Apr 4

By Patrick Lunsford – insideARM

A bill that would offer a technical fix to the Fair Debt Collection Practices Act (FDCPA) aimed at collection attorneys has picked up three additional co-sponsors this month in the U.S. House of Representatives, including two in the past week alone.

The Fair Debt Collection Practices Technical Clarification Act of 2013 (H.R. 2892) was introduced last summer by Rep. Ed Perlmutter (D-Colo.) with a bipartisan co-sponsor in Rep. Spencer Bachus (R-Ala.). After being referred to the House Financial Services Committee, the bill was slow to gain support.

But there has been a flurry of activity lately, as three new Congressmen attached their names to the proposal. Just this week, two Republican representatives from North Carolina, George Holding and Robert Pittenger, co-sponsored the legislation. Earlier in March, Rep. Tim Griffin (R-Ark.) signed on. [read more]

Apr 2

By Michael O’Rielly – ACA International

Citing an increasing number of lawsuits and petitions for clarity, Commissioner Michael O’Rielly writes that it’s time for the Federal Communications Commission to answer important questions and provide much-needed guidance on a variety of issues involving the TCPA.

For those that might not be familiar, the Telephone Consumer Protection Act (47 U.S.C. Section 227) was enacted in 1991 to address the issue of unwanted telephone marketing calls and faxes. It restricts making telemarketing calls, using automatic telephone dialing systems and artificial or prerecorded voice messages (often referred to as robocalls), and sending unsolicited faxes. From most accounts, it appears to have been a general success.

In enacting the TCPA, Congress aimed to strike a balance between protecting consumers from unwanted communications and enabling legitimate businesses to reach out to consumers that wish to be contacted. Over time, as the Federal Communications Commission and the courts have interpreted the TCPA, business models and ways of communicating with consumers have changed. As a result, the rules have become complex and unclear.

In addition to prohibiting abusive robocalls and junk faxes, which was the original intent, the rules are creating situations where consumers might not receive notifications and offers that they want and expect, and where new and innovative services and applications that help friends and family members communicate with each other could be restricted. Clear rules of the road would benefit everyone. [read more]

Mar 31

By Thomas Cox – HousingWire

[Editor's note: Thomas Cox, the "hero" lawyer from Maine whose work is often credited with leading to the $25 billion National Mortgage Settlement, asked HousingWire to publish his reaction to another blog today where Christopher Whalen called the current regulatory environment "legalized extortion." While HousingWire is not in the habit of airing personal attacks, Cox's position and passion will hopefully prompt continued, constructive conversation on the sensitive and national topic of foreclosure. Here are those comments.]

Mr. Whalen,

You and Martin Andelman simply haven’t a clue about what you are talking about.

I know that Martin does not go to court, and I doubt that you have any practical experience in the real world of foreclosures.

I train lawyers all over the country.

I speak to lawyers all over the country every day.

I go to foreclosure mediation often and I go to court often.

Your theories simply do not match reality.

There is daily and massive evidence in our dealings with the servicers outside of court, in our foreclosure mediation programs and in our court cases, that the servicers could care less about keeping homeowners in their homes. In fact, in a high percentage of cases where homeowners are demonstrably able to afford loan modifications that would benefit investors, the servicers work their hardest to deny those modifications. [read more]

Mar 27

By Gerri Detweiler – Credit.com

I haven’t talked to my former roommate Patti in years. But it only took Bill Bartmann, a veteran of the debt collection industry, minutes to pull up her name and the address of the house we shared in the early 1990s.

Less than a day after I asked Bartmann to see what he could find about me, he provided me with a long list of the addresses of places I’d lived over the years — including my college dorm address, which I would be very hard pressed to recall myself. He also dug up a list of relatives and details about them, including my husband and father’s ages and first five digits of their Social Security numbers; and former neighbors (some of whom I’d never met), along with their ages, first of their SSNs and their phone numbers.

He found all this using nothing more than my name, and the information was spot on. Even if you wanted to try to hide from debt collectors, it would be nearly impossible to do so.

“Every piece of data you can imagine, even your phone records, watch out — we got it,” says Alexis Moore, a debt collection investigator and industry consultant. Most people “have no clue how cyberspace has made it simple as a click of the mouse to find anyone anywhere at anytime,” she adds.

If debt collectors want to find you, they have many tools at their disposal. If they can’t locate you, or want to learn more about your ability to pay a debt, they can turn to “skip tracing” tools as they are called in the industry. What are some of the ways they do this? [read more]

Mar 26

By Joseph Louis Olson and Benjamin A. Kaplan – Lexology

Entities engaged in debt collection must be careful in seeking to collect on old debt – dunning letters could now be found misleading if the debtor has a statute of limitations defense. The Seventh Circuit, in McMahon v. LVNV Funding, LLC and Delgado v. Capital Management Services, L.P., 2014 U.S. App. LEXIS 4592 (7th Cir. March 11, 2014), held that collection letters, which do not disclose the debt as beyond the statute of limitations, violate the Fair Debt Collection Practices Act (FDCPA) even though they do not threaten litigation and merely seek to settle the debt. This result further confuses FDCPA application, creates a circuit split, and increases requirements upon creditors and the collection industry.

FDCPA Prohibitions

The FDCPA prohibits, among other things, the use of “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Section 1692e precludes practices such as falsely representing the legal status of any debt or threatening to take any action that cannot legally be taken. In determining whether a representation is misleading, the court views the letter from an “unsophisticated consumer’s” perspective.

McMahon and Delgado

Both cases in the consolidated appeal involved debts older than Illinois’ four-year statute of limitations. And, in both cases, the creditors sent dunning letters that disclosed neither the date the debt was incurred nor that the claims were beyond the statute of limitations. Rather, the dunning letters offered to “settle” the disputes at a substantial discount. [read more]

Mar 25

By Patrick Lunsford – insideARM

The Consumer Financial Protection Bureau (CFPB) Thursday presented its annual report to Congress on the administration of the Fair Debt Collection Practices Act (FDCPA) in 2013. While 2013 was the most active year of debt collection regulation ever, the report focuses heavily on an analysis of debt collection complaints the agency has received since July 2013.

Under the FDCPA, the executive branch agency charged with primary enforcement of the law must issue an annual report on its activities to Congress. Although the Dodd-Frank Consumer Protection Act, which created the CFPB, does not subject the Bureau to Congressional appropriations, it still must comply with the reporting requirement in the FDCPA.

The 2013 FDCPA report focuses on three key, industry-changing initiatives launched last year: the beginning of supervisory examinations among larger market participants (January), the opening of the CFPB complaints system to debt collection (July), and the beginning of the rulemaking process for debt collection (November).

But an analysis of the 30,300 debt collection complaints the Bureau received from July through the end of the year gets the most space.

The CFPB said that the top three debt collection complaints in 2013 were about:

  • Collectors hounding consumers about a debt they do not owe: More than one-third of the complaints the CFPB handled were about a debt collector continually attempting to collect a debt that the consumer does not believe is owed.
  • Aggressive communication tactics used by debt collectors: Nearly a quarter of the complaints received by the Bureau were about debt collectors using inappropriate communication tactics.
  • Taking or threatening an illegal action: About 14 percent of consumers report that a company is taking or threatening an illegal action. Most of these complaints are about threats to arrest or jail consumers if they do not pay.

The CFPB said it sent approximately 11,000 (36%) of the about debt collection complaints it received to companies for their review and response. The Bureau referred some of the remaining debt collection complaints to other regulatory agencies (35%), while other complaints were found to be incomplete (13%), or are pending review by the consumer or the CFPB (16%). Companies have already responded to approximately 9,000 complaints or 82% of the about 11,000 complaints sent to them for response. Consumers have disputed approximately 1,500 company responses (17%) to their complaints. [read more]