This week the CFPB issued a Compliance Bulletin concerning the Electronic Fund Transfer Act and Regulation E requirements for obtaining a consumer’s authorization for preauthorized electronic fund transfers. The Bulletin also outlines the CFPB’s compliance expectations.
Earlier this month the U.S. District Court for the Middle District of Florida granted Defendant’s motion for Partial Summary Judgment in Thomas Estrella v. LTD Financial Services, LP (LTD). The Plaintiff claimed that LTD placed calls to his cell phone using an ATDS without prior consent. LTD argued that it manually dialed those calls.
Western Union denied liability and contended that it had a number of affirmative defenses that would defeat Plaintiff’s claim. In spite of several strong potential defenses, Western Union still agreed to pay $8.5 million to make the case go away.
In a decision filed on October 23, 2015, U.S. District Judge Katherine Polk Failla has granted Credit Management LP (CMI)’s motion to dismiss a case against the firm filed by Joy Gardner. This case represents a positive “envelope” decision in what has been a busy couple of years for collection letter rulings.
The FTC wrapped up its three city Debt Dialogue tour in Atlanta, Georgia yesterday afternoon with very animated “dialogues” among regulators and representatives of the credit and collections industry. The wide-ranging discussion covered communication between collectors and consumers, industry self-regulation, collection complaints, and more.
Consumer Action and the Consumer Relations Consortium (CRC) have worked together to produce “When a collector calls: An insider’s guide to responding to debt collectors.” Released today, as the FTC holds the third in a series of public “Debt Collection Dialogues,” the free guide helps consumers to recognize impostors.
Yesterday, U.S. Attorney General Loretta E. Lynch announced a major settlement with Education Management Corp., the second-largest for-profit education company in the United States. Under the deal announced yesterday, EDMC has agreed to pay a $95.5 million civil settlement to resolve claims that it falsely obtained federal and state education funds, and forgive about 80,000 student loans.
A New Jersey Senate bill introduced in 2014 relating to debt collectors’ responsibilities upon receipt of notice of identity theft or misidentification crossed over to the Assembly this week. The bill adopts the FDCPA’s definition of “debt,” but strays in its definition of “debt collector” which includes, in part, “any person who by any direct or indirect action, conduct, or practice, collects or attempts to collect a debt that is owed or due or asserted to be owed or due from a consumer in this State.”
FDCPA suits “unexpectedly [caught] fire this year, up more than 1200 suits (+14.5%) over this time in 2014,” according to Gordon. FCRA suits “works out to a dramatic +39% increase over this time last year,” and “TCPA’s YTD numbers have recovered due to the combination of a strong October and a weak few months at the end of 2014. Now up almost 200 suits (+8.7%) over this time last year, TCPA seems to have avoided the likelihood of a decline.” But none of this should be a surprise, so why is it?
Regulators from the CFPB and the FTC encourage the debt industry to look at past enforcement actions and other publications to determine what issues are most important to those agencies. A review of the recent enforcement actions by the CFPB and FTC, as well as other publications, reveal three distinct trends: actions involving unfair treatment of service members; the failure of debt collectors to adequately distinguish and investigate FDCPA and FCRA disputes; and, racial bias in debt collection efforts.