading representations in the collection of a debt. More details here.
WHAT THIS MEANS, FROM DENNIS BARTON OF THE BARTON LAW GROUP: In Ortiz v. Enhanced Recovery Company, LLC, the District Court reviewed the issue of whether sending more than one letter with the validation language (notifying consumers they have 30 days to dispute, etc.) violates the FDCPA. The court granted summary judgment in favor of defendant finding that doing so expands the rights of consumers rather than limits them. The court pointed out that receiving multiple validation notices may create questions, but that alone does not give rise to a violation. The take away from this case is that sending multiple validation notices may not violate the FDCPA, but it is still a bad practice. First, it gives consumers more rights, and the deck is already stacked against collectors. Second, every time a consumer receives a new validation notice, the consumer gets a brand new 30-day validation period. That means more opportunities for an easily-committed yet unintentional overshadowing claims. A collector may see in the account history that a validation notice was sent more four months ago and discuss creditor reporting or law suits not realize (s)he should not do that because a subsequent letter started a new validation period. Therefore, although collectors are permitted to send a consumer more than one validation notice, a best practice is to remove validation language from all letters excepted the first validation notice to minimize future mistakes. Think of it like this: you can wear socks while wearing sandals, but you really, really should not.
Appeals Court Affirms Dismissal of Second Avila Suit
The Court of Appeals for the Second Circuit has affirmed a lower court’s dismissal of a lawsuit filed by an individual with a name that many in the credit and collection industry will immediately recognize: Avila. More details here.
WHAT THIS MEANS, FROM MICHAEL KLUTHO OF BASSFORD REMELE: The takeaway – be accurate in what’s stated in your letters and you should win if challenged. This case involved a typical challenge commonly asserted by consumer counsel; namely, that by stating a consumer might be liable for “late charges and other charges,” with a tagalong claim that this statement was untrue, a collector allegedly runs afoul of the FDCPA.
But at oral argument, Plaintiff’s counsel’s admitted that if the debt were reinstated from default status, additional charges could be applied. This admission doomed the case. In short, this admission confirmed that the statement in the letter concerning potential “late charges and other charges” was not “impossible” meant the statement was truthful. Words matter. More important, admissions matter. And with that, the Second Circuit affirmed the district court’s dismissal of the case.
Agency Sued for Allegedly Violating FDCPA By Filing Suit in Improper Venue 15 Years Ago
A lawsuit has been filed against a collection agency for allegedly violating the Fair Debt Collection Practices Act by filing its own lawsuit 15 years ago in the wrong venue against an individual attempting to collect on an unpaid medical debt. More details here.
WHAT THIS MEANS, FROM MATT KIEFER OF THE PREFERRED GROUP OF TAMPA: Admittedly, I am not familiar with the particular laws of Indiana and if there could be a state claim that might mirror an FDCPA claim, but if this was in Florida I would think this case could be thrown out on MSJ. Fifteen years is way beyond the statute of limitation for bringing an FDCPA claim and to get a judgment in Florida you must have proof of service of process. In other words, when this would have gone to trial 15 years ago, there would have to be proof that the defendant was served. So to claim improper venue, and was not properly served could be easily proven or rather disproven through the paperwork filed with the court…at least one would think. Also, a judgment would have been recorded which would have needed to have been rerecorded, I believe every seven years for up to the 20 year period that a judgement can be recorded. That is, at least, my understanding.
FCC Commissioner Seeks Confirmation Whether Carriers Will Charge For Blocking Service
One of the five commissioners on the Federal Communications Commission has written a letter to 14 different phone carriers, seeking details on how each plans to roll out their call blocking services to customers and whether the carriers plan to offer the service for free or charge for it. More details here.
WHAT THIS MEANS FROM VIRGINIA BELL FLYNN OF TROUTMAN SANDERS: On June 6, the FCC voted to approve a Declaratory Ruling that encouraged (but did not mandate) carriers to automatically block calls their systems deem to be “robocalls” or spam or spoofed calls. It appears from the ruling that customers would not have to be notified of the calls that are blocked. The FCC encouraged the carriers to give customers the opportunity to opt-out of this service, if the consumers wish. The carriers will also be able to offer customers tools to block calls from anyone not in their phones’ contact lists or not on an approved “white list.”
On June 10, Commissioner Starks issued a letter to the carriers seeking information as to whether the carriers are going to provide this service, and, if so, how they intend to do so. Many in the industry believe this letter is an attempt to put pressure on carriers to take more responsibility when it comes to stopping the proliferation of “robocalls” or spoofed calls. Starks has previously been quoted as saying that rampant “robocalls have broken the phone service in this country.”
The sentiment in the letter reiterates Starks’ (and likely other Commissioners’) expectation that carriers will offer these blocking services to consumers and will do so free of charge. As a reminder, Starks has previously expressed interest in pursuing an FCC ban on charging for blocking services if carriers insist on such a charge.
From a practical perspective, the letter serves as a reminder that this roboblocking program will go into effect and fairly quickly. The real concern relates to what algorithm is used (and the specific metrics looked at) in determining what calls are “robocalls.” How are telephone numbers deemed “spoofed?” There are legitimate business calls that must be made and contact with company’s consumers that must occur. Companies should begin monitoring data as it relates to contact and telephone calls that connect.
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