Debt Collectors Sued for Not Assessing Interest . . . Seriously?!?

The issue of debt collectors assessing interest on accounts was contentious and extensively litigated over the past decade.  Courts, regulators and consumer advocates are uniformly opposed to debt collectors assessing interest except in specific circumstances. The Second Circuit Court of Appeals decision in Avila in 2016 further placed a requirement on debt collectors to disclose in a validation notice when interest is accruing on an account, similar to the requirements in the Seventh Circuit. 

Avila was not, however, the end of the discussion on disclosing that interest is accruing on an account; rather, it was the beginning a new line of cases. Consumer attorneys are now filing and threatening dozens of cases (mostly in New York) asserting that if interest is not accruing on an account, the debt collector must disclose that interest is not accruing. Presently there are two reported decisions holding that a debt collector is not required to disclose when interest is not accruing, and more decisions are pending.  

In the latest episode of the Debt Collection Drill podcast, Attorneys John Rossman and Mike Poncin are joined by Attorney Dave Cherner to discuss this recent spate of lawsuits and strategies for avoiding liability. The attorneys also discuss the recent addition of Mr. Cherner to the Moss & Barnett team, and options for agencies to outsource their chief compliance officer needs.

Listen to the latest Debt Collection Drill here.