A summary of this week’s top cases. Editor’s note: This content is available for members only.
8/7/2020 9:00
Each week, ACA International’s Compliance Analysts Besty Clarke, 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 Finds Consumer Did Not State an Injury In Fact
A consumer incurred a credit card debt more than 20 years ago and did not pay the balance. The debt was subsequently charged off and purchased by a debt buyer. The consumer filed bankruptcy in 2019 and the debt buyer in turn filed a proof of claim that stated the consumer owed, $1,150.04 “in principal only.” The consumer filed suit claiming that the debt buyer had an obligation under federal bankruptcy law to itemize the principal, interest, fees, and expenses, and by not itemizing the debt the debt buyer misled the consumer to think the debt contained no interest or fees.
The court ruled that the consumer did not have standing to bring her claim. The court found the consumer’s arguments did not state any potential harm to the consumer, but also found that the debt buyer’s actions could harm unsophisticated consumers generally and force them to, “use their limited resources to object to unsupported claims.” The court found that this was not enough information to state an injury in fact. The court stated that, “[b]ecause the 11th Circuit does not recognize an “anything-hurts-so-long-as-Congress-says-it-hurts theory of Article III injury,” [the consumer’s] complaint is [dismissed] for lack of standing.
Court Finds Collecting Without being Registered with the State Could Violate the FDCPA
The consumer in this case had a credit card debt that was purchased by the debt buyer. The debt buyer obtained counsel to sue the consumer to collect the debt but did not register as a collection agency with the Hawaii Department of Commerce and Consumer Affairs (DCCA). The consumer alleged that the debt buyer violated the FDCPA and Hawaii licensing laws when it sued him for the debt without being registered with the state as a collection agency.
The debt buyer moved for summary judgment on the case claiming that it did not communicate with the consumer in connection with collecting a debt because its lawyers filed the collection complaint.
The court disagreed with the debt buyer’s argument, finding that the two cases the debt buyer relied upon were inapposite to its argument. The court stated that, “these cases do not stand for the proposition that only the attorney can be held liable for FDCPA violations when filing a complaint on behalf of its client. Rather, an attorney who “regularly engage[s] in consumer-debt-collection activity” may also be liable. Merely because [the debt buyer’s attorney] could also possibly be liable (which the court is not determining here) does not absolve [the debt buyer] from liability as a matter of law.”
Given Entire Contents of a Collection Letter, Stating the Creditor’s Name in the “RE” Line at the Heading of Letter Sufficiently Identified the Creditor
A consumer sued a debt collector alleging (1) its collection letter failed to explicitly or clearly provide the name of the creditor to whom the debt is owed, in violation of 1692g(a)(2), and (2) by failing to identify the creditor, the letter was deceptive because it reasonably could be read by the least sophisticated consumer to have two or more meanings, in violation of 1692e. The collection letter included the following information in the top left corner:
RE: CHASE BANK USA, N.A.
ACCOUNT NUMBER: XXXXXXXXXXXX1909
BALANCE DUE: $747.95
REFERENCE NUMBER: [REDACTED]3377
Under the header “Debt Validation Notice,” the letter stated the “Current Balance” and included the statement “[t]he above account has been placed with our organization for collections.”
Court Finds Ringless Voicemails are Subject to the TCPA
A moving company (defendant) captured the wireless numbers of consumers who entered their information into a website, but never actually completed the process to create an account or submit their information. The defendant later used the captured information to send ringless voicemails (RVMs) to advertise the defendant’s moving services. A recipient of these ringless voicemails (plaintiff) filed a putative class action suit, alleging the RVMs violated the TCPA. The defendant moved to dismiss, arguing the plaintiff consented to the calls, thereby negating any injury-in-fact required for Article III standing. In opposition, the plaintiff claimed he did not consent.
On the issue of standing, the court observed that 9th Circuit has never held that lack of consent is a requisite element of a TCPA claim. Rather, the court opined that consent is an affirmative defense to the merits of a plaintiff’s claim, not a bar to his constitutional standing. Thus, the court determined the defendant’s argument that the plaintiff lacked standing as a result his purported consent was misplaced, and plaintiffs “‘need not allege any additional harm beyond the one Congress has identified’ when bringing a TCPA claim.”
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