The issue of Ohio Attorney General Mike DeWine’s alleged favoritism in rewarding a debt collection contract boiled over on the weekend as his office released official collection totals for last year and a prominent newspaper published a blistering editorial on the matter.
A federal class action lawsuit in Seattle alleges that a collection agency used the King County prosecutor’s seals on debt collection letters to consumers, while failing to disclose that the letter was from a collection agency and not a law enforcement office. The plaintiffs say they received seemingly official letters from Missouri-based collection agency Bounceback which included threats of jail time if consumers didn’t pay the amount of the debt and more than $180 in fees. Bounceback was able to use the county prosecutor’s seal on these collection letters because it participates in a “check enforcement program,” where county prosecutors rent out the prosecutor’s seal and letterhead in exchange for a cut of the collection fees.
The Telephone Consumer Protection Act played to packed audiences through two sessions Wednesday at ACA International’s 75th Anniversary Convention & Expo in Chicago. At issues for those in the debt industry are: effective consent language and present capacity.
Gordon Beck, Chief Operating Officer of Diversified Consultants, Inc., based in Jacksonville, Florida, sat for an interview last week with ABC World News with Diane Sawyer. Beck said ABC set out to investigate TCPA lawsuits where companies – including collection agencies – dialed wrong numbers. ABC producers told Beck that he was the only collection agency official that agreed to be interviewed.
Now that the industry has had the chance to take a deeper dive into the details of the New York Department of Financial Services’ proposed regulations for debt collection by third-party debt collectors and debt buyers, experts and organizations are submitting their feedback on how to further improve the regulations. Specific questions remain about the correct language to use in consumer notices, and how the rules may impact creditors.
Larger participants in the debt industry need to prepare for CFPB supervision, and an essential part of that preparation will be to establish a formal compliance management system.
On July 14, 2014, the Consumer Financial Protection Bureau (“CFPB”), a Federal regulatory body created by the Dodd Frank Act of 2010 mounted a frontal attack on this bedrock of separation of powers principle by filing suit in the United States District Court against a prominent consumer collection law firm, Frederick J. Hanna and Associates, P.C. of Atlanta Georgia.
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 New York State Department of Financial Services (NYSDFS) today published a proposed rule in the New York State Register on debt collection by third-party debt collectors and debt buyers. The proposal is subject to a 30-day comment period which began July 16.
The CFPB announced Monday it has filed a lawsuit against a debt collection law firm and its three principal partners alleging that the firm was a “lawsuit mill” that churned out debt collection actions and violated the FDCPA en masse. The firm denies the claims and says it will defend the action in court.