FDCPA Case Law Review for June 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 June 2016 brought both positive and negative outcomes for the ARM industry

Wittman v. CB1, Inc.

The gist: The District Court of Montana found that a fee charged by a collection agency for a payment with a credit was a violation of 1692(f) and incidental to the principal obligation.

Balon v. Enhanced Recovery Company, Inc.

The gist: 1099-c language in a settlement letter was found by the District Court for the Eastern District of Pennsylvania to state a claim under the FDCPA because it can be read to have two meanings.

Nyberg v. Portfolio Recovery Associates, LLC

The gist: Motion to dismiss affirmative defense of debt buyer granted in part by the District Court of Oregon, especially the bona fide error defense because it only recited the statute and alleged no facts.

Murray v. Revenue Management Corporation

The gist: In adversary proceeding, the Bankruptcy Court for the Eastern District of Massachusetts held that the debtor violated 1692e(2)(A) when they used “versus language” in a letter when no suit had been filed, but did not violate 1692e(13).

Rivero v. ACB Receivables Management, Inc.

The gist: The District Court for the Eastern District of New York held that the FDCPA does not specifically mandate how a debtor can notify a debt collector of a dispute.

Adams v. Pennsylvania Higher Education Assistance Agency

The gist: State collection laws pre-empted by Federal Family Education Loan Program (FFELP). The Supreme Court of Appeals of West Virginia issued summary judgment in favor of the agency.

Datta v. Asset Recovery Solutions, LLC

The gist: The District Court for the Northern District of California adopts benign language exception to find that bar code and reference number (not account number) seen through window envelope is not an FDCPA violation.

Ciganek v. Portfolio Recovery Associates, LLC

The gist: The plaintiff alleged that a Declaration attached to a collection complaint was false and deceptive when it stated that collection attorney was available for service of process at one of the law firm addresses, which was 150 miles away from the courthouse and thus not an admissible declaration. The District Court for the Northern District of California held the mistaken address was not material and not a violation of California law or the FDCPA.

Campbell v. American Recovery Services, Inc.

The gist: The District Court for the Central District of California found that debt collector use of corporation after “American Express” was immaterial and not a violation of FDCPA.

Genova v. Total Card, Inc.

The gist: The District Court of New Jersey held a debt collector is under no duty to advise a consumer that payment will restart the statute of limitations.

Lyons v. Michael & Associates

The gist: The 9^th Circuit ruled that the statute of limitation for FDCPA action based upon the filing of a collection lawsuit starts when the consumer is served and learns of the lawsuit.

Arias v. Gutman, Mintz, Baker & Sonnenfeldt, P.C.

The gist: Plaintiff alleges collection law firm violated 1692e & 1692f for failing to release exempt funds and for objecting to the consumer’s exemption. The District Court for the Southern District of New York found that the law firm followed state procedure and did not violate the FDCPA because evidence that funds were exempt were not verified and that there was a right to object based on state law.

Oliva v. Blatt, Hasenmiller, Leibsker & Moore, LLC

The gist: The 7^th Circuit affirmed bona fide error defense of law firm that relied on established precedent regarding venue.

Duhart v. LRAA Collections

The gist: The 8^th Circuit held a creditor is not a debt collector if it uses the name of another division of the company to collect the debt.

Lugo v. Firstsource Advantage, LLC

The gist: The District Court of New Jersey ruled a debt collection settlement letter sent on out of stat debt did not violate the FDCPA because it did not threaten suit and was not otherwise required to tell consumer that payment would re-set the statute of limitations.

Taylor v. First Resolution Investment Corporation

The gist: The Ohio Supreme Court ruled that prayer for an interest rate in a pleading without means to prove is actionable under the FDCPA. Also, using an Ohio borrowing statute, cause of action on defaulted credit card account occurs in jurisdiction where the debt was to be paid, so that jurisdiction’s statute of limitations applies. In this case, the lawsuit that was filed passed the statute of limitations.

LaPointe v. Midland Funding, LLC

The gist: The District Court of the Eastern District of Tennessee drastically reduced attorney’s fees due to plantiff’s attorneys due to them being excessive and unreasonable, as well as reduced their market rate.

Williams v. Experian Information Solutions, Inc.

The gist: The District Court of New Jersey found that the plaintiff’s attorney brought a frivolous claim and failed to do due diligence before filing lawsuits.

Gomez v. Niemann & Heyer, L.L.P.

The gist: The District Court for the Western District of Texas held that failure to itemize the amount due in an initial demand letter can state a claim under the FDCPA.

Leet v. Hospital Service District No. 1 of East Baton Rouge Parish

The gist: The District Court for the Middle District of Louisiana held an entity servicing a lien that was not in default was not from a debt collector.

Frost v. Resurgent Capital Services, L.P.

The gist: The right for debt buyers to charge interest both by contract and state law is affirmed by the District Court for the Northern District of California. The court also rejected the argument that the right to charge interest was waived at charge-off.

Cruz v. Financial Recoveries

The gist: The District Court of New Jersey ruled that a letter suggesting that a consumer contact debt collector about potential insurance did not overshadow 1692g disclosures because it made no mention about disputing the debt.

Moore v. Ocwen Loan Servicing, LLC

The gist: The District Court for the Eastern District of Michigan reaffirms that a debt collector has no obligation to verify a debt if a consumer sends a request for validation past the 30-day time period.

Romeo v. FMA Alliance, Ltd.

The gist: The District Court for the Eastern District of New York ruled that a consumer lacked standing when they failed to disclose FDCPA claim in bankruptcy schedules.