The issue of whether knowingly filing a Proof of Claim on Out-of-Statute debt is a violation of the Fair Debt Collection Practices Act (FDCPA) has created inconsistent answers for the ARM industry. Recently, the Supreme Court of the United States (SCOTUS) has been asked to provide a definitive answer. In two separate cases (Owens v. LVNV Funding, LLC, Nos. 15-2044,15-2082,15-2109, 2016 WL 4207965 (7th Cir. Aug. 10, 2016) and Johnson v. Midland Funding, LLC, 823 F.3d 1334 (11th Cir. May 24, 2016) attorneys on both sides of the issue have filed petitions for a writ of certiorari seeking SCOTUS review.

The Owens petition was filed on August 26, 2016 and placed on the docket September 12, 2016 as Case No. 16-315 The Johnson petition was filed on September 16, 2016 and placed on the docket September 16, 2016 as Case No. 16-348.

insideARM has written or published articles about both cases in the past.

In Johnson, the Eleventh Circuit Court of Appeals Determined that filing a Bankruptcy Court Proof of Claim on a Time-Barred account was an FDCPA Violation.

In Owens, the Seventh Circuit joined with the Eighth Circuit Court of Appeals in rejecting the notion that filing such Proofs of Claims violated the FDCPA.

insideARM Perspective

This is an issue that cries out for SCOTUS review.  The Courts of Appeals have provided inconsistent answers. insideARM will be monitoring the SCOTUS docket and reporting if and when the court decides whether to review.

In the meantime, it is possible that the Consumer Financial Protection Bureau (CFPB) could make the issue moot by promulgating a rule on the issue.

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