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Debt Collection

Debt collection refers to the work done to recover balances from credit accounts that are past due. Most commonly, debt collection specifically references third party debt collectors whose clients include banks, credit card issuers and other credit grantors, debt buyers, governments, and any organization that extends credit or owns an account where a balance is due. Collection methods traditionally include phone calls from call center agents, e-mails, and letters, and increasingly, SMS text. If an account remains in arrears after these efforts, the collection agency may contract with a collection attorney to file suit to recover the debt, if the collection agency is not positioned to do so.


The “Least Sophisticated Debtor” Is Getting More Sophisticated, And Has An Improved Memory Too

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.” However, courts have gradually been demanding more and have rejected suits based on hyper-technicalities.


GAO Report Says CFPB Small Business Panels Could Be More Effective

The United States Government Accountability Office (GAO) released a report last week that found that small business representatives (SERs) participating in the Consumer Financial Protection Bureau’s (CFPB) recent SBREFA processes thought they were too rushed. According to the report, the Regulatory Flexibility Act requires CFPB to convene Small Business Review Panels (also known as SBREFA panels) for rulemaking efforts […]


FCC Releases Rules Limiting Federal Government Debt Collection Calls

Yesterday the FCC released its Final Rules to implement an amendment passed by Congress in the Bipartisan Budget Act of 2015. Published two weeks after the CFPB published its Outline of Proposed Rules governing debt collection, we now see the possibility that rules on calls to collect government debt could be more restrictive than calls to collect other types of debt.


7th Cir. Deepens Split on FDCPA Liability for ‘Time-Barred’ Claims

This article was originally published on the Maurice Wutscher blog and is republished here with permission. Filing a proof of claim with a bankruptcy court representing a debt subject to an expired state law limitations period does not violate the federal Fair Debt Collection Practices Act (FDCPA) under an opinion released yesterday from the Seventh Circuit Court […]


FDCPA Safe Harbor Buried within CFPB Mortgage Rules

On August 4, 2016 the CFPB released a rule providing safe harbors from liability under the FDCPA for certain actions taken in compliance with mortgage servicing rules, but after the consumer has made a cease communication request. This will interest the ARM industry more broadly as it may signal a willingness to provide safe harbor where notification requirements are in conflict with the consumer’s interests.


PRAA Announces Financial Results for Q2 2016; Comments On CFPB Outline of Proposed Debt Collection Rules

On Monday, PRA Group (PRAA) reported its financial results for the second quarter of 2016. The company also hosted a conference call for investors.  PRAA is one of the largest purchasers of defaulted receivables worldwide. Second Quarter 2016 Highlights Cash collections of $387.2 million, (currency adjusted cash collections of $391.3) million versus $389.6 million in […]


Illinois Governor Bruce Rauner Nixes Bill Connected to His Former Business Life in Debt Collection

According to an article in the Chicago Sun Times today, Illinois Governor Bruce Rauner vetoed a bill last Friday that would have allowed Cook County and Chicago to use third party debt collectors to pursue delinquent tax debts. Evidently, Rauner felt that this would “penalize property owners who are already facing skyrocketing property taxes.” The […]


Ninth Circuit Court of Appeals Rules – Failure to Specifically State “This Communication is From a Debt Collector” is Not FDCPA Violation

Yesterday, the Court of Appeals for the Ninth Circuit reversed a decision from a district court in a bench trial that a collection law firm had violated the Fair Debt Collection Practices Act (FDCPA) by failure to specifically state in a voice message: “This communication is from a debt collector.” The case is Davis v. […]


Performant Financial Corporation Announces Financial Results for Q2 2016

Last Thursday, Performant Financial Corporation (PFMT) announced financial results for second quarter ending June 30, 2016. The company also hosted a conference call to discuss the results. PFMT is one of the few publicly traded companies in the ARM space. The company has also historically been one of the Department of Education’s (ED) top performing […]