Consumer Finance Litigation

In Smith v. Spizzirri, 2024 WL 2193872 (U.S. May 16, 2024), the United States Supreme Court issued a ruling holding that courts must stay, rather than dismiss, cases that are subject to arbitration. The unanimous decision resolves a circuit split on the issue and has far-reaching implications on the continued role of courts in cases subject to arbitration. 

The Federal Arbitration Act (FAA) sets forth procedures for enforcing arbitration agreements in federal court. Specifically, Section 3 of the FAA specifies that when a dispute is subject to arbitration, the court “shall on ...

Last Thursday, the Supreme Court upheld the Congressional funding mechanism used to fund the Consumer Financial Protection Bureau (CFPB), overruling a Fifth Circuit decision that found the funding mechanism violated the Constitution’s Appropriations Clause. Cons. Fin. Prot. Bureau et al. v. Cmty. Fin. Servs. Ass. of Am., Ltd., 601 U. S. ____ (2024). In an apparent break from recent decisions limiting certain agency’s powers, the Court held that the CFPB’s standing source of funding was constitutional even though such funding is outside the annual appropriations.

The ...

The United States District Court for the Northern District of Georgia has recently ruled that a consumer cannot maintain a claim under the Georgia Fair Business Practices Act (GFBPA) where the claim arises out of a loan transaction that is subject to state and federal regulations. In Baughman v. Truist Bank, No. 123CV03199JPBJKL, 2023 WL 6940698 (N.D. Ga. Sept. 19, 2023), plaintiff purchased a vehicle by executing a retail installment sale contract, which was later assigned to Truist Bank. The contract provided that the dealer would obtain an aftermarket warranty on the vehicle and ...

On June 23, 2023, in Coinbase v. Bielski, the Supreme Court issued a ruling holding that a district court must stay its proceedings while an interlocutory appeal of the issue of arbitration is ongoing. The 5-4 decision resolves a circuit split on the issue, and has far-reaching implications on motions to compel arbitration.

The case arose from a putative class action brought by plaintiff Abraham Bielski, on behalf of Coinbase users, in the U.S. District Court for the Northern District of California. The defendant Coinbase, an online cryptocurrency platform, file a motion to compel ...

On Monday, the Eleventh Circuit affirmed sanctions levied by the United States District Court for the Northern District of Georgia against the Consumer Financial Protection Bureau due to its conduct during discovery. The CFPB initiated the lawsuit in Consumer Financial Protection Bureau v. Brown, --- F.4th ---, 2023 WL 3939432 (11th Cir. June 12, 2023) against eighteen different defendants for allegedly engaging in or substantially assisting a fraudulent debt collection scheme. Thirteen of the defendants are alleged to have directly participated, while five of the defendants ...

In Pucillo v. National Credit Systems, Inc., No. 21-3131, 2023 WL 3090627 (7th Cir. Apr. 26, 2023), the Seventh Circuit Court of Appeals affirmed the district court's dismissal of the plaintiff's FDCPA claims for lack of Article III standing. The Seventh Circuit held that the plaintiff, a Chapter 7 bankruptcy debtor, did not allege a concrete injury where he asserted that the defendant's collection letters "confused," "scared," and "alarmed" him.

Factual and Procedural Background

Plaintiff Kenneth Pucillo, formerly known as Kenneth Lock, filed for Chapter 7 bankruptcy in May ...

In a recent opinion, the Second Circuit considered a second challenge to the funding structure of the CFPB, upholding it as constitutional.

On October 19, 2022, this issue was first considered by the Fifth Circuit in Community Financial Services Association of America, Ltd. v. Consumer Financial Protection Bureau, 51 F.4th 616 (2022). There, the court determined the payment structure established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376—which grants discretion to the director of the CFPB to draw funding for the Bureau ...

On Monday, February 27, 2023, the United States Supreme Court granted the petition for a writ of certiorari in the case Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd., No. 22-448, agreeing to hear the appeal filed by the CFPB.

In its petition, the CFPB sought review of the opinion rendered by the United States Court of Appeals for the Fifth Circuit on October 19, 2022, in which the Fifth Circuit struck down Congress’s mechanism for funding the CFPB and, consequently, vacated the Payday Lending Rule promulgated by the CFPB in 2017 ...

On January 11, 2023, the Third Circuit held that attempting to collect on a default judgment did not constitute using "'false, deceptive, or misleading' representations in connection with collecting the judgment" if the default judgment was later vacated. Lowe v. FBCS, Inc., No. 21-3307, 2023 WL 154970, at *1 (3rd Cir. Jan. 11, 2023).

Barbara Lowe (Lowe) filed a lawsuit claiming FBCS, Inc. (FBCS) and LVNV Funding, LLC (LVNV) (collectively, Defendants) violated the Fair Debt Collection Practices Act (FDCPA) by calling her to collect on a default judgment later vacated and declared ...

In Macris v. Specialized Loan Servicing, LLC, 2022 WL 16727611 (2d Cir. Nov. 7, 2022), the Second Circuit upheld summary judgment for a mortgage servicer, holding that the plaintiff could not pursue claims under the Fair Credit Reporting Act (FCRA) or the Fair Debt Collection Practices Act (FDCPA) for the reporting and collection efforts of his mortgage note.

The plaintiff had previously jointly owned a mortgaged property with his then-wife, but upon their divorce, his ex-wife assumed sole possession of the property and removed the plaintiff from the deed. Years later, the mortgage ...

In Magdy v. I.C. Sys., Inc., No. 21-3010, 2022 WL 4075764, at *1 (8th Cir. Sept. 6, 2022), the Eighth Circuit Court of Appeals, faced with a matter of first impression, held that a non-consumer attorney could not bring an FDCPA claim.

The facts of the case are straightforward. On July 27, 2020, Andrew Madgy (“Madgy”), a bankruptcy attorney, received a debt collection letter from I.C. System, Inc. (“ICS”). The letter identified Madgy as the attorney for a consumer named in the letter. The only problem – Madgy was not the consumer’s lawyer and the consumer had neither ...

In Tavernaro v. Pioneer Credit Recovery, Inc., No. 2:20-CV-02141-KHV-ADM, 2022WL3153234 (10th Cir. Aug. 8, 2022), the Tenth Circuit recently held that violations of the Fair Debt Collection Practices Act (“FDCPA”) are to be evaluated through the perspective of a reasonable consumer rather than the “least sophisticated consumer” standard adopted by other circuits.

In Pierre v. Midland Credit Management, Inc., — F.4th —, 2022 WL 986441 (7th Cir. Apr. 1, 2022), the Seventh Circuit affirmed the dismissal of a claim under the Fair Debt Collection Practices Act (“FDCPA”), finding that the plaintiff and the putative class which she represented suffered no concrete injury and therefore lacked Article III standing under the framework set out in Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) and TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). Plaintiff Renetrice Pierre filed a class action lawsuit, seeking to represent a class of Illinois ...

Following the Supreme Court’s decision in Spokeo, Inc. v. Robins, 578 U.S. 330 (2016), federal courts have continued to examine what is an injury in fact under the Fair Credit Reporting Act (“FCRA”). On April 4, 2022, the Eighth Circuit provided instructions on remand to dismiss a FCRA class action due to lack of standing in Schumacher v. SC Data Ctr., Inc., --- F.4th ----, 2022 WL 997742 (8th Cir. Apr. 4, 2022). Ria Schumacher applied for a position at SC Data and during the application process answered “no” to a question asking if she had been convicted of a felony. In connection ...

In Beal v. Outfield Brew House, LLC, --- F.4th ---, 2022 WL 868697 (8th Cir. Mar. 24, 2022), the Eighth Circuit considered whether an automated marketing system that was used to send promotional text messages to randomly selected phone numbers qualified as an ATDS within the purview of the TCPA. See id. at *1. The Eighth Circuit concluded that the automated marketing system did not "produce" telephone numbers to be called and, therefore, did not qualify as an ATDS. See id.

The case arose because the Appellants received promotional text messages from Outfield Brew House, LLC and/or ...

The latest update surrounding Hunstein v. Preferred Collection and Management Services, Inc., Case No. 19-14434 centers not on the Eleventh Circuit or the Hunstein decision itself but on the district courts nationwide that are considering numerous copycat cases relying on the Hunstein reasoning.

In one such recent case, Nabozny v. Optio Solutions, LLC, Case No. 21-cv-297-jdp, 2022 WL 293092 (W.D. Wis. Feb. 1, 2022), a district judge from the Western District of Wisconsin considered, and rejected, the plaintiff’s Hunstein argument, finding that Hunstein lacked persuasive ...

On November 30, 2021, the Bureau of Consumer Financial Protection's ("CFPB") October and December 2020 Final Rules take effect. Among other things, the October and December 2020 Final Rules address communications with consumers under the Fair Debt Collection Practices Act ("FDCPA"). Created in 1977, the FDCPA was intended to "eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent state action to protect ...

In Swann v. Dynamic Recovery Solutions, LLC, No. 4:18-CV-1000-VEH, 2018 WL 6198997 (N.D. Ala. Nov. 28, 2018), the Northern District of Alabama dismissed a putative class action case alleging a letter seeking to collect a time-barred debt violated the Fair Debt Collection Practices Act ("FDCPA").

The plaintiff, Susan Swann ("Plaintiff"), alleged that defendants Dynamic Recovery Services, LLC ("DRS") and Jefferson Capital Systems, LLC ("JCS") violated § 1692e and §1692f of the FDCPA. See generally id. Section 1692e prohibits debt collectors from "'us[ing] any false deceptive ...

For many of the claims asserted under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p (the "FDCPA"), courts are required to apply the "least sophisticated consumer" standard in evaluating the claim, an "objective" test that assesses the alleged violation from the perspective of the hypothetical "least sophisticated consumer." See Landeros v. Pinnacle Recovery, Inc., 692 F. App'x 608, 612-13 (11th Cir. 2017); see also Leonard v. Zwicker & Assocs., P.C., 713 F. App'x 879, 881-82 (11th Cir. 2017). But as the Eleventh Circuit again made clear earlier this month in Lait ...

In a case of first impression, the Eleventh Circuit recently held that a voicemail constitutes a "communication" under the FDCPA, and can thus trigger the mini-Miranda requirement, but an individual collecting on behalf of a debt collector is not required to disclose his or her identity in order to comply with the "meaningful disclosure" requirement under the FDCPA.

In Hart v. Credit Control, LLC, ___ F.3d ___, 2017 WL 4216029 (11th Cir. 2017), Plaintiff Stacey Hart filed suit alleging that Credit Control, LLC's voicemail violated § 1692e(11) of the FDCPA by failing to include the ...

On June 12, 2017, the Supreme Court in Henson v. Santander Consumer USA Inc. unanimously held that a debt buyer is not a "debt collector" as defined by the Fair Debt Collection Practices Act ("FDCPA") if it is regularly collecting debts that it owns, even if the debts were originated by a third party and purchased after default. Rather, according to the plain text of the statutory definition at issue, a debt buyer must be collecting debts owned by (and owed to) a third party in order to be considered a "debt collector" and therefore subject to the FDCPA.

The Court's analysis examined the ...

In Midland Funding, LLC v. Johnson, No. 16-348 (May 15, 2017), the U.S. Supreme Court held that a debt collector does not run afoul of the FDCPA by filing a proof of claim in bankruptcy on a stale debt. In its 5-3 decision, the Court sided with the majority of the federal courts of appeals to have considered the issue and reversed the Eleventh Circuit Court of Appeals, which had held that filing a proof of claim on a debt for which the statute of limitations had expired amounted to a "false," "deceptive," "misleading," "unconscionable," and "unfair" means of debt collection.

The case arose ...

In the wake of Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (May 16, 2016), the Supreme Court decision that had the chance to be legendary, but instead settled for punting back to the Ninth Circuit Court of Appeals, we are left wondering who the real winner was and what is the fallout for mere procedural violations of statutes for consumer claims?

Spokeo, Inc. v. Robins: Straight Back to the Ninth Circuit

In a 6-2 decision, with Justice Thomas concurring and Justices Ginsburg and Sotomayor dissenting, the Supreme Court held that that the Ninth Circuit Court of Appeals had failed to properly ...

In Kuntz v. Rodenburg LLP, No. 15-2777, - F.3d -, 2016 WL 5219884 (8th Cir. Sept. 22, 2016), the Eighth Circuit held that a law firm hired to collect a debt did not violate § 1692b(3) of the Fair Debt Collection Practices Act ("FDCPA") when it made multiple calls to a third party to obtain information about the debtor.[1] Section 1692b(3) prohibits debt collectors from communicating more than once with a person other than the debtor ("third party") in order to obtain information about the debtor's location unless the third party requests to be contacted or the debt collector "reasonably ...

In Marquez v. Weinstein, Pinson & Riley, P.S., No. 15-3273, - F.3d -, 2016 WL 4651403 (7th Cir. Sept. 7, 2016), the Seventh Circuit Court of Appeals held that a validation notice in a complaint to collect a debt violated the Fair Debt Collection Practices Act ("FDCPA"). The ruling interpreted § 1692e of the FDCPA, which prohibits debt collectors from using "any false, deceptive, or misleading representations or means in connection with the collection of any debt." 15 U.S.C. § 1692e. The Seventh Circuit found that the validation notice violated § 1692e because the validation notice was ...

In Dubois v. Atlas Acquisitions LLC, Case No. 15-1945 (4th Cir. Aug. 25, 2016), the Fourth Circuit Court of Appeals held in a 2-1 decision that filing proofs of claim on time-barred debts does not violate the Fair Debt Collection Practices Act ("FDCPA"), at least where state law preserves the right to collect on the payment. In so holding, the court sided with the Second and Eighth Circuit Courts of Appeals in a circuit split regarding the viability of FDCPA claims premised on proofs of claim filed in a debtor's bankruptcy case.

The Fourth Circuit first held that filing a proof of claim is ...

The Supreme Court's ruling in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (U.S. May 16, 2016), continues to have a substantial impact on federal courts, especially with respect to alleged statutory violations of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p (the "FDCPA"). In fact, just last week the Third Circuit Court of Appeals relied on the Spokeo decision in reversing a district court's order granting summary judgment in favor of the plaintiff in Bock v. Pressler & Pressler, LLP, No. 15-1056, 2016 WL 4011150 (3rd Cir. July 27, 2016). The plaintiff in Bock had alleged ...

In Jenkins v. Midland Credit Management, Inc.,[1] the U.S. Bankruptcy Court for the Northern District of Alabama held that the filing of a proof of claim based on a time-barred debt cannot give rise to a claim for damages under the Fair Debt Collection Practices Act ("FDCPA"), reasoning that any such claim is precluded by the Bankruptcy Code's comprehensive claims-allowance procedure. The court further held that the filing of a proof of claim on a stale debt does not merit sanctions under Bankruptcy Rule 9011 where the proof of claim is filed in compliance with the Code. Accordingly, the ...

In Cooper v. Fay Servicing, LLC, 2015 WL 4470213 (S.D. Ohio July 17, 2015), the mortgagors sued the servicer of their real estate loan asserting claims for alleged violations of Regulation X relating to the loss mitigation process. Critical to this case was the timing of the loss mitigation process that resulted in the alleged Regulation X violations, the date of the foreclosure filing, and the date of the foreclosure sale. Specifically, the foreclosure proceeding was initiated on January 4, 2014, six days prior to the effective date of the CFPB's new Mortgage Rules, while the alleged ...

The Eleventh Circuit Court of Appeals and Georgia Court of Appeals recently issued competing orders about mortgage borrowers' standing to challenge security deed assignments. Though the Eleventh Circuit affirmed that borrowers cannot challenge their security deed assignments when making wrongful foreclosure claims, the Georgia Court of Appeals found that borrowers can challenge their assignments under Georgia's Quiet Title Act. This newly-clarified distinction will perhaps provoke borrowers to file quiet title actions to frustrate Georgia foreclosure efforts in the ...

In Haynes v. McCalla Raymer, LLC, No. 14-14036, __ F. 3d __, 2015 WL 4188459 (11th Cir. July 13, 2015), the Eleventh Circuit Court of Appeals affirmed the Northern District of Georgia's grant of summary judgment in favor of Bank of America, N.A. ("BANA") on the mortgagors' wrongful foreclosure claim. The court held that the mortgagors lacked standing to challenge any alleged deficiencies in the assignment of the security deed from MERS to BANA and that the borrowers' own default, rather than any alleged defect in the foreclosure notice, led to the foreclosure. With respect to the ...

In Lankhorst v. Independent Sav. Plan Co., No. 14-11449, 2015 WL 3440288 (11th Cir., May 29, 2015), the Eleventh Circuit Court of Appeals held that the credit agreement the Plaintiff's entered into did not convey the requisite security interest in the Plaintiffs' primary residence in order to trigger the TILA protections on which the Plaintiffs relied. Therefore, the district court did not err in granting summary judgment in favor of the defendants. The Plaintiffs agreed to purchasing a water treatment system and having it installed in their home. However, the purchase and ...

Following the Eleventh Circuit's decision last year in Crawford v. LVNV Funding, LLC, the filing of a proof of claim on a time-barred debt in a bankruptcy case pending in the Eleventh Circuit's jurisdiction violates the Fair Debt Collection Practices Act, 15 U.S.C. § § 1692-1692p ("FDCPA"). But as the U.S. Bankruptcy Court for the Northern District of Alabama recently made clear in Gurganus v. Recovery Management Systems Corp. (In re Gurganus), No. 7:14-ap-70054-BGC, 2015 WL 65089 (Bankr. N.D. Ala. Jan. 5, 2015), before debtors start hauling creditors into court for something ...

The Eleventh Circuit Court of Appeals recently held that unaccepted Federal Rule of Civil Procedure 68 offers of judgment to the named plaintiffs that, if accepted, would have provided all relief that plaintiffs sought, neither moots the individual plaintiff's claims or the putative class action. Thus, the strategy to make an offer of judgment to render the case moot and prevent class certification may no longer be viable strategy in the Eleventh Circuit. In Stein v. Buccaneers Limited Partnership, --- F.3d ---, 2014 WL 6734819 (11th Cir. 2014), six named plaintiffs filed suit ...

In Crawford v. LVNV Funding, LLC, the Eleventh Circuit became the first federal circuit court of appeals to hold that filing a proof of claim on a time-barred debt in a bankruptcy case violates the Fair Debt Collection Practices Act ("FDCPA").[1] See No. 13-12389,__ F.3d __, 2014 WL 3361226 (11th Cir. July 10, 2014). The case arose when LVNV filed a proof of claim in Crawford's bankruptcy case on a debt for which the statute of limitations had expired. In response, Crawford filed an adversary proceeding against LVNV, alleging that LVNV routinely filed proofs of claim on time-barred debts ...

In Gruber v. Creditors' Protection Service, Inc., --- F.3d ---, 2014 WL 292086 (7th Cir. 2014), the Seventh Circuit Court of Appeals recently held that letters directing consumers to request verification rather than dispute the debt did not violate the FDCPA. The Seventh Circuit also held that the phrase "[w]e believe you want to pay your just debt" was mere puffery and did not violate the FDCPA. Plaintiffs filed lawsuits against separate defendants alleging that debt collection letters violated the FDCPA because they did not contain adequate notice required by section ...

In Murphy v. DCI Biologicals Orlando, LLC, No. 6:12-CV-1459-ORL, 2013 WL 6865772 (M.D. Fla. Dec. 31, 2013), a class action brought under the Telephone Consumer Protection Act ("TCPA"), the Middle District of Florida held that the plaintiff failed to state a claim because he had admittedly provided his cell phone number to the defendants, an act constituting "express consent" to be autodialed. The plaintiff in Murphy alleged that he had provided his cell phone number to the defendants, three affiliated companies involved in the collection and distribution of blood plasma, in ...

In Shadrach Lewis v. Marinosci Law Group, P.C., No. 13-61676-CIV, 2013 WL 5789183 (S.D. Fla. Oct. 29, 2013), the Southern District of Florida denied a defendant's motion to dismiss and rendered an important decision regarding a notice provision contained in a foreclosure proceeding as being a potential violation of the Fair Debt Collection Practices Act ("FDCPA"). Specifically, the plaintiff alleged that the notice provision, as required by the FDCPA, was nevertheless a violation of 15 U.S.C. § 1692e generally as well as § 1692e(10), in particular, as the statement relating to ...

The U.S. Court of Appeals for the Fourth Circuit recently held that waiving any and all claims as part of loan restructuring agreements applied to a claim under the Equal Credit Opportunity Act ("ECOA"). In Ballard v. Bank of America, N.A., --- F.3d ---, 2013 WL 5814757 (4th Cir. 2013), the plaintiff filed suit alleging that the lender violated the ECOA by requiring her to guarantee loans to her husband's business. The plaintiff's husband obtained a business loan and, after defaulting on the loan, sought to restructure the debt. The lender required the plaintiff to guarantee the ...

The U.S. District Court for the Eastern District of New York recently held that tax liens, which included municipal water and sewer charges, were not debts under the FDCPA. Additionally, the court found that efforts to foreclose tax liens constituted the enforcement of a security interest, which was not subject to the FDCPA.

In Boyd v. J.E. Robert Co., No. 05-CV-2455, 2013 WL 5436969 (E.D.N.Y. Sept. 27, 2013), plaintiffs filed a putative class action alleging violations of the FDCPA. After the District Court granted defendants' motions for summary judgment, plaintiffs filed a ...

The U.S. District Court for the Western District of Pennsylvania recently held that obtaining a credit report for assistance in the collection of a debt constitutes a permissible purpose under § 1681b(a)(3)(A) of the FCRA. In Fritz v. Capital Management Services, LP, No. 2:12-cv-1725, 2013 WL 4648370 (W.D. Pa. Aug. 29, 2013), the plaintiff filed suit against the defendant debt collector alleging violations of the FCRA after the defendant inquired into her credit history upon placement of plaintiff's account with the defendant. It was undisputed that the plaintiff never ...

In Reed v. Chase Home Finance, LLC, --- F.3d ----, 2013 WL 3868079 (11^th Cir. 2013), the Eleventh Circuit Court of Appeals evaluated one of the more recent additions to the Truth in Lending Act ("TILA"), 15 U.S.C. 1641(g), which requires a loan servicer to provide written notice of an assignment to the obligor. In Reed, the Plaintiff's claimed that Chase violated 1641(g) by failing to inform them that Chase had been assigned an interest in the Plaintiff's mortgage by virtue of an assignment of mortgage. However, the Eleventh Circuit affirmed the summary judgment entered in favor of ...

In Murphy v. DirecTV, Inc., --- F.3d ---, 2013 WL 3889158 (9th Cir. July 30, 2013), consumers brought a putative class action against DirecTV and Best Buy alleging violations of California's Unfair Competition Law and the Consumer Legal Remedies Act. Plaintiffs claimed that defendants purported to sell receivers and DVRs when, in fact, they were leased to consumers on unfair terms. Defendants moved to compel plaintiffs' claims to arbitration and the U.S. District Court for the Central District of California denied their motion on the ground that Discover Bank v. Superior Court, 113 ...

In Brown v. DIRECTV, LLC, No. CV 12-08382, 2013 WL 3273811 (C.D. Cal. June 26, 2013), the U.S. District Court for the Central District of California held that Telephone Consumer Protection Act ("TCPA") claims based on collection calls were arbitrable since they related to the customer agreement. Plaintiff Joshua Brown filed suit against DIRECTV and others alleging violations of the TCPA based on automated collection calls on his account. DIRECTV moved to compel Brown's claims to arbitration. Brown ordered DIRECTV satellite service online and was presented with "DIRECTV Terms and ...

The Second Circuit Court of Appeal affirmed the dismissal of a Fair Debt Collection Practices Act ("FDCPA") claim brought by a non-debtor under the mootness doctrine after an offer of judgment conveyed orally in open court was rejected. In Doyle v. Midland Credit Management, Inc. ---- F. 3d ---, 2013 WL 3242148 (2d Cir. June 28, 2013), the Second Circuit held that an offer of judgment need not comply with the offer of judgment rule in order to render a case moot. Doyle filed suit against Midland alleging that Midland had harassed him, failed to disclose Midland was a debt collector, and made ...

In matter of first impression, the U.S. Court of Appeals for the Second Circuit recently held that section 1692g(a)(3) does not require a debtor to dispute a debt in writing. The court noted the circuit split on this issue and acknowledged that the Third Circuit has held that a notice requiring the debtor to dispute the debt in writing does not violate the FDCPA. See Graziano v. Harrison, 950 F.2d 107 (3d Cir. 1991). Conversely, the Ninth Circuit has held that it does. See Camacho v. Bridgeport Financial, Inc., 430 F.3d 1078 (9th Cir. 2005). In Hooks v. Forman, Holt, Eliades & Ravin, LLC

Judge Phyllis J. Hamilton of the Northern District of California, in Roberts v. Paypal, Inc., 2013 WL 2384242 (N.D. Cal. May 30, 2013), has added to the growing list of cases which hold that when a consumer supplies their cellular telephone number to a business, that consumer has supplied the necessary prior express consent to receive certain calls otherwise prohibited by the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. 227(b)(1). In the absence of prior express consent, or other extenuating circumstances, the TCPA prohibits, among other things, telephone calls to a ...

In a consolidated appeal of two cases from the United States Bankruptcy Court for the Middle District of Alabama, the United States District Court for the Middle District of Alabama held last week that the filing of a proof of claim in a debtor's bankruptcy case does not amount to an FDCPA violation. See Crawford v. LVNV Funding, LLC, Case No. 2:12-cv-701-WKW, Doc. 18 (M.D. Ala. May 9, 2013). The plaintiff-debtors had appealed the dismissal of their adversary complaints which asserted FDCPA claims against creditors who allegedly filed proofs of claim on time-barred debts in their ...

In Mais v. Gulf Coast Collection Bureau, Inc., 2013 WL 1283885, 11-CV-61936 (S.D. Fla. March 27, 2013), Judge Robert N. Scola of the District Court for the Southern District of Florida issued an important opinion concerning the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C § 227(b)(1)(A)(iii), in a case dealing with one of the more troubling trends in TCPA litigation - efforts to hold individual officers or stakeholders of TCPA defendants individually liable. In Mais, Jack W. Brown III ("Brown") was named a defendant in a putative TCPA class action. Brown was allegedly the ...

In Manno v. Healthcare Revenue Recovery Group, LLC, 2013 WL 1283881, 11-cv-61357 (S.D. Fla. March 26, 2013), Judge Robert N. Scola of the District Court for the Southern District of Florida certified a Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227(b)(1)(A)(iii), and Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § § 1692e(11) and 1692d(6), class action over the objection of the Defendant. The Defendant objected to the Plaintiff's standing on both Article III constitutional grounds and based upon the alleged lack of statutory standing under the TCPA. The ...

In Joy v. MERSCORP, Inc., No. 5:10-CV-218-FL, 2013 WL 1246856 (E.D.N.C. Mar. 27, 2013), the Eastern District of North Carolina held that a borrower stated a claim for a violation of the FDCPA against a loan servicer in connection with documents filed in foreclosure proceedings. The plaintiff sued several defendants alleging a violation of § 1692e of the FDCPA claiming that the defendants filed false, deceptive, and misleading documents in connection with foreclosure proceedings. Nationwide Trustee Services, Inc. ("Nationwide") moved for a judgment on the pleadings, and Litton ...

The Tenth Circuit recently held that a borrower presented sufficient evidence of actual damages to sustain a FCRA claim against a loan servicing company. The Tenth Circuit also affirmed the district court's decision to dismiss the FCRA claim with respect to a willful violation and the FDCPA claim. In Llewellyn v. Allstate Home Loans, Inc., --- F.3d ---, 2013 WL 1238615 (10th Cir. Mar. 28, 2013), the plaintiff filed suit against a loan servicing company and law firm retained to commence foreclosure proceedings alleging violations of the FDCPA, FCRA, and state law. The district court ...

A federal court in Illinois recently denied a motion for class certification of a TCPA claim due to the predominance of individualized issues of proving whether the putative class members had consented to the defendant's phone calls. The case illustrates the point that defining a class to include only those debtors who had not provided their phone numbers to the original creditor in a transaction does not always eliminate the individualized nature of the issue of consent. In the case, Jamison v. First Credit Services, Inc., 2013 WL 1248306 (N.D. Ill. Mar. 28, 2013), the named plaintiff ...

In O'Bryne v. Portfolio Recovery Associates, Inc., No. cv447-IEG (NLS), 2013 WL 1223590 (S.D. Cal. Mar. 26, 2013), the Southern District of California held that a debt collector did not violate the Fair Debt Collection Practices Act ("FDCPA") by seeking to collect principal, interest, and fees in a collection lawsuit under the common law theories of account stated and assumpsit. The defendant in O'Bryne, a debt collector, filed suit in California state court against the plaintiff-debtor seeking to recover a debt under various common law theories. The debtor subsequently brought ...

In Campbell v. Credit Protection Ass'n, L.P., No. 4:12CV00289AGF, 2013 WL 1282348 (E.D. Mo. Mar. 27, 2013), the Eastern District of Missouri granted summary judgment in favor of a debt collector on a debtor's claims under the Fair Debt Collection Practices Act ("FDCPA") based upon the debt collector's collection letter and credit reporting activities, holding that a debtor must come forward with evidence beyond self-serving allegations to avoid summary judgment. The defendant in Campbell, a debt collector named Credit Protection Association, sent the plaintiff-debtor a ...

In Stinson v. Receivables Management Bureau, Inc., No. 2:12-cv-02558, 2013 WL 1278966 (N.D. Ala. Mar. 26, 2013), an Alabama federal court recently held that a debt collector's telephone calls made to a non-debtor did not violate the FDCPA when the actual debtor provided the telephone number and the non-debtor plaintiff failed to inform the debt collector of the error. Plaintiff Jesse Stinson filed suit against Receivables Management Bureau, Inc. ("RMBI") alleging violations of the FDCPA and state law after RMBI made several telephone calls to his house attempting to collect a debt ...

For the first time, a federal court in Alabama addressed preemption under the Dodd-Frank Act. Under the Dodd-Frank Act, subsidiaries and affiliates of national banks can no longer argue that state laws are preempted. While the court held that the Dodd-Frank Amendment did not apply retroactively and found that the plaintiffs' claims were preempted, it noted the changed status of subsidiaries and affiliates of national banks in light of the Dodd-Frank Amendment. In Selman v. CitiMortgage, the plaintiffs filed suit against their mortgage loan servicer, the investor, and the insurer ...

In Caprio v. Healthcare Revenue Recovery Group, LLC, --- F.3d ---, 2013 WL 765169 (3d Cir. Mar. 1, 2013), the U.S. Court of Appeals for the Third Circuit recently held that language in a debt collection letter asking the plaintiff to "please call" if the plaintiff disputed the amount owed violated the debt validation and false representation provisions of the FDCPA. Plaintiff Ray Caprio filed a putative class action against Healthcare Revenue Recovery Group, LLC ("HRRG") alleging violations of § § 1692g and 1692e(10) of the FDCPA based on a collection letter he received that contained ...

A recent federal court decision, Rogers v. Virtuoso Sourcing Group, LLC, 2013 WL 772865, 12-CV-01511 (S. D. Ind. Feb. 28, 2013) sheds new light on whether the Fair Debt Collection Practices Act ("FDCPA") requires a debt collector to affirmatively undertake to update its credit reporting to reflect a dispute by the consumer concerning the validity of the debt. The District Court for the Southern District of Indiana held that the FDCPA, specifically those provisions found at 15 U.S.C 1692e(8), contains no such affirmative requirement when the dispute is tendered to the debt collector ...

On October 5, 2012, the U.S. District Court for the Eastern District of Tennessee analyzed the interplay between the debt collection industry and certain provisions of the Truth-in-Lending Act ("TILA") that require "creditors" to send monthly account statements to borrowers. In King v. AllianceOne Receivables Mgmt., Inc., No. 2:12-CV-314, 2012 WL 4758220, at 2-3 (E.D. Tenn. Oct. 5, 2012), the defendant debt collector sent a collection letter on behalf of the creditor. The letter stated:

As of the date of this letter, you owe $888.45. Your account balance may be periodically ...