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.
New York City’s Department of Consumer Affairs in 2009 passed onerous requirements for ARM companies operating in the city. The new regulations have been widely discussed in the debt collection community ever since. But now that the rules are in full swing, the Department is taking action against collection agencies and debt buyers.
Sometimes it seems like everything a debt collector does can be parsed as a potential violation of some consumer statute, at least enough so to bring a civil action. Even when it appears the tide of precedent-setting court cases is turning in favor of the ARM industry, there are decisions that bring collection professionals back to reality.
The proliferation of Telephone Consumer Protection Act (TCPA) litigation against the debt industry continues unabated. Damage awards and settlements in TCPA cases costing debt collectors hundreds of thousands — and even millions — of dollars are a common occurrence. The latest development regarding the TCPA is sobering: a Federal Court found a debt collector liable for TCPA violations where some of the calls to a consumer’s mobile phone were made in dialer “preview” mode and an individual collector “clicked” on the number to dial it.
It’s a common template in most media coverage of the debt collection industry: focus on one consumer’s horror story involving someone trying to collect a debt, perhaps complete with a recording. Then have a law enforcement official discuss the case and debt collectors in general. Lastly, through in consumer complaint numbers about the entire ARM industry. Presto! Every collection agency in the world obviously behaves this way.
But as most in the industry know, the people on the other end of the offending call often are not real debt collectors.
Has your company ever matched up against an attorney who files boilerplate complaints, does not participate in the litigation process and then refuses to lay down the sword despite being informed that his or her arguments are likely baseless? If your company has been involved in such a case, you know the frustration with feeling that the normal rules of litigation do not seem to apply.
In one recent case, two debt collectors chose to take a principled stand and fight against apparent vexatious tactics. The Court agreed with the debt collectors in that recent case and awarded them more than $13,000 in total sanctions against a consumer attorney.
Attorneys John Rossman and Mike Poncin examine the real difficulties with obtaining sanctions against consumer attorneys in Fair Debt Collection Practices Act (FDCPA) cases and discuss specific scenarios where sanctions motions may be warranted.
First of all, sanctions in FDCPA cases are extremely rare and must meet a very high standard. But the opportunity does exist and ARM companies need to know what to look for.
A recently filed putative class action demonstrates the risk all companies face when accepting electronic checks by phone. While most companies agree to accept electronic checks by phone only as a convenience to customers, these transactions are governed by a confluence of financial regulations replete with thorny traps for the unwary. In particular, recurring electronic withdrawals from a consumer’s checking account must be authorized in a writing signed or similarly authenticated by the consumer.
While the definition of “similarly authenticated” is subject to some interpretation, an audio recording of the consumer’s verbal consent is arguably not sufficient.
What is express consent under the TCPA anyway? How does an auto-dialed call differ from a manually dialed one? What can a collection agency do to limit its exposure to TCPA claims?
In the latest episode of ARM industry legal podcast The Debt Collection Drill, Moss & Barnett attorneys John Rossman and Mike Poncin discuss strategies for avoiding TCPA lawsuits including issues involving consent, the definition of an automated dialing machine, and wrong number calls.
Here’s something we all know: 2013 will be unlike any other year in the history of debt collection in the United States. It is known. The most obvious reason is that the largest ARM companies in the country will be subject to federal examination for the first time ever. And that should probably be enough.
But there’s more.
Federal oversight of the debt collection industry by the CFPB spawned several myths that persist as the anticipated commencement of CFPB examinations of larger participants draws nearer. Here are three common myths.
Spoiler: smaller collection agencies will be supervised too.