FDCPA Case Law Review for August 2017

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 under Compliance Resources.

The centerpiece of the page is a chart of significant FDCPA cases. 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. 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 to the story.

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Here’s a rundown of just some of the FDCPA Cases in the spotlight through July 31st.

John Daubert v. NRA Group, LLC, d/b/a National Recovery Agency

The gist: Debt collectors won judgment as a matter of law at a jury trial centered on the issue of a visible bar code. Debt collector asserted a bona fide error defense on a mistake of law, stating that some district courts had held that a bar code is not a violation of 1692f(8). Circuit Court disagreed, citing Supreme Court decision in Jerman, that bona fide error does not apply to mistakes of law. Court reversed and remanded case to enter judgment in favor of consumer on FDCPA claim.

Taylor Stever v. Michael S. Harrison

The gist: Consumer’s class action claim included the allegation that defendant law firm sent letters that revealed a bar code through the envelope. Standing was a question, but the court found that the class has stated an injury in fact, and that privacy concerns are the very injury that the FDCPA was enacted to prevent.

Salewske v. Trott & Trott

The gist: Law firm sent required notice in a foreclosure matter in full compliance with Michigan Law. Consumer alleged the notice violated FDCPA in that the notice was an attempt to collect a debt, and its publication disclosed information to 3rd parties. The court found the complaint valid. Although this was a foreclosure matter, law firm was in full compliance with the law, yet notice held to potentially violate FDCPA. Pre-emption was not argued properly and it will be interesting to see whether this case is appealed.

Salyes v. Advanced Recovery Systems

The gist: Consumer alleged that a debt collector did not report a debt as in dispute to the credit reporting agencies. Defendant argued that the dispute must be in writing, but court found that 1692e(8) does not require that a debt be disputed in writing. As long as the debt collector knows, or should have known, that a debt is being disputed, a debt collector must report the debt as such.

Andy Rawlins v. Lyons, Doughty & Veldhuis, PC

The gist: Debt collector obtained a judgment in New Jerset and believed consumer lived in New Jerset based on New Jersey driver’s license. Given that the consumer actually lived in Massachusetts, the filing of the law suit in New Jersey was a violation of 1692i(a)(2).

Jewsevskyj v. Financial Recovery Services, Inc.; LVNV Funding, LLC; Resurgent Capital Services, L.P.; Alegis Group, LLC

The gist: Consumer’s class action claim that otherwise proper disclosures under FDCPA were in a font size that was too small did not constitute a claim under the FDPCA.

Taylor-Burns v. AR Resources, Inc.

The gist: Consumer retained a credit repair agency who in turn hired a law firm to bring an action against the debt collector for failing to mark a debt as disputed. Court found that no valid contract existed between consumer and credit repair agency under the Credit Repair Organization Act (CROA) and thus no contract existed with the law firm as well. Court admonished this business model and found that RC Law Group violated various provisions of the Rules of Professional Conduct.

Wheeler v. Midland et. al.

The gist: Plaintiff alleged that website information about a debt did not inform the consumer that debt was past the statute of limitations. Court held that Plaintiff had a cause for action.

insideARM Perspective: Still, Standing

In many of the thousands of FDCPA lawsuits filed each year in federal courts across the country, the plaintiff has not suffered any actual damages resulting from the alleged violation. Courts have made these “no injury” cases easy to pursue by repeatedly ruling that consumers do not need to prove actual damages under the FDCPA in order to recover statutory damages and attorney’s fees. But are these decisions correct? It depends on your perspective. We keep seeing the issue of standing swatted around the court system, almost for sport. Still, standing matters. It is is the most basic component of any federal court case. If the plaintiff lacks standing at any time during a suit, then it is not worthy of the court’s time, and the court lacks jurisdiction to proceed.