In this episode of The Consumer Finance Podcast, host Chris Willis sits down with Partners Joseph DeFazio and Joseph Froehlich to discuss the New Jersey Supreme Court’s ruling in Diana, a unanimous ruling and long-awaited victory for debt buyers operating in New Jersey. At the center of the conversation is a high-volume litigation campaign waged by the Kim Law Firm, which targeted the chain of title for consumer debts under the New Jersey Consumer Finance Licensing Act (NJCFLA). Kim’s core theory argued that any consumer debt under $50,000 — including personal loans, auto loans, and retail credit — that was ever touched, transferred, or assigned by an unlicensed entity is void and unenforceable as a matter of law, and that any attempt to collect on such a debt independently triggers statutory liability.
The trio walks through how that theory played out across dozens of lower court decisions, appellate losses, a Third Circuit ruling, and ultimately, the New Jersey Supreme Court’s definitive holding that no private right of action exists under the NJCFLA. Despite the favorable ruling in Diana for debt buyers, the threat of litigation has not disappeared. Kim has signaled an intent to pivot rather than retreat, leveraging the ruling’s unresolved questions to pursue claims under the Federal Fair Debt Collection Practices Act and the New Jersey Consumer Fraud Act.
Tune in to this episode to hear about post-Diana implications and critical issues that remain for debt buyers following the decision.