A summary of this week’s top cases. Editor’s note: This content is available for members only.
5/15/2020 13:00
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]
Court Finds that the Debt Collector Failed to Report a Debt as Disputed
The consumer noticed a debt on her credit report that she did not recognize. The consumer called the debt collection company listed on the report and told the collector on the phone that she did not know the debt collector listed on her report and that she did not owe them a debt. The debt collector asked the consumer for her information; after the consumer gave the debt collector her information the debt collector told consumer that the debt was owed to DirectTV with a balance of $417.42. The consumer said, “I don't know anything about that debt, but I'll go check my records and see[,]” and ended the call. The debt collector continued to report the debt as undisputed.
The consumer sued the debt collector, claiming that the debt collector did not report her debt as disputed and that the debt collector knew or should have known that she disputed the debt. The debt collector raised four separate arguments concerning the consumer’s dispute as well as a bona fide error defense. Continue reading.
Letter to Consumer was not Misleading
The court declined to accept the consumer’s argument that, “that the least sophisticated consumer may be confused that the “fees and costs” listed on the Letter may be different at some future, unspecified payment date.” Instead, the court found that the letter did not misrepresent the amount owed because it listed the total amount due at the time the letter was sent. The court also rejected the consumer’s second argument finding that, “Either a consumer would promptly respond to the” Letter–that [the consumer] does not allege to have done–or engage an attorney who can then clarify whether the alleged fees may decrease.” Continue reading.
Seventh Circuit Holds the FCRA Does Not Require CRAs to Resolve Legal Defenses to a Debt
Consumers brought a putative class action against a CRA, alleging the CRA violated 15 U.S.C. § 1681e(b), which requires CRAs “to assure maximum possible accuracy of the information” contained in credit reports, and 15 U.S.C § 1681i(a), which requires CRAs to reinvestigate disputed items. The consumer claimed the CRA transmitted “inaccurate” credit reports, however, the consumers did not claim CRAs reports were factually inaccurate, as they took out the loans reported by the CRA, nor did they contest the debt amounts or the CRAs account of their payment history. Instead, the consumers claimed the reports contained “legally inaccurate” information because they contained “legally invalid debts.” Continue reading.
District Court Finds No Requirement to Advise a Consumer of Potential Tax Consequences of Settlement
A consumer alleged that a debt collector violated the FDCPA and the Texas Debt Collection Act by: (1) making harassing phones calls; and (2) by sending a letter offering to settle her debt. In response, the debt collector moved to dismiss only the claims related to the “dunning” letter for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). Regarding the settlement letter, the consumer asserted that the representations in the letter that she would save specific amounts of money if she “resolved” her account violated the FDCPA and the Texas Debt Collection Practices Act. The consumer argued the representations in the letter were false, deceptive, and misleading because the debt collector knew at the time it sent the letter that there might be tax consequences to the consumer if she settled her debt. Continue reading.
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