If an entity acquires a debt in default and tries to collect on it, does that automatically make it a “debt collector” under the Fair Debt Collections Practices Act? Several courts, including the Third, Seventh, and Sixth Circuit Courts of Appeals, all said yes it does. In a surprise ruling earlier this week, however, the […]
This week the CFPB released its second Monthly Complaint Report. This month’s focus is credit reporting. Last month was debt collection. What’s interesting is the significant difference from a supervisory/enforcement standpoint between these two markets.
The CFPB has ordered Springstone Financial to provide $700,000 in relief to victims of deceptive credit enrollment tactics, stating that many consumers who signed up for Springstone’s deferred-interest loan product at dental offices to pay for dental work were led to believe that the product was interest free. In fact, interest accrued from the date of the consumer’s purchase and was charged if the balance was not paid in full before the promotional period ended. Turns out this is a lesson in training, monitoring, and UDAAP violations.
The FTC went into much more detail on their thought process in the second letter than in the original. Key elements from both letters are consistent, but the second letter provides additional color, analysis, and examples.
For the past 15 years lawyers have artfully drafted agreements that address such things as whether the accounts being worked are “in default” and whether the employees of an agency working the business are “de facto” employees of the creditor. Often the contract would require that those same employees be segregated from the rest of the company and/or working in isolated space. Numerous other provisions in First Party service agreements all have their genesis in deMayo. Times have changed.
On the heels of yesterday’s enforcement action against Citibank and its subsidiary Department Stores National Bank, today the CFPB took action against Discover Bank and its affiliates for illegal private student loan servicing practices. The company also engaged in illegal debt collection tactics, including calling consumers early in the morning and late at night.
As part of a larger CFPB enforcement action announced today against Citibank, N.A., Department Stores National Bank (a Citibank subsidiary) will pay $23.8 million for deceptively charging expedited payment fees to nearly 1.8 million consumer accounts during collection calls.
In June, EBay and PayPal revised their user agreements to include a statement related to their ability to communicate with customers via autodialed calls and text messages for various purposes, including collecting a debt. The change raised eyebrows. Yesterday, they tried again, in the wake of the FCC’s release of its TCPA ruling last Friday. But they still may not have gotten it right.
During yesterday’s press call regarding the JP Morgan Chase Enforcement Action, officials from the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC), and the Attorneys General from Iowa and Illinois offered personal commentary on the Action, reinforced its implications, and worked to clarify questions about the numbers. Iowa […]
On Tuesday, July 7, 2015 a federal judge in Manhattan entered an order for judgment against Time Warner Cable (TWC) for willful violations of the Telephone Consumer Protection Act (TCPA). The judgment was for $229,500. The order was entered after both parties moved for Summary Judgment.