John K. Rossman is a shareholder and Chair of the Creditors' Remedies Practice Group at Moss & Barnett, P.A. Mr. Rossman is a nationally acclaimed authority on the Fair Debt Collection Practices Act and the labyrinth of laws that impact the debt industry. He is a counselor and advisor to national and international companies and noted for his intelligent, creative and successful representation of collection agencies, debt buyers, creditors and fellow attorneys in cases across the country.
In the weeks since the Circuit Court decision in Douglass v. Convergent — the infamous envelope window disclosure case — filings of similar cases against debt collectors have been brisk. Two ARM defense attorneys discuss some specific legal theories upon which debt collectors may defend similar claims.
Numerous recent FDCPA lawsuits challenge the ability of debt collectors to assess interest to accounts. These cases focus on a number of factors including whether collection letters need to disclose the accrual of interest and also interest on purchased accounts.
The Consumer Financial Protection Bureau (CFPB) recently began a more aggressive approach to the debt collection industry, bypassing the larger market participant examination process and issuing Civil Investigative Demands (CIDs) to a number of debt collectors focused on specific complaints and alleged practices.
Listen to a discussion of specific tactics to avoid issues involving CFPB complaints — specifically call volume, time-barred debt, complaints about creditors, and interest issues
While class action lawsuits are typically associated with hefty litigation expenses, consumer attorneys repeatedly filing boilerplate cases may be just as disruptive. In Tennessee, consumer attorneys recently filed dozens of nearly identical FDCPA lawsuits against debt collectors, debt buyers and collection attorneys. A trifecta of wins should prevent future “frequent filer” FDCPA lawsuits in Tennessee and other jurisdictions.
Most lawsuits claiming violations of the Fair Debt Collection Practices Act (FDCPA) are resolved without a court ruling on the merits. Further, debt collectors win a surprising number of these out-of-court resolutions, obtaining dismissals of the cases without paying anything to settle.
Most consumer advocates and collectors agree that the validation language required by the Fair Debt Collection Practices Act (FDCPA) is stilted and obscure. Two recent cases in different Federal Courts of Appeal examined questions about the wording of specific validation notices and have caused concern for collectors about the language used.
Two substantial debt collector victories in FDCPA cases at the end of 2013 may set the tone for many lawsuits in 2014, especially as they relate to the “least sophisticated consumer” standard. In both cases, Courts rejected claims by the consumers and found that the collection agency had acted within the scope of the law.
Recent regulation of the debt collection industry is apparently aimed at aiding consumers. However, a recent study published by the Federal Reserve Bank of Philadelphia empirically established that stricter debt laws actually harm consumers by reducing their access to credit.
There are a number of Congressional efforts underway to amend the Fair Debt Collection Practices Act (FDCPA). But the first changes in the rules governing debt collectors are not likely to come from legislative fixes. The CFPB, with the release of its advance notice of proposed rulemaking, will probably beat lawmakers to the punch. What changes are probably coming?