Latest from FDCPA Defense Blog - Page 2

   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…
            How can a collector accurately identify, track, and respond to consumer disputes when the FDCPA does not define what a “dispute” is?  When Supreme Court Justice Potter Stewart famously stated, “I know it when I see it,” in Jacobellis v. Ohio, 378 U.S. 184 (1964), he was not talking about consumer disputes.  But his catch phrase succinctly described how it can be a struggle to define common words in different…
            The FDCPA prohibits a collector from placing “any language or symbol” on a debt collection envelope, other than the collector’s address.  That’s right, you read that sentence correctly – absolutely nothing can be safely placed on the envelope, except for the collector’s address.  A collector cannot even put its own name on the envelope, unless the collector is certain the name does not indicate that the company is in the…
             Section 1692g of the FDCPA says collectors must provide notice to consumers within five days of the initial communication regarding the debt, stating the amount of the debt, the name of the current creditor, and explaining the consumer’s right to dispute the debt and to obtain verification. You might assume that a collector can comply with that section by simply copying the language from the statute into their initial notice…
            Does a consumer need to be “protected” from repaying his own debts?  Can a consumer be “harmed” if he voluntarily makes a payment on a debt that he admittedly owes?  The CFPB apparently believes that sometimes the answer is “yes.”              The CFPB and the FTC have forcefully argued that debt collectors should make an affirmative disclosure to consumers when they are seeking to collect debts that cannot be judicially…
     The CFPB does not want debt collectors to tell consumers that paying their debts might help them to improve their credit score.  Nor does the CFPB want collectors to encourage consumers to pay by informing them that their failure to do so might harm their credit.  The Bureau made this point crystal clear in the Bulletin that it issued in July 2013 entitled “Representations Regarding Effect of Debt Payments on Credit Reports and
           The Dodd-Frank Act gave the Consumer Financial Protection Bureau (“CFPB”) sweeping authority to prohibit the use of “unfair, deceptive or abusive” acts or practices (“UDAAPs”) in connection with the collection of consumer debts.  These terms are broadly defined to provide the CFPB with maximum flexibility when carrying out its consumer protection mission.  But how can a collector know exactly what the CFPB will consider to be an “unfair” or “deceptive” or “abusive” collection practice?  …
Beginning in 1995, when the Supreme Court issued Heintz v. Jenkins, 514 U.S. 291 (1995), lawyers have known that if they seek to collect consumer debts for clients – even when doing so through litigation – they might qualify as a “debt collector” under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et. seq. (“FDCPA). But how often must a lawyer or a law firm engage in consumer debt collection activities before they…
            On July 11, 2013, California passed the FairDebt Buying Practices Act, California Civil Code section 1788.50 et. seq., in response to criticism that debt buyers did not have adequate documentation to support the collection lawsuits they were filing against California consumers.  The Act imposes a series of costly new requirements on debt buyers that start before any collection letter is sent to a consumer, and that continue throughout the collection process, including during…
The FTC recently released its 162-page report entitled “The Structure and Practices of the Debt Buying Industry” which describes a comprehensive study conducted by the FTC over a three-year period using data obtained from the nation’s largest debt buyers. Many will view the Report as another chance to engage in debt buyer bashing, which has become a favorite pastime for mainstream media and consumer advocates. A close read of the Report, however, reveals that…