By David O. Klein – Mondaq
On May 7, 2014, the Federal Communications Commission (“FCC”) issued a notice of apparent liability ruling which held that a robocalling service provider may be held liable for violations of the Telephone Consumer Protection Act (“TCPA”) related to prior written consent, even if the robocalling service was merely providing transmission facilities that enabled its third party clients to contact consumer telephone numbers of its clients’ choosing. The FCC ruled that, consistent with recently decided cases (discussed here), the liability of the underlying sellers and the telemarketing service providers are not mutually exclusive.
Background on Robocalling
Robocalls are telephone calls that use both a computerized auto dialer and a computer-delivered prerecorded message. Robocalls tend to receive a heightened level of scrutiny under various state and federal telemarketing laws due to the fact that there is no live interaction with the caller and a higher volume of calls is made possible through use of the technology involved. By way of example, robocalls violate key provisions of the TCPA when made to mobile telephone numbers without the applicable consumer’s “prior express written consent” to receive such calls to her/his mobile device. [read more]
By Ann Carrns – The New York Times
If you’ve ever been dunned by a debt collector, you’re not alone: Roughly one in seven American adults is being pursued by a collector, for amounts averaging about $1,500.
That’s according to a report from the Center for Responsible Lending, a nonprofit research group.
Complicating the situation is that debt collection has become a larger, more complex industry. If you have trouble paying a personal debt — whether it’s a credit card balance, a student loan, a utility bill or a medical bill — and you are deemed to be in default, your account is likely to be handled eventually by someone other than the original creditor. Banks, hospitals, utilities and other businesses often sell debts at a steep discount to third-party buyers, who try to collect the payment themselves or hire outside firms to do so; often, the same debt is resold multiple times, and sometimes debts are packaged and sold in bulk.
Along the way, details of the original debt may be lost or become outdated, meaning that collectors may try to demand payment of debts that have already been settled or belong to someone else. It’s unclear exactly what proportion of consumers is wrongly pursued, said Leslie Parrish, deputy director of research with the Center for Responsible Lending and a co-author of the report. But the report notes that as little as 6 percent of debts purchased by the largest debt-buying firms in 2009 came with any sort of documentation.
“What people don’t know is that their debt can be sold to a debt buyer, who may sell it to another, and another,” said Ms. Parrish. [read more]
By Ashlee Kieler – Consumerist
For decades, payday lenders and debt collectors did their work while being largely ignored by federal financial regulators. And a new report from the Consumer Financial Protection Bureau, which recently gained oversight authority over the largest of these businesses, calls out many of the sketchy, sometimes illegal, practices some in these industries have been getting away with for far too long.
In its fourth Supervision Highlights report [PDF], the CFPB shines a light on its oversight of non-banking entities including payday lenders and debt collection agencies.
From November 2013 to February 2014, regulators were able to return more than $70 million to 775,000 consumers through supervision activities. While that is a big win for consumers.
The CFPB report found several inefficiencies related to the payday lending industry, including deceptive collection practices and the lack of oversight after contracting with third-party collectors. [read more]
Data analysis has previously shown economic downturn to provoke an increase in suicide rates, but a new study shows an even stronger correlation between suicides and foreclosure rates.
According to research published this week in the American Journal of Public Health, higher rates of suicide are uniquely linked to spikes in foreclosures.
By comparing state-by-state suicide rates with the numbers of issued foreclosures — while accounting for other disruptive factors — the researchers were able to conclude that the correlation was “independent of other economic factors associated with the recession.”
“It seems that foreclosures affect suicide rates in two ways,” explained Jason Houle, co-author of the new study and assistant professor of sociology at Dartmouth. “The loss of a home clearly impacts individuals and families, and can arouse feelings of loss, shame or regret.” [read more]
By ACA International
The legislation is in response to a U.S. Supreme Court decision allowing for district court judges to use their discretion in awarding litigation costs to the prevailing defendant in FDCPA violation cases.
Rep. Matt Cartwright (D-Pa.) is seeking to amend the Fair Debt Collection Practices Act after a February 2013 U.S. Supreme Court ruling that a debt collector who prevails in an FDPCA case can be awarded costs at the discretion of a district court even when the suit wasn’t brought in bad faith, according to a press release from his office.
The legislation introduced by Cartwright would amend the FDCPA so that costs are only available to a winning defendant when the plaintiff brings a suit in bad faith or for the purpose of harassment. [read more]
By Bradley B. Vance – Lexology
In Payne v. Progressive Financial Services, Inc., No. 13-10381 (5th Cir. 2014), the United States Court of Appeals for the Fifth Circuit reversed and remanded a Texas district court’s dismissal of the plaintiff’s suit for lack of subject-matter jurisdiction on the ground that the defendant’s unaccepted offer of judgment rendered the plaintiff’s claims moot.
Plaintiff Nicole Payne alleged violations of the Fair Debt Collection Practices Act (“FDCPA”), the Texas Debt Collection Practices Act, and the Texas Deceptive Trade Practices Act in her suit against Defendant Progressive Financial Services, Inc. As a result, Payne requested statutory damages of $1,000, actual damages, attorneys’ fees, and costs on her FDCPA claims.
After filing an answer, Progressive made an offer of judgment pursuant to Federal Rule of Civil Procedure 68. The terms of Progressive’s offer were as follows: 1) entry of judgment against itself in the amount of $1,001 for damages of any kind; 2) plus attorneys’ fees and costs incurred as of the date of the offer and to be determined by agreement or court order; and 3) expiration of the offer fourteen days after service. As a result of Payne’s failure to respond to Progressive’s offer, Progressive moved for dismissal under Rules 12(b)(6) and 12(b)(1). The district court denied Progressive’s 12(b)(6) challenge, but granted its 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction. [read more]