State legislatures frequently tweak debt collection laws, sometimes annually. These changes in the law often require changes to debt collection letters and processes by the debt industry. This year was marked by a number of legislatures making wholesale changes to the debt collection laws of their respective States. Three States in particular; New York, Illinois and Maine; changed their laws to such a degree that ambiguities exist in how to comply and questions have arisen as to whether complying with the new State laws will violate the FDCPA.

In the latest episode of the Debt Collection Drill, attorneys John Rossman and Mike Poncin break down the law changes in these three States and provide practical guidance for compliance and avoiding pitfalls.

The recent order issued by the Federal Communications Commission (FCC) regarding the Telephone Consumer Protection Act (TCPA) encompasses 138 pages (including hundreds of footnotes) and created an instant tidal wave of questions, comments and uncertainty about the use of telephone technology to contact consumers on mobile phones.

Attorneys John Rossman and Mike Poncin break down the FCC Order and the important highlights of it for the debt industry in 13 minutes in the latest episode of The Debt Collection Drill.

There is a cost associated with a business accepting payments via credit card.  Depending on the type of credit card, bank and payment processor used by the business, that cost can vary for each transaction.  However, most consumers expect and demand that businesses will accept credit cards as a payment method.

For the collection industry, whose members often accept a volume of payments, the fees associated with accepting credit card payments from consumers can be a substantial sum of money every month. 

Recent litigation and changes to the law regarding the ability of collection agencies to assess credit card convenience fees raises numerous questions.  In the latest episode of the Debt Collection Drill, attorneys John Rossman and Mike Poncin tackle the issue of credit card convenience fees and the rapidly evolving law that governs such fees.  

The West Virginia Consumer Credit Protection Act, and how it was interpreted by the consumer attorneys in West Virginia, was the primary reason that State had previously been described as one of the most treacherous places in the country for debt collectors. Lawsuits were routinely commenced West Virginia State Courts seeking hundreds of thousands of dollars in statutory damages when the consumer suffered no injury.

In this most recent episode of the Debt Collection Drill audio blog, attorneys John Rossman and Mike Poncin examine in detail the recent common sense changes to the law in West Virginia and how these changes will impact the debt industry.

Collection agencies, debt buyers and credit granters are often under siege, forced to defend against identical claims on multiple jurisdictional fronts, regardless of whether the claims are on behalf of an individual or a putative class. One strategy for consolidating the defense of identical claims is to file a motion with the U.S. Judicial Panel on MDL to transfer claims to a single venue.

The MDL Panel was created under 28 USC 1407 and its job is to consider whether litigation pending in multiple federal courts involves common questions of fact that make it appropriate to consolidate and coordinate proceedings. The primary purpose of MDL is to centralize litigation to avoid duplicative and costly discovery, conserve resources and prevent inconsistent court rulings.

In the latest episode of the Debt Collection Drill Moss & Barnett attorneys Mike Poncin and Issa Moe discuss the potential application of MDL to consumer litigation, the procedure for seeking MDL, and the risks/benefits associated with MDL.

The concept that a debt collection communication must be viewed through the lens of the least sophisticated consumer is a fairly established tenet of FDCPA law. While the application of this standard is often the subject of litigation, its premise is that a debt collection communication violates the FDCPA if it would deceive or confuse the least sophisticated consumer.  The obvious exception to the least sophisticated consumer standard is collection communications with a consumer attorney.  This exception is recognized by a number of Courts including the 7 Circuit Court of Appeals decision in Evory which hold that assessing whether collection communications with an attorney for a consumer are deceptive will generally be judged using the competent attorney standard.

The 11th Circuit Court of Appeals recently broke new ground on the assessment of collection communications with attorneys in the Crawford decision, holding that statements in a proof of claim filed in a Chapter 13 Bankruptcy are subject to the least-sophisticated consumer standard.  While the ruling in the Crawford case is most notable and challenging due to its interpretation of the intersection between Bankruptcy law and the FDCPA, the implications regarding all collection communications with consumer attorneys is also substantial.

Debt Collection Drill audio blog, attorney John Rossman hosts a discussion with Moss & Barnett attorney Sarah Doerr about the impact of Crawford decision not only on bankruptcy proofs of claim, but also all collection communications with consumer attorneys.

Collection agencies and debt buyers continue to be inundated with FDCPA and TCPA lawsuits, many of which drag on through months and even years of expensive discovery and motion practice. What if there existed a single argument that could be made in many consumer cases that would successfully remove the matter from Court and likely end the case in its entirety? Surprisingly, such an argument exists, though it is often overlooked in the defense of debt collectors and debt buyers.

A broad array of consumer contracts include arbitration clauses requiring that certain consumer disputes be resolved through arbitration rather than Court proceedings. Recent United States Supreme Court precedent supports enforcement of such arbitration clauses. Depending on the exact wording of the arbitration clause, motions to compel arbitration of FDCPA, TCPA and other consumer litigation may succeed where other arguments fail. Further, in a putative class action such as a TCPA class action if some of the purported class members are subject to an arbitration clause, this alone may be sufficient to defeat class certification.

In the latest episode of the Debt Collection Drill, attorney John Rossman discusses a recent victory for a collection agency in a motion to compel arbitration, along with strategies for successfully crafting this argument, with special guest attorney Jim Bedell from Moss & Barnett.

The New York State Department of Financial Services announced recently revised debt collection regulations, culminating more than a year of proposals and comments. While the new regulations provide clarity and consumer protection in some areas, they are fraught with ambiguities and overlap existing laws in several key aspects. Attorney John Rossman and Mike Poncin examine some of the more salient difficulties with the revised New York debt regulations in the current episode of the Debt Collection Drill.

The Third Circuit Court of Appeals ruled recently in Douglass v. Convergent that a collector’s envelope, which disclosed a collection agency account number through the window in the envelope, raised privacy concerns and violated the FDCPA. The Court in Douglass held that the collection agency account number-visible through the window on the envelope presumably for return mail sorting purposes was a piece of information capable of identifying Douglass as a debtor. In analyzing the claim in Douglass, the Court examined the FDCPA, and specifically Section 1692f(8) which prohibits:

Using any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.

Since the Douglass ruling, filings of similar cases against debt collectors have been brisk, especially in Pennsylvania and New York. In the latest episode of the Debt Collection Drill, attorneys John Rossman and Mike Poncin discuss the Douglass decision and some specific legal theories upon which debt collectors may defend similar claims.

The enactment of the FDCPA in 1977 began long-standing debate regarding what information a debt collector must produce to a consumer in response to a request for validation.  The FDCPA itself is vague, stating that after receiving a request for validation, “the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt . . .”  Nowhere in the FDCPA is the term “verification” defined.  The legislative history of the FDCPA, however, provides some guidance where it states: 

This provision will eliminate the recurring problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid.

A recent Sixth Circuit Court of Appeals Case, Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC, examined the issue of what constitutes adequate verification in the context of multiple requests for validation by the consumer focused on a specific portion of a debt.  While it has been argued that the Haddad case requires a debt collector to provide itemized statements whenever any request for validation is received, this interpretation is not borne out by a careful reading of the case and other applicable precedent. 

Attorney John Rossman and Mike Poncin examine the practical implications of Haddad and provide specific information necessary for debt collectors to respond to requests for validation in the latest episode of The Debt Collection Drill podcast.