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On January 11, the CFPB and a debt-collection law firm it sued in 2019 for illegal debt-collection practices reached settlement. The CFPB included in its initial complaint against the defendant allegations that the law firm falsely represented to consumers that attorneys were actively engaged in overseeing and filing lawsuits, while in a two year period, such law firm employed less than a dozen attorneys and filed more than 99,000 debt-collection lawsuits with minimal supporting documentation. The CFPB alleged this was a violation of the CFPA and FDCPA, which prohibits collecting debts by using false, deceptive, or misleading representations. If the proposed settlement order is entered by the court, it would require that the law firm to:…

Continue Reading CFPB Settles with “Debt Collection Mill”

On September 8, the U.S. Court of Appeals for the Eleventh Circuit issued an order in Hunstein v. Preferred Collection and Management Services, Inc. dismissing the case after determining that plaintiff failed to allege a concrete harm, and thus lacked standing to sue the debt collector for its use of a third-party mail vendor in connection with its debt collection activities (we discussed this case in a previous blog post here).
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Continue Reading Eleventh Circuit Dismisses Debt Collection Letter Case For Lack of Standing

On July 15, the California DFPI released draft text for a proposed second rulemaking under the Debt Collection Licensing Act (DCLA) relating to the scope, annual report, and bond amount increase provisions of the DCLA.
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Continue Reading DFPI Second Rulemaking Proposal on Debt Collection Licensing

On June 29, the CFPB issued an advisory opinion affirming that the Fair Debt Collection Practices Act (FDCPA) and Regulation F prohibit debt collectors from collecting pay-to-pay or “convenience fees” imposed for making a payment in a particular way, such as by phone or online, when such fees are not expressly authorized by the underlying agreement or otherwise permitted by law. In interpreting FDCPA Section 808, the Bureau’s advisory opinion explains that:
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Continue Reading CFPB Advisory Opinion: Pay-to-Pay, “Convenience” Fees Prohibited by FDCPA

On May 23, the CFPB and the New York Attorney General’s office filed a proposed stipulated judgment in federal district court against a debt collection operation, including several companies and individuals, to resolve allegations that the operation engaged in deceptive tactics to induce consumer payments. The complaint, filed in 2020, alleged that the defendants violated the CFPA, FDCPA, and various New York laws to induce consumer payments by (i) falsely claiming arrest and imprisonment for failure to pay, (ii) falsely threatening legal action, (iii) inflating debt amounts owed, (iv) harassing debt collection victims by contacting family members, coworkers, employers, and friends, (v) placing harassing phone calls to debtors, and (vi) failing to provide statutorily required notices.
Continue Reading CFPB, NY Reach $4M Settlement with Debt Collection Operation

On April 15, the CFPB and FTC announced the release of a joint annual report to Congress administering the Fair Debt Collection Practices Act (FDCPA).  The annual report highlights both agencies’ efforts to protect and provide debt collection relief to consumers, particularly in light of the COVID-19 pandemic and resulting economic hardship. …
Continue Reading CFPB Signals Foray into Protecting Small Businesses from Abusive Debt Collectors

On November 17, a majority of the active judges of the U.S. Court of Appeals for the Eleventh Circuit issued an order sua sponte to rehear Hunstein v. Preferred Collection and Management Services, Inc., en banc.  The order also vacates the October 28 opinion, meaning that the opinion is no longer binding precedent in the Eleventh Circuit.  The Eleventh Circuit will next state the specific issues on which it requests briefing and establish the timing for rehearing en banc.
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Continue Reading Eleventh Circuit orders en banc rehearing in 𝘏𝘶𝘯𝘴𝘵𝘦𝘪𝘯

On November 8, New York Governor Kathy Hochul signed into law the Consumer Credit Fairness Act (Act) (S.153/A.2382).  The Act contains a series of amendments to New York’s Civil Practice Law and Rules (CPLR) that significantly impact debt collection lawsuits filed in New York state courts by creditors and third-party debt collectors.  The key amendments to the CPLR include the following:
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Continue Reading New York Enacts Consumer Credit Fairness Act, Impacting Debt Collection Actions