(855) 456-2240

N.Y. DFS Provides Insight on Key Provisions of Its Debt Collection Regulations

Rule 1.2 Rule 1.2 requires the debt collector, within five days of the initial communication concerning the collection of a debt, to disclose that certain types of income are exempt from collection if a money judgment is entered against the consumer. The industry has raised concerns that including this exempt income language on communications to consumers whose debts are barred by the statute of limitations could expose them to liability under the Fair Debt Collection Practices Act (FDCPA). Specifically, consumer advocates could argue such language constitutes a threat to file a lawsuit on out-of-statute debt, which is an FDCPA violation. This language is required for out-of-statute debt communications. […]

2020-10-06T23:42:16+00:00Tags: |

Sixth Circuit Rules Against Collection Agency in FDCPA Out-of-Statute Debt Collection Case

Court reverses district court decision in Buchanan holding that an offer to settle a stale debt may misleadingly imply a threat of litigation in violation of the FDCPA. The Sixth Circuit Court of Appeals issued a 2-1 ruling in Buchanan v. Northland Group, Inc., No. 13-2523 (6th Cir., Jan. 13, 2015), on Jan. 13, 2015. The ruling reversed the trial court’s dismissal of a Fair Debt Collection Practices Act (FDCPA) action that challenged a dunning (collection) letter offering to settle a debt subject to the statute of limitations. At issue in the Buchanan appeal was the district court’s decision that a debt collector does not mislead a consumer and therefore does […]

2020-10-06T23:42:17+00:00Tags: |

New York, Zombie Debt and the CFPB

Earlier this month, New York adopted enhanced consumer debt collection regulations proposed by the New York State Department of Financial Services (NYDFS). The regulations, among other things, require debt collectors to provide consumers additional disclosures, entitle consumers to more information about the money they owe and make it more difficult to collect on time-barred or “zombie” debt. For example, prior to collecting any payment, the collector must notify the consumer if the statute of limitations has expired and that, if the consumer is sued on the debt, the consumer may be able to avoid a judgment by informing the court that the debt is time-barred. This is in direct […]

2020-10-06T23:42:17+00:00Tags: |

Eigth Circuit Decision: Sarah McIvor v. Credit Control Services, Inc.

Is a communication between a debt collector and a credit reporting agency a communication “in connection with the collection of any debt” for purposes of the FDCPA? In a case in which the Eighth Circuit actually found against a debtor on her claim against a collection agency based on the FDCPA, the court nevertheless adopted a standard followed by other circuits in defining when a communication is “…in connection with the collection of any debt” for purposes of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seq. Sarah McIvor v. Credit Control Services, Inc., No. 14-1164 (December 4, 2014). Sarah McIvor alleged that she disputed a debt to […]

2020-10-06T23:42:17+00:00Tags: |

Collection Agency Asks Third Circuit to Rehear Precedential FDCPA Case

In the first U.S. case involving alleged FDCPA violations arising from use of modern technology that generated and disclosed an innocuous internal tracking number, which had no capacity to identify or expose the consumer’s personal financial information, collection agency urges the Third Circuit to reconsider its erroneous decision. Convergent Outsourcing filed a Petition for Rehearing En Banc or Panel Rehearing (the “Petition”) with the Third Circuit Court of Appeals in Douglass v. Convergent Outsourcing, No. 13-3588, 2014 WL 4235570, — F.3d — (3d Cir. 2014).  The Collection Agency requested that the Third Circuit revisit the appellate decision issued in Douglass by the three-judge panel just two weeks ago, which ruled that the disclosure […]

2020-10-06T23:42:17+00:00Tags: |

Fallout Growing from FDCPA Decision on Proof of Claim on Time-Barred Debt

A U.S. Circuit Court decision this summer took an extraordinary step when it held that filing a proof of claim on time barred debt is conduct that violates the FDCPA. At the time, attorneys close to both bankruptcy and FDCPA proceedings warned that it would touch off a very real firestorm in that sector. That has proven to be quite true. It has been several months since the Eleventh Circuit handed down its decision in Crawford v. LVNV Funding, holding that filing a proof of claim on “time-barred” debt violates the FDCPA. The request for rehearing was denied. A Multitude of Crawford-type Claims While it was a safe bet a new round of […]

2020-10-06T23:42:17+00:00Tags: |

Breaking Down the Second Circuit’s Recent Decision Regard Disclosure Disputes

What Debt Collectors Need to Know The Second Circuit’s recent decision in Hooks v. Forman has received quite a bit of attention since it was handed down May 29, 2013.  The case held that a disclosure made pursuant to 1692g(a) violated the Fair Debt Collection Practices Act when it instructed the recipient of the letter that if she wished to dispute the debt, she could only do so in writing. The decision recognized that under section 1692g, some disputes can be verbal. It also recognized that under other sections (particularly sections 1692g(a)(4) and 1692g(b), a dispute must be in writing to be effective. Most debt collectors have 1692g disclosures that closely […]

2020-10-06T23:42:17+00:00Tags: |

Dunning Letters as to Time-Barred Debt Can Violate Fair Debt Collection Practices Act (FDCPA)

The United States Court of Appeals for the Seventh Circuit (Wisconsin, Illinois, Indiana) has recently ruled that collection or “dunning” letters sent after the expiration of the applicable statute of limitations violate the Fair Debt Collection Practices Act (“FDCPA”) unless they also disclose that the debt may be time-barred. 15 U.S.C. § 1692e and § 1692f of the FDCPA prohibit debt collectors from making “any false, deceptive, or misleading representation or means in connection with the collection of any debt” (which includes a false representation of the character, amount, or legal status of any debt), and from using any “unfair or unconscionable means to collect or attempt to collect any debt.” […]

2020-10-06T23:42:17+00:00Tags: |

FDCPA: Split Among the Circuits Regarding the Validation of Debts and Disputes

There is a split of authority among the circuits as to whether or not a debtor must articulate a dispute in writing under the validation of debts section of the Fair Debt Collection Practices Act (FDCPA), specifically 15 USC 1692g(a)(3). This is certainly a topic for servicers to monitor because of the strict liability penalties imposed by the FDCPA. 15 USC 1692g states: (a)  Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written […]

2020-10-06T23:42:17+00:00Tags: |

Collection Letter Requiring Written Dispute Violated FDCPA, Second Circuit Holds

A collection letter violated the Fair Debt Collection Practices Act (FDCPA) because it stated that the debtor could only dispute the debt in writing, the U.S. Court of Appeals for the Second Circuit has ruled. In Hooks v. Forman, Holt, Eliades & Ravin, LLC, the Second Circuit vacated the district court’s dismissal of the complaint for failure to state a claim. Applying the “straightforward language of the statute,” the court held that the FDCPA does not require a written dispute to avoid an assumption by the debt collector that the debt is valid. The Second Circuit distinguished language in different portions of FDCPA Section 1692g, with certain portions requiring […]

2020-10-06T23:42:17+00:00Tags: |