insideARM Weekly Recap – Week of June 17th, 2024

The only thing constant in the ARM industry is change. That's why we at insideARM review all the news for you and bring you only the stories that are most important. Last week, after what felt like months of breaking news from the CFPB, the focus shifted to the states with important rulings in both Alabama and Indiana, and a new law in Maine that looks to greatly impact medical debt collection. Read on for a breakdown of these stories and why our team feels you need to know them.

On Tuesday, we highlighted an article about a District Court case from Alabama where a consumer sent a letter that did not include account information but disputed “all debts that [the consumer] may have” with the debt collector. Though the debt collector had two accounts for the consumer, they matched the consumer's name and social security with only one account and halted negative reporting on only that account. The court denied the party's cross-motions for summary judgment, holding that though the letter was ambiguous, there was a dispute of fact over whether the debt collector should have been able to find the second account. The ambiguity of the letter did not provide enough cover for the debt collector to dispose of the suit at the summary judgment phase. This case also highlights the importance of ensuring policies and procedures are robust enough to handle ambiguous disputes.

Wednesday’s news concerned an Indiana Court of Appeals case about whether passive debt buyers fit the definition of “debt collector.” The court, in upholding a lower court’s decision, determined that a passive debt buyer satisfied both the Indiana and FDCPA definitions of a “debt collector” and must be licensed as a debt collector in the state,  despite not collecting debts directly. Passive debt buyers and the agencies and law firms collecting for passive debt buyers should take note of this decision. 

We finished the week by bringing you a legislative update out of Maine. The state became the latest to sign into law restrictions on the collection of medical debt. Some of the highlights include prohibiting the collection of fees and interest on medical debt, making it a violation to suggest that fees or interest might be added if the debt is not paid, and a definition of “medical debt” (which excludes most credit cards). The biggest change makes it an unfair practice to pursue litigation against any consumer with a household income 300% or less of the federal poverty line. Those collecting medical debt in Maine should be aware of this update.

We truly appreciate you coming to us for another recap of the news! Looking for recaps from earlier this month? You can find the recap for the week of June 10th here.

While knowing what is going on is key, knowing how to act on this information may be even more important. Not to worry! insideARM has you covered with sample documents, legal resources, and access to other industry professionals through our weekly Peer Call. All of this can be found with insideARM’s Research Assistant. Click here to learn more and enjoy a free month to see if it fits your needs!