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Few things are more fundamental in the law than the principle that a lawyer owes a duty of loyalty to the client, a duty to be vigorous advocate within the bounds of the law, and a duty to maintain the client’s confidences and preserve the attorney-client privilege. Clients expect this of their attorneys, as they should. These core legal principles have slowly been under attack, however, by an amorphous creation called the “meaningful attorney involvement”…
Attorneys who regularly engage in collection work for communityassociations have increasingly become targets for lawsuits filed by professional consumer attorneys under the Fair Debt Collection Practices Act (“FDCPA” or “the Act”), 15 U.S.C. § 1692 et. seq., and analogous state laws.These suits can be costly, distracting, and can create significant tensions between HOA attorneys and the management companies and associations they serve.  FDCPA litigation in this sector appears to be on the rise, and as…
Can a communication from a collector violate the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et. seq. (the “FDCPA”) if it never asks the debtor to pay any money? What exactly does the term “debt collection” mean in the context of the FDCPA? These seeminglysimple questions have dividedthe circuit courts,and they may soon be resolvedby the United States SupremeCourt when it decides a case that arose out of a nonjudicial foreclosure proceeding in…
Attorneys and other entitiesthat regularly engagein collection work for community associations may be subject to the requirements of the Fair Debt Collection Practices Act, 15 U.S.C.§ 1692 et. seq.,as well as analogous state laws governing the consumer collection process. Practitioners shouldbe aware of numerous FDCPA decisions issued during the past year that may significantly impact their compliance obligations and litigation risks.A few of those decisions are discussed below. Duty to discloseaccruing interest, fees or other…
         Can a bank be sued for acting as a “debt collector” under the California Rosenthal Act?  You are probably tempted to answer “yes” it can, because you know the Act defines a “debt collector” to include an entity that is collecting on behalf of itself or on behalf of third parties.  But a closer look at the activities performed by employees of the bank in question may reveal that it is…
     Grappling with the meaning of the so-called “meaningful involvement” doctrine is one of the most elusive and frustrating compliance challenges for collection attorneys and their clients.  What exactly must a collection attorney do to ensure they are “meaningfully involved” in a file before sending a collection letter to a consumer?  When, if ever, should collection law firms include disclaimers on their collection letters, indicating that no attorney of the firm has reviewed the…
(This post is adopted from the materials presented at the CAI Law Seminar in Las Vegas, Nevada on January 20, 2017) Demystifying the FDCPA Class Action For HOA Attorneys       Consumer attorneys have been filing FDCPA class actions against collection attorneys for decades, and the pace of those filings has increased sharply in the past ten years.  Attorneys who collect for national banks, debt buyers or other financial institutions have been regular targets…
When collectors get sued in an FDCPA action, they face a steep uphill battle.  Courts apply the very pro-consumer “least sophisticated debtor” standard when evaluating a collector’s communications, and most violations of the Act are “strict liability” – meaning the debtor can win the case without proving the collector intended to violate the statute.  Recently, however, the “least sophisticated debtor” seems to have gotten more sophisticated, and his memory about his account and his past…
          The CFPB has entered into consent orders with major creditors, debt buyers and law firms during the past year relating to key areas of their collection practices.  The consent orders impose significant new requirements relating to data integrity, dispute handling, debt substantiation, debt sales, affidavit practices, and litigation practices.  The orders are not formal “rules” from the CFPB, nor are they “binding” on anyone, other than those identified in the orders. …
   Collection attorneys who are nervous about the risks involved in handling consumer accounts can relax.  The CFPB has devised an ideal litigation strategy for you to follow.  Let’s take a closer look at what the Bureau wants you to do to make sure it dovetails with the CFPB’s consumer protection goals.           First, if your client plans to place accounts with your office, you should ensure the client has access to or possesses all…