Jury Reaches Verdict in CFPB Case Against Collection Law Firm

A Cleveland publication has reported that the jury in the case of CFPB v. Weltman, Weinberg & Reis (WWR) has reached a mixed verdict, but that the judge has decided to issue his own decision.

As insideARM recently reported, just about a year ago the CFPB filed suit against WWR, alleging that the firm deceived consumers with misleading calls and letters. A fundamental issue in the case is the fact that there is no formal definition of “meaningful review” of lawsuit documentation – 30 seconds? 5 minutes? 2 hours? The issue went to trial on April 30 and concluded last Friday.

The jury decided that the initial demand letters sent by WWR did contain “false, deceptive or misleading representations or means.” However, the jury also said the CFPB had not proved the firm’s attorneys were not meaningfully involved in the debt collection process. (emphasis added)

U.S. District Court Judge Donald Nugent said he would take the verdict under advisement and write his own decision. He gave the CFPB until June 15 to submit arguments to the court, and then two additional weeks for WWR to have the last word.

insideARM Perspective

The WWR case is the third filed by the CFPB under former Director Richard Cordray against debt collection law firms.

In June of 2014 the CFPB filed suit against the Georgia law firm of Frederick J. Hanna & Associates. That case was ultimately settled with a consent order announced in December of 2015. insideARM subsequently published an article by Joann Needleman that discussed the significance of the Hanna order and predicted continued oversight by the CFPB over the practice of law in the collection arena.

On April 26, 2016 the CFPB announced it had filed a consent order with the New Jersey debt collection law firm, Pressler & Pressler LLP. Pressler & Pressler issued its own press release about the order.

Both Pressler & Pressler and WWR have insisted they have not violated any laws, and that they have been truthful with consumers.

The WWR case proceeds against the backdrop of the advancing Practice of Law Technical Clarification Act of 2018 (formerly of 2017). H.R. 5082 amends the Fair Debt Collection Practices Act to exclude law firms and licensed attorneys who are engaged in activities related to legal proceedings from the definition of debt collector. Last month the House Financial Services Committee completed markup of the bill and approved it to move on. insideARM wrote about this Act on March 19, 2018, just before it moved out of Committee.