Will Supreme Court Provide Definitive Answer on Whether Filing Proof of Claim on Out-of-Statute Debt is an FDCPA Violation?

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.