A summary of this week’s top cases. Editor’s note: This content is available for members only.
6/12/2020 10:30
Each week, ACA International’s Compliance Analysts Laura Dadd and Andrew Pavlik compile relevant case summaries for ACA members. Here is a recap of the cases this week. Members may also submit cases for consideration to our compliance team at [email protected].
Court Grants Consumer’s Claim on Credit Report Error
The consumer checked his credit report on Oct. 8, 2019 and noticed that his credit score had dropped 54 points because of a 30-day delinquency on his loan reported by the bank. The consumer contacted the bank because he believed the information on his report was an error. The consumer exchanged emails with the bank and was informed that the bank’s records showed that one of his previous month’s payments had been rejected for insufficient funds and that this rejection was the cause of the delinquency. The consumer then alleged that the bank did not conduct a reasonable inquiry into his dispute.
The case was reviewed by a magistrate judge who made the recommendation that the consumer’s claim under 15 U.S.C. § 1681i be dismissed because the bank is not a proper party under that section, that the consumer’s claim under 15 U.S.C. § 1681s-2(a) be dismissed because that section does not allow private causes of action, and that the consumer’s claim under 15 U.S.C. § 1681s-2(b) be dismissed because the exhibits attached to Hassel’s complaint demonstrate that Centric Bank reasonably investigated his claims and correctly reported information to him. The consumer filed an objection to the magistrate judge’s recommendation and the bank filed a brief in opposition of the consumer’s objection.
Seventh Circuit Affirms District Court’s Denial of Consumer’s Request for Costs
The consumer sued the debt collector for mailing him a letter to collect a debt that he insists he does not owe. The district court entered judgment in favor of the consumer in the amount of $1,101, “plus costs to be determined by the Court.” The consumer sought “costs” in the amount of $25,293.65, but the district court did not award any. The consumer then appealed the district court’s decision not to award any costs.
The conumer argued that the district court erred when it did not award him the costs he requested. The consumer claimed that the judgment of “$1,101.00, plus costs” included anything that he could recover under § 1692k(a) of the Act. Therefore, the district court should have awarded him $24,137.50 in actual damages, $1,000 in additional damages, and $156.15 in litigation expenses. The consumer referenced the case Marek v. Chesny, which states: “[T]he term ‘costs’ in Rule 68 was intended to refer to all costs properly awardable under the relevant substantive statute or other authority. In other words, all costs properly awardable in an action are to be considered within the scope of Rule 68 ‘costs.’”
Seventh Circuit Finds Collection Letter Did Promise to Refrain from Reporting a Debt
A consumer filed a putative class action suit against a debt collector, alleging the collector sent her a misleading collection notice in violation of § 1692e of the FDCPA. The district court certified a class of consumers but later granted summary judgment in favor of the debt collector, finding that under the unsophisticated consumer standard” no objective consumer would be misled by the collection notices at issue. The consumer appealed to the U.S. Court of Appeals for the 7th Circuit.
The consumer’s claim centered on a series of there collection notices dated, respectively, March 8, April 21, and June 6, 2016. The second letter (April 21), which formed the basis of the consumer’s claim, and stated in relevant part:
“YOU HAVE OPTIONS . . . Our records indicate that your balance with Sprint remains unpaid; therefore your account has been placed with ERC for collection efforts. We are willing to reduce your outstanding balance by offering discounted options.
Court Finds Consumer Failed to Revoke Consent
A consumer listed his cell phone number on a credit application, but after developing an illness he failed to make payments. To contact the consumer regarding the debt, the servicer of the account (defendants) used the Aspect Dialing System, which evidence established is “a predictive dialer that does not have, and is not capable of using, a random or sequential number generator for dialing telephone numbers to be called.”
In response to the calls, the consumer retained an attorney, who subsequently sent a letter revoking the consumer’s consent to call his wireless number. However, the attorney sent the revocation letter to the defendants’ headquarters in Las Vegas, despite the fact that the defendants had listed a Texas address on all of their correspondence with the consumer. Notably, the defendants claimed that the Texas address was used as the address for making payments, in each delinquent payment notification, and on the “Contact Us” page of its website.
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