CEB Prac. Guide § 2A.34 -- Communications with the Debtor -- False or Misleading Representations

In McRobie v. Credit Protection Association, 2018 WL 5608121 (E.D.Pa. 2018), Judge Leeson held that a red, white, and blue texted envelope that said “official notice” on it did not constitute misrepresenting that the communication was from a government official under the FDCPA. Case law interpreting § 1692e(9) is sparse. The parties cite no Third Circuit precedent interpreting the provision;… Read More

In Vangorden v. Second Round, Limited Partnership, 2018 WL 3595759, at *4–5 (2nd Cir., 2018), the Court of Appeals discussed whether the validation process must first be engaged by the consumer before the consumer can state a claim. Second Round argues that it is evident from this statutory scheme—which affords consumers the right to dispute debts, precludes efforts to collect… Read More

In Coyne v. Midland Funding LLC, 2018 WL 3423469, at *2–3 (8th Cir. 2018), the Court of Appeals for the Eighth Circuit held that an FDCPA Plaintiff had pleaded a claim against a debt collector based on their claim that the debt collector's dunning letter had compounded interest in violation of state law and the contract forming the obligation. It is undisputed that Minnesota… Read More

In McNair v. Maxwell & Morgan PC, 2018 WL 3097153 (9th Cir. 2018), the Court of Appeals for the Ninth Circuit clarified when attorneys are engaged in debt collection under the FDCPA. Our decision in Ho does not, however, preclude FDCPA liability for an entity that seeks to collect a debt through a judicial foreclosure scheme that allows for deficiency… Read More

In Johnson v. Enhanced Recovery Company, LLC., 2018 WL 2057798, at *2–3 (N.D.Ind., 2018), Judge Simon certified an FDCPA class action over the defendant's objection. ERC also argues that the FDCPA claim here depends on a material misrepresentation, and that “[w]hether any statements resulted in a material misstatement that actually affected the recipient’s decision-making is an issue that cannot be… Read More

In Evans v. Portfolio Recovery Associates, LLC, 2018 WL 2035315, at *5–7 (C.A.7 (Ill.), 2018), the Court of Appeals for the Seventh Circuit held that a debt collector violates the FDCPA when the debt collector receives an (untimely) dispute from a debtor in response to a 30-day validation letter and thereafter reports the account to a consumer reporting agency without reporting… Read More

In Hill v. Accounts Receivable Services, LLC, 2018 WL 1864720, at *1–2 (8th Cir. 2018), the Court of Appeals for the Eighth Circuit joined other circuits to adopt a materiality standard for 1692e claims and also rejected the "ipso facto" rule for debt collectors who lose debt collection litigation. In Hahn v. Triumph Partnerships LLC, 557 F.3d 755 (7th Cir. 2009),… Read More

In Echlin v. PeaceHealth, 2018 WL 1801582, at *5–6 (C.A.9 (Wash.), 2018), the Court of Appeals for the Ninth Circuit held that a debt collector who engaged meaningfully in the debt collection process did not engage in “flat rating”. Echlin primarily argues that CCI did not meaningfully participate in the attempts to collect her debts because CCI did not engage… Read More

In CFPB v. Weltman, Weinberg & Reid, Co., 2018 WL 1709408, at *3 (N.D.Ohio, 2018), Judge Nugent denied the CFPB’s and a debt collection law firm’s motions for summary judgment as to whether the law firm had meaningful involvement in the collection of the debts. Interestingly, the law firm defended the CFPB’s MSJ on the basis that the law firm… Read More

In Tatis v. Allied Interstate, LLC., 2018 WL 818004, at *3 (C.A.3 (N.J.), 2018), the Court of Appeals for the Third Circuit held that a letter that offered to "settle" a time-barred debt could be deceptive. Thus, Huertas stands for the proposition that debt collectors do not violate 15 U.S.C. § 1692e(2)(A) when they seek voluntary repayment of stale debts, so… Read More

In Lindblom v. Santander Consumer USA, Inc., 2018 WL 573356, at *5 (E.D.Cal., 2018), Judge McAuliffe found that the class representative was not typical because her claim fell outside the statute of limitations and was not subject to equitable tolling. As proposed by Plaintiff, the class definition includes individuals who paid Speedpay fees during the applicable limitations period, which is on… Read More

In Lindblom v. Santander Consumer USA Inc., 2018 WL 500347, at *6–7 (E.D.Cal., 2018), Magistrate Judge McAuliffe denied an automobile finance company's summary judgment in a class action complaining that its SpeedPay program violated the Rosenthal Act. Defendant does not contend that the Speedpay fee is written or otherwise expressly authorized in the Contract. Rather, Defendant concedes that Contract is… Read More

In Powell v. Aldous & Associates, P.L.L.C., 2018 WL 278736, at *7–8 (D.N.J., 2018), Judge McNulty dismissed an FDCPA class action based on a letter that allegedly falsely threatened legal action.  Judge McNulty found that the letter did no such thing. Powell claims that the Aldous letter threatens legal action in violation of Section 1692e(5). In that respect, he argues, this… Read More

In Muharemovic v. Client Services, Inc., 2017 WL 6316827, at *4 (E.D.Mo., 2017), the District Court granted in part and denied in part a debt collector's letters that were challenged as falsely threatening litigation.  The letters stated that "If we are unable to arrange repayment, Capital One will send your account to an attorney in your state for possible legal action. Please… Read More

In Ordinario v. LVNV Funding, LLC., et. al., 2017 WL 6047551, at *1–2 (9th Cir. 2017), the Court of Appeals held in an unpublished opinion that a debt collector did not file suit on a time-barred debt because the credit card debt's statute of limitations had not expired. Ordinario's entire FDCPA and Rosenthal Act action is based on the claim… Read More

In Arias v. Gutman, Mintz, Baker & Sonnenfeldt, LLP, 2017 WL 5330081 (C.A.2 (N.Y.), 2017), the Court of Appeals for the Second Circuit did not adopt the argument adopted by other courts that the FDCPA's "general" prohibitions cannot provide an additional basis for liability when there already is a "specific" prohibition set forth elsewhere in the FDCPA. Franklin Arias claims… Read More

In Hedayati v. The Perry Law Firm, 2017 WL 4864491, at *7 (C.D.Cal., 2017), Judge Carter held a bench trial regarding the Plaintiff's claim that the defendant wrongfully attempted to collect a debt from him that, in reality, was owed by his brother.  Judge Carter found no false statements made to the Plaintiff, and imposed a reality check on the… Read More

In Afewerki v. Anaya Law Group, 2017 WL 3567829, at *4–5 (9th Cir. 2017), the Court of Appeals for the Ninth Circuit held that a misstatement of the debt in a debt collection complaint was material. We agree and conclude that Anaya Law Group's $3,000 overstatement of the principal due in the state court complaint,2 exacerbated by the statement of an… Read More

In McWhorter v. Ocwen Loan Servicing, LLC, No.: 2:15-cv-01831-MHH, 2017 WL 3315375 (N.D. Ala. August 3, 2017), Judge Haikala found that a defendant’s charging of fees associated with telephonic Speedpay fees stated a claim under the FDCPA. When Mr. McWhorter and Mr. Fielder made loan payments to Ocwen online and over the telephone, Ocwen and Western Union charged convenience fees,… Read More

On July 25, 2017, the CFPB issued a Compliance Bulletin cautioning against misrepresenting and adding convenience fees to pay-by-phone payment options.  A copy of the bulletin is here and our take on the CFPB's bulletin is here.   For further questions on convenience fees, please contact Erik Kemp at ek@severson.com or Scott Hyman at sjh@severson.com Read More