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

Carney v. Unifund CCR, LLC

The gist: The District Court for Minnesota found that a law firm did not commit a FDCPA violation by proceeding with garnishment even though consumer filed a claim exemption, as no determination had been made that funds were exempt. Further representation about knowledge of exempt funds were made to the Court and not the consumer.

Long v. Fenton & McGarvey Law Firm P.S.C.

The gist: Consumer alleged that collection letter was confusing and misleading because it did not explain debt buyer’s relationship to the debt, the distinction between debt buyer and original creditor, and why the law firm was retained to collect. The District Court for the Southern District of Indiana ruled that there was a valid claim for a FDCPA violation because a violation of 1692g is a question of fact.

Kaymark v. Udren Law Offices, P.C.

The gist: Case on issues of whether a law firm violated the FDCPA when it alleged in a foreclosure complaint amounts that were not yet incurred was heard before the 3rd Circuit and remanded back to the District Court for the Western District of Pennsylvania. The law firm argued materiality under Jensen but the Court rejected that argument.

Anderson v. Portfolio Recovery Associates, LLC

The gist: Debt buyer was prevailing party winning on a summary judgment that was unopposed. The District Court for the Eastern District of Missouri refused to grant attorneys’ fees under §1927.

Miran v. Convergent Outsourcing, Inc.

The gist: The District Court for the Southern District of California ruled that a statute of limitation disclosure in a settlement letter was not confusing to a consumer and was not a FDCPA violation, and the debt collector had no duty to advise that acceptance of the settlement offer operated as a novation.

Janetos v. Fulton Friedman & Gullace, LLP

The gist: Remanded from the 7th Circuit to the District Court for the Northern District of Illinois on issue of debt buyer’s liability for law firm’s violation of FDCPA. Although law firm is now insolvent, plaintiff can use the net worth of debt buyer to determine damages.

Essique v. Walnut Woods Condominium Association

The gist: Law firm included a statement of account with validation letter. When debtor disputed the debt, law firm continued collection activity and then subsequently verified the debt. The District Court for the Eastern District of Michigan ruled against law firm on issue of whether the act of sending ledger satisfies 1692g(b) requirement of FDCPA.

Frankowski v. Nathanson

The gist: The District Court for the Eastern District of Michigan ruled that a NSF fee can be considered a debt under the FDCPA.

Liang v. Frontline Asset Strategies, LLC

The gist: The District Court for the Northern District of Illinois ruled that the failure to disclose that a judgment was dormant was not a violation of the FDCPA.

Nunez v. Pinnacle Credit Services, LLC

The gist: The District Court for the Southern District of New York ruled it is not a FDCPA violation to delegate disputes to a third party. Passive debt buyer advised consumer that she should dispute account to their servicer.

Valentine v. Midland Funding, LLC

The gist: The District Court for the Eastern District of Missouri ruled that costs added by debt collector after default judgment and not associated with underlying account stated a claim for a FDCPA violation.

Smothers v. Midland Credit Management

The gist: The District Court for Kansas found that the failure to disclose that payment could revive the debt with a time-barred debt disclosure could be confusing to the least sophisticated consumer.

Boedicker v. Midland Credit Management

The gist: The District Court for Kansas found that a letter that offered payment options, disclosed that the account was past statute of limitations, did not use the term “settle” or “settlement” but did not otherwise disclose that payment could revive the debt was not deceptive under FDCPA.