A summary of this week’s top cases. Editor’s note: This content is available for members only.
6/26/2020 12:00
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].
Eleventh Circuit finds CRA’s Actions Negligent but not Willful
The consumer reviewed his credit report and found that a small claims debt was being reported on his credit report that had been dismissed with prejudice. The consumer and his lawyer drafted a dispute letter and sent it to the CRA. When the CRA received the consumer’s letter, an employee in the mail room marked the letter as suspicious under the CRA’s suspicious mail policy. The dispute was not investigated.
Loan Servicer and CRAs did not Fail to Investigate Consumer’s Dispute
The consumer took out at least one Perkins loan and a series of seven Stafford loans under the Federal Family Education Loan Program (FFELP) to pay the costs of his college education. The consumer asserted that the loans had been forgiven or satisfied. He provided proof that he successfully canceled his Perkins loan due to his post-graduate employment as a teacher. However, the FFELP loans were consolidated by an electronic promissory note. The consumer defaulted on the consolidated loan 10 years later. He claims that that this promissory note was forged and that he never signed it electronically, thus rendering the loan consolidation invalid. The consumer also claims that the loans should be forgiven regardless and sought a declaratory judgment stating the loans in question were satisfied. The consumer alleged that the loan servicer, the guarantee agency and the three major CRA’s had violated the FDCPA and FCRA as well as two other federal statutes.
Reference to Attorney in Collection Letter Was Not False or Misleading
In this case, a group of consumer plaintiffs all received collection letter that included, in relevant part, the following statement:
“LET US HELP YOU! If the Account goes to an attorney, our flexible options may no longer be available to you. There is still an opportunity to make arrangements with us. We encourage you to call us at: [NUMBER]”
The consumers sued, alleging the above language amounted to a threat to take an action the that debt collector did not intend to take, and was false, deceptive, or misleading in violation of § 1692e(5) of the FDCPA. Additionally, the consumers contended the above statement was an unconscionable means to collect a debt in violation of § 1692f of the FDCPA. The crux of the consumer’s argument was that if the debt collector had referred the debt to an attorney, the attorney could still engage in settlement discussions, despite the letter’s assertion to the contrary. The debt collector moved for summary judgment.
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