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 Woods v. LVNV Funding, LLC, --- F. 4th --- (2022), the Seventh Circuit Court of Appeals affirmed the dismissal of FDCPA and FCRA claims based upon the defendants’ collection and reporting of a fraudulently opened account.
The plaintiff, Kevin Woods, alleged someone opened an American Airlines credit card account in his name and purchased a one-way flight. American closed the account and sold it to LVNV Funding, LLC, which placed it with Resurgent Capital Services, L.P. for collection. When Woods received collection letters, he disputed the debt and told Resurgent the account ...
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 ...
In the latest development in Hunstein v. Preferred Collection and Management Services, Inc., Case No. 19-14434, the full Eleventh Circuit Court of Appeals has vacated the previous panel’s opinion and will rehear the case en banc at a later date. In the original Hunstein opinion, the court reversed the dismissal of an action brought under the Fair Debt Collection Practices Act (“FDCPA”) that alleged a debt collector had violated the third-party disclosure provisions of the FDCPA by using a third-party mail vendor. The decision sent shockwaves through the debt collection ...
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 ...
On August 31, 2021, the Seventh Circuit Court of Appeals reversed a summary judgment decision from the United States District Court for the Northern District of Illinois, and remanded the action with instructions to dismiss for lack of subject matter jurisdiction. See Wadsworth v. Kross, Lieberman & Stone, Inc., No. 19-1400, 2021 WL 3877930 (7th Cir. 2021). The Seventh Circuit reasoned Plaintiff’s lack of Article III standing with respect to her claims brought pursuant to the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § § 1692 et seq.
As background ...
The ruling by the Eleventh Circuit Court of Appeals in Richard Hunstein v. Preferred Collection and Management Services, Inc. raises significant concerns for debt collectors who use vendors for mailing and other types of services that require the sharing of information relating to consumer debts. By ruling that such arrangements can violate the prohibition on sharing information about consumer debts with third parties under section 1692c(b) of the Fair Debt Collection Practices Act ("FDCPA"), the panel’s decision has forced many debt collectors to rethink existing business ...
On May 7, 2019, the Consumer Financial Protection Bureau (“Bureau” or “CFPB”) issued a Notice of Proposed Rulemaking (“NPRM”) to implement the Fair Debt Collection Practices Act (“FDCPA”). The full NPRM is 538 pages and can be found here. Among other things, the proposal attempts to set limits on the number of calls that debt collectors may place on a weekly basis, clarify how collectors may communicate using new technologies and require collectors to provide additional information to consumers to help them identify debts. The Bureau has set a deadline of Monday ...
For the third time in less than two years, the Eleventh Circuit Court of Appeals has ruled that a chapter 7 debtor who does not reaffirm secured debt or redeem the property must surrender the property. In re Woide, No. 17-10776 (11th Cir. Apr. 5, 2018).
In Woide, the debtors filed a chapter 13 bankruptcy petition, and on schedule A, listed their real property and stated "to be surrendered." The case was later converted from chapter 13 to 7, and the debtors did not file any statement of intention with respect to the property. After the close of the debtors' bankruptcy case, the secured creditor ...
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 ...
On November 18, 2016, the United States District Court for the Middle District of Florida held that the communication of an unequivocal and non-coercive settlement offer does not violate the Fair Debt Collection Practices Act (the "FDCPA"). Vazquez v. Prof'l Bureau of Collections of Maryland, Inc., -- F. Supp. 3d --, 2016 WL 6822480, at *2 (M.D. Fla. Nov. 18, 2016). In Vazquez, the plaintiff alleged that a debt collector violated section 1692c(c) of the FDCPA by sending a communication offering to settle a debt (the "Settlement Offer") after the plaintiff disputed the debt. Id. at *1 ...
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 Edwards v. Macy's, Inc., --- F. Supp. 3d ---, 2016 WL 922221 (S.D.N.Y. Mar. 9, 2016), the U.S. District Court for the Southern District of New York recently held that state law claims arising from plaintiff's enrollment in a debt cancellation program were preempted by the National Bank Act ("NBA") and accompanying regulations promulgated by the Office of the Comptroller of the Currency ("OCC"). Further, the court held that the claims against both the national bank and the corporation acting on behalf of the national bank were preempted, even though the corporation was not a ...
In Davidson v. Capital One Bank (USA), N.A., a case closely followed by the financial services industry and handled by Burr & Forman, LLP, the Eleventh Circuit held that an entity collecting a debt that was acquired after default, and which the entity now owns, is not a "debt collector" under the Fair Debt Collection Practices Act ("FDCPA") unless the principal purpose of the entity's business is the collection of debts or the entity regularly collects debts owed to others. In so holding, the Eleventh Circuit broke from the large majority of courts (including the Third, Seventh, and ...
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 ...
Declining to follow the majority of district court decisions within its circuit, the U.S. Court of Appeals for the Sixth Circuit, in Glazer v. Chase Home Finance LLC, --- F.3d ---, 2013 WL 141699 (6th Cir. Jan. 14, 2013), recently held that mortgage foreclosure constitutes debt collection under the Fair Debt Collection Practices Act ("FDCPA"). A borrower filed suit against his mortgage servicing company and its debt collection law firm, alleging violations of the FDCPA and state law arising out of a foreclosure action. The mortgage servicer and law firm moved to dismiss Glazer's ...
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 ...