Sixth Circuit Decision Highlights the Risk of Initiating Collection Remedies During the FDCPA’s Validation Period

Section 1692g(a) of the FDCPA mandates the sending of a “validation” notice within five days of a debt collector’s initial communication with a consumer. Section 1692g(b) provides that if the consumer provides timely, written invocation of his or her rights, the debt collector must cease all of its collection efforts until it has complied with…

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Supreme Court Rules that an Ambiguous Agreement Cannot Be a Basis to Compel Class Arbitration

In Stolt-Nielsen S. A. v. Animal Feeds Int’l Corp., the Supreme Court held in 2010 that a court may not compel arbitration on a class-wide basis when an agreement is “silent” on the availability of class arbitration.  The court recognized in Stolt and later cases that  class arbitration fundamentally changes the nature of the “traditional…

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Supposed Rejection of Arbitration Clause is Rejected

A clever debtor was nevertheless unsuccessful in trying to use the Bankruptcy Code to escape a well-drafted arbitration clause contained in a credit card agreement.  In Mines v. Galaxy Int;l Purchasing, Mines filed a putative class action contending that Galaxy violated Section 1692g(a)(2) of the FDCPA by failing to identify the current owner of his…

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Supreme Court Excludes Non-Judicial Foreclosure From FDCPA

On March 20, 2019, the United States Supreme Court issued its decision in Obduskey v. McCarthy & Holthus, LLP, holding that that business engaged solely in non-judicial foreclosure activities are generally exempt from the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. Justice Breyer wrote for a unanimous court, with a concurring…

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USAA Consent Order: The Criticality of Sensible Procedures

Last week, the CFPB issued its first consent order of 2019 and the its first consent order under Director Kathleen L. Kraninger. The Consent Order is with USAA Federal Savings Bank dealing with violations of the Electronic Funds Transfer Act, 15 U.S.C. § 1693, et seq., its implementing regulation, Regulation E, 12 C.F.R. pt. 1005,…

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Seventh Circuit Allows Non-Debtor to Allege Consumer Status

The United States Court of Appeals for the Seventh Circuit has reversed a district court’s dismissal of an FDCPA action, reinstating a suit by a plaintiff who claims never to have been the debtor on the account in question. In Loja v. Main St. Acquisition Corp., Defendant Main Street was the purchaser of a Washington…

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