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CEB Prac. Guide § 2A.34E — False or Misleading Representations (Threats of Unintended or Illegal Action)

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District Court (Minn.) Says Repossession Company and Repossession Company Assignor Were Subject to FDCPA; “Breach of the Peace” Suspended Current Right to Possession under FDCPA

by Scott J. Hyman |

In Altanie Hansen, Plaintiff, v. Santander Bank, N.A.; UAR Direct, LLC, d/b/a United Auto Recovery; 11th Hour Recovery, LLC, Defendants, No. 22-CV-3048 (SRN/TNL), 2023 WL 5533536, at *2–3 (D. Minn. Aug. 28, 2023), Judge Nelson found that a repossession company and the assignor were both subject to the FDCPA/1692a(6). To be bound by the provisions of the FDCPA, Defendants must… Read More

6th Cir. Says Application for Garnishment to State Court Is a “”threat to take any action that cannot legally be taken” under 15 U.S.C. § 1692e(5), but Reverses So Debt Collector Can Explain the Factual and Legal Basis for the Application

by Scott J. Hyman |

In Thompson v. Renner, No. 21-1366, 2022 U.S. App. LEXIS 11706, at *10-12 (6th Cir. Apr. 28, 2022), the Court of Appeals for the 6th Circuit found that a garnishment application to a state court was a communication under under 15 U.S.C. § 1692e(5) But even without state-specific rules regarding affirmative representations, filing a garnishment request without reasonable belief that… Read More

5th Cir. Reverses Class Cert. in FDCPA “Threat to Sue” Case Due to Absence of Commonality on Intent

by Scott J. Hyman |

In Flecha v. Medicredit, Inc., No. 18-50551, 2020 U.S. App. LEXIS 481 (5th Cir. Jan. 8, 2020, the Court of Appeals for the Fifth Circuit reversed class certification in an FDCPA case. This class fails for similar reasons. Every member of the putative class received the same allegedly threatening letter from Medicredit. But the FDCPA penalizes empty threats, not all… Read More

District Court (N.J.) Dismisses FDCPA Class Action Based on Letter Allegedly Threatening Legal Action Because Letter Disclaimed Attorney Review and “Settlement” and “Amnesty” Words Used Did Not Threaten Legal Action

by Scott J. Hyman |

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

District Court (Mo.) Says Debt Collector’s Letters Did Not Falsely Threaten Legal Action, Unless They Exceeded Scope of Authority Granted by the Creditor

by Scott J. Hyman |

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

5th Cir. Says Settlement Offer on Time-Barred Debt Violates FDCPA Because Debtor Would Not Know that Partial Payment Triggers New SofL

by Scott J. Hyman |

In Daugherty v. Convergent Outsourcing, Incorporated, 2016 WL 4709712 (C.A.5 (Tex.), 2016), the Court of Appeals for the Fifth Circuit allowed an FDCPA claim to proceed based on a collection letter for a time-barred debt, even where no litigation is falsely threatened. There is an apparent conflict in the circuits as to whether a collection letter offering “settlement” of a… Read More

Eighth Circuit Says Pound Sand to 11th Circuit’s Crawford Decision — Holds that Filing Time-Barred Proofs of Claim in Bankruptcy Court Is Not Actionable Under the FDCPA

by Scott J. Hyman |

In Nelson v. Midland Credit Management, Inc., 2016 WL 3672073, at *2 (8th Cir. 2016), the Court of Appeals for the Eight Circuit disagreed with the 11th Circuit's Crawford decision on the actionability under the FDCPA of filing time-barred proofs of claim. Nelson urges this court to follow the Eleventh Circuit and extend to bankruptcy claims the rule against actual… Read More

7th Cir. Says Debt Collection Who Habitually Dismissed Collection Lawsuits Did Not Violate the FDCPA By Threatening to Take Action It Did Not Intend; i.e. To Take an Action to Trial

by Scott J. Hyman |

In St. John v. Cach, LLC, 2016 WL 2909195, at *2-3 (C.A.7 (Ill.),2016), the Court of Appeals for the Seventh Circuit held that a debt collector who files lawsuits hoping for settlement or default judgment does not violate the FDCPA by dismissing contested actions. The plaintiffs' principal argument on appeal is both novel and straightforward. They begin by asserting that… Read More

District Court (Mo.) Says Debt Collector’s Mere Response to Debtor’s Questions of Consequences of Not Paying the Debt Did Not Constitute a Threat

by Scott J. Hyman |

In Bedrosian v. State Collection Service, Inc., 2016 WL 743390, at *2-3 (E.D.Mo., 2016), Judge White dismissed an FDCPA Plaintiff's claim, saying that simply responding to the Plaintiff's questions about the possibilities of what could happen if the Plaintiff did not pay her debt did not constitute an illegal threat. Defendant contends that Plaintiff fails to state a claim under Section… Read More

11th Cir. Says Debt Collector’s Inclusion of “Estimated” Future Attorneys’ Fees in Demand Letter Violates FDCPA

by Scott J. Hyman |

In Prescott v. Seterus, Inc., 2015 WL 7769235, at *3-4 (C.A.11 (Fla.),2015), the Court of Appeals for the Eleventh Circuit held that a reinstatement letter that required the debtor to pay estimated future attorneys' fees as a condition of reinstatement violated the FDCPA because the demand was inconsistent with the security agreement. The security agreement does obligate Prescott to pay… Read More

District Court (Cal.) Finds FDCPA Defendant Not Entitled to Summary Judgment in Collecting on Out-of-Statute Debt

by Scott J. Hyman |

In Finley v. Dynamic Recovery Solutions LLC, 2015 WL 3750140 (N.D. Cal. 2015), Judge Henderson denied Defendant’s summary judgment motion as to Plaintiff’s claim that the Defendant violated the FDCPA for collecting on out-of-statute debt. The Ninth Circuit has not yet determined whether a threat of litigation is required for such a debt collection letter to be actionable. Two cases… Read More

District Court (Va.) Enters Judgment Against Debt Collection Agency Whose Letters Alleged Fake Lawsuit

by Scott J. Hyman |

In Sears v. Baretta Fin., No. 7:14CV00036, 2015 WL 3507694, at *3 (W.D. Va. June 3, 2015), Judge Conrad found that a debt collection agency's letter mentioning a "caption" and "case number" when no lawsuit had been filed violated the FDCPA. According to the complaint, Baretta Financial “regularly collects or attempts to collect, directly or indirectly, debts owed or due or… Read More

District Court (Cal.) Strikes Evan Hendrick’s Testimony on Debt Collection Issues; Grants Summary Judgment to Debt Buyer Arising from Activities of Its Debt Collector

by Scott J. Hyman |

In Gold v. Midland Credit Management, Inc., --- F.Supp.3d ----, 2015 WL 1037700 (N.D.Cal. 2015), Judge Freeman granted summary judgment to a credit buyer and it’s debt collection agency, and struck Plaintiff’s expert on credit reporting to the extent he attempted to opine on debt collection issues.  Judge Freeman found expert Evan Hendricks unqualified to testify about debt collection issues.… Read More