FDCPA Case Law Review for May 2016

insideARM maintains a free FDCPA resources page to provide the ARM community a destination for timely and topical information on the Fair Debt Collection Practices Act (“FDCPA”). This page is generously supported by TransUnion. See the page here or find it in our main navigation bar from any page on insideARM. 

The cornerstone of the page is a chart of significant FDCPA cases. Click on the link in the chart for the complete text of the decision. Where insideARM has already published a story on the case, we provide a link. Case information and analysis is provided by Joann Needleman, a Clark Hill attorney and leader of the firm’s Consumer Financial Services Regulatory & Compliance Group.

FDCPA cases in May 2016 brought both positive and negative outcomes for the ARM industry

Conteh v. Shamrock Community Association

The gist: The 4^th Circuit held that the filing of a law suit in this case is not deemed harassment under the FDCPA.

Daubert v. NRA Group, LLC

The gist: The District Court for the Middle District of Pennsylvania held that a barcode is capable of identifying a debtor and account number, that genuine issue of material fact exists, and thus FDCPA claims proceed to trial.

Garcia v. Fry

The gist: Defendant was a state process server who faxed garnishment information to an out-of-state company. The District Court of Connecticut found he was a state officer, exempt under the FDCPA, even though sending the fax was a violation of state law.

Johnson v. Midland Funding, LLC

The gist: The 11^th Circuit held the filing of an out-of-stat proof of claim is a violation of FDCPA. The court also found that FDCPA and Bankruptcy Code can co-exist and that FDCPA is not precluded by the Bankruptcy Code.

Lee v. Pep Boys

The gist: The District Court for the Northern District of California held that although theft of services and tortuous interference claims are not debts under the FDCPA, letters seeking collection could be attempts to collect debts based upon a consensual transaction and thus a question of fact.

Lindblom v. Santander Consumer USA, Inc.

The gist: The plaintiff stated a claim that a convenience fee charged by a payment processor (SpeedPay) on behalf of the bank stated a claim under 1692(f)(1). The District Court for the Eastern District of California found that if upon discovery, it is learned that the bank did not collect a portion of that fee, then the claim fails.

Magee v. Portfolio Recovery Associates

The gist: The District Court for the Northern District of Illinois held that statements of “offers to settle” on time-barred debt were misleading without a disclosure that the debt was time-barred.

Mintz v. Transworld Systems

The gist: The District Court for the Eastern District of New York found that a consumer’s failure to advise bankruptcy trustee of FDCPA claim results in a lack of standing to bring a later FDCPA claim.

Montgomery v. Trident Asset Management, LLC

The gist: Two collection letters sent 11 days apart, both with validation notices, did not violate the FDCPA. The District Court of New Jersey found no overshadowing and no confusion on the consumer’s part. Cites New York case which says and “[n]othing in the FDCPA prohibits a debt collector from giving a debtor more than the requisite 30-day validation period.”

Muller v. Midland Funding, LLC

The gist: The District Court for the Western District of Missouri found that the misstatement of less than $1.00 on subsequent collection letters could be material and could state a claim under the FDCPA.

Ramirez v. Morgan & Associates, PC

The gist: The District Court of Kansas held that a complaint stating a claim alleging that a letter to creditor which was passed to law firm was actual knowledge that the consumer was represented by counsel.

Sheriff v. Gillie

The gist: Law firm hired by the state’s attorney general was a state officer and thus had exempt status under the FDCPA. The Supreme Court found the letter was not false and deceptive when it accurately portrayed the law firm and attorney general’s relationship.

Smith v. Discover Bank

The gist: The District Court for the Eastern District of Kentucky found that credit card statements reprinted for state court collection action with the wrong address was immaterial and did not rise to a violation of FDCPA.

St. John v. Cash

The gist: The 7^th Circuit held that there is no FDCPA claim for the filing of a lawsuit that is later dismissed or does not otherwise proceed to trial.

Velez v. Enhanced Recovery Company

The gist: The District Court for the Eastern District of Pennsylvanian held that a 1099(c) disclosure in an initial letter was a statement that could mislead or deceive “the least sophisticated consumer” into believing that a certain amount had to be paid in order to avoid IRS reporting, and that there could be adverse consequences for settling a debt.

Wilson v. Receivables Performance Management, LLC

The gist: The District Court for the Northern District of Illinois found the despite a consumer’s deposition testimony that she had not yet retained an attorney, the law firm in question sent a letter on the same day to a debt collector saying that the firm was representing the consumer. Therefore, communications to consumer thereafter violated the FDCPA.