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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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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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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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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Seventh Circuit Vacates Fee Award Based on Mootness

The United States Court of Appeals for the Seventh Circuit has vacated an award of over $70,000 in fees and costs to a prevailing plaintiff in an FDCPA case.  In Portalatin v. Blatt, Hasenmiller, Leibsker & Moore, LLC, the plaintiff sued a law firm and its debt-buyer client for filing suit in the wrong venue…

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Supreme Court Rejects Discovery Rule in FDCPA Cases

The United States Supreme Court has affirmed the Third Circuit Court of Appeals’ decision in Rotkiske v. Klemm, holding that Section 1692k(d) of the FDCPA “unambiguously sets the date of the violation as the event that starts the one-year limitations period.” The decision overrules cases from multiple circuits that have allowed application of the “discovery…

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Court Rules “Informational” Letters Did Not Violate Discharge

A recurring problem in bankruptcy is how lenders can provide information about a debt to a borrower without violating the discharge or the automatic stay.    In some cases the borrower may wish to continue making payments and would appreciate receiving payment notices.   In other cases, the lender may be required to send notices to the…

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Proofs of Claim on Time-Barred Debts Do Not Violate the FDCPA

A divided Supreme Court has ruled in Midland Funding, LLC v. Johnson that filing a time-barred proof of claim in bankruptcy does not violate the Fair Debt Collection Practices Act.  The opinion by Justice Breyer was joined by four conservative justices.  The opinion drew a dissent from Justice Sotomayor who was joined by Justices Ginsberg…

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CFPB Annual FDCPA Report – An Introduction

The Consumer Financial Protection Bureau issued its annual report to Congress on the Fair Debt Collection Practices Act.  As always, this report mixed a healthy dose of natural, self-congratulatory rhetoric with significant insights to the state of the industry and the regulatory environment.  While future posts will address specific issues raised by the report,   the…

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