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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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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Second Circuit Rejects Alleged Duty to Itemize in an FDCPA validation Notice

In the latest decision on the adequacy of validation notices the Second Circuit Court of Appeals has rejected a plaintiff’s Argument that an FDCPA validation notice must itemize the component elements of the debt.  The court of appeals held that “a debt collection letter that informs the consumer of the total, present quantity of his…

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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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Credit Reporting: Need to do it right the first time every time

As with so many things in life, credit reporting is something that if done must be done precisely. Errors impact not only the credit reporting system and business decision making but it also impacts real people. A recent consent order pointed out how even innocent errors can harm individuals and violate the law. The use…

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Supreme Court to Consider Role of District Courts in Reviewing Agency Rules

Supreme Court to Consider Role of District Courts in Reviewing Agency Rules In granting certiorari in the case of Carlton & Harris v. PDR Network, LLC, the United States Supreme Court appears poised to guide district courts in their interpretation of administrative agency rules.  The facts of the case are straightforward.  Carlton & Harris, a…

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Minnesota Fines Collection Agency for Violating Escheat Laws and Inadequate CMS

The Minnesota Department of Commerce has entered into a consent order with Range Credit Bureau, Inc.  The order fines the collection agency for a number of practices including: noncompliance with State escheat laws by failing file reports of Unclaimed Property for funds owed to customer who failed to negotiate refund or payment checks; failing to…

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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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