As the second part in my CRCP series, I learned an extraordinary amount of knowledge from this webinar presented by Attorneys Narita, Rosenkoetter, and Woodford, three extremely knowledgeable consumer financial service attorneys, and am pleased to distill down the multitudinous updates in consumer protection litigation and legislation from around the country during this unprecedented year of 2020. All three gentlemen bring a wealth of information on regulatory and compliance issues that arise from consumer protection statutes and are nationally recognized leaders in consumer financial services litigation.
Telephone Consumer Protection Act (TCPA)
2020 has seen decisions in three major circuit courts regarding what defines a robo-call, how that data is stored, and who has access to that data. The new circuit court rulings involve making the definition of an ATDS (auto telephone dialing system) more specific, adding additional consumer protection. Key factors in all cases include that phone numbers must be produced by a random number generator, numbers must be stored by equipment, ensuring that there is no human intervention.
Echoing Reyes v. Lincoln, 2020 sees a decision on Medley v. DISH, reiterating that a consumer under a contract is allowed to be contacted regarding any outstanding debts. “Common law contract principles do not allow unilateral revocation of consent when given as consideration in a bargained-for agreement.”
As You were: Passive Debt Buyers can be Debt Collectors
Giving credence to what most of us have been doing for years, the decision in McAdory v. M.N.S. and Associates out of the Ninth Circuit Court states decided under the Fair Debt Collection Practices Act (FDCPA) that the receivables management world are indeed debt collectors.
The Manuel v. Merchants and Professional Bureau decision regarding a debt collection letter to resolve an out of statute debt was implied to be enforceable, urgent, or would bring additional possible litigation held. The language in this case from the collection agency’s letter was decided by the court to be threatening. The takeaway here is that collection letters must be worded correctly. At Tag Process, this is something we excel at: effective communication for maximum customer satisfaction and compliance.
Already in 2020, five district courts out of Illinois all ruled in various forms that any debt payment portal must include a statute of limitations disclosure as to the nature of the debt as decided in Wheeler v. Midland Funding, just as letters must. In the 7th District of Illinois, the debtor must be warned what a partial payment would mean regarding the debt on any online portal as well.
The long and the short of it is that there is legal precedent for courts to cite decisions that have held requiring debtors to be made aware that the debt is out of statute, no matter the means of communication, even though the FDCPA itself does not address this.
Interest Accrual: Changing Balances
In Salinas v. R.A. Rogers, the courts decided that the use of hypothetical language and conditional statements regarding a debt increasing due to interest held as a “truism.” Thus, any letter is in fact stating true facts that “in the event there is interest or other charges accruing on your account, the amount due may be greater than the amount shown above after the date of this notice.” Pettaway v. National Recovery Systems also echoed this ruling. Combining these industry wins and the decision in Ricci v. Sentry Credit, depending on the jurisdiction, validation notices should more easily track with statutes with communication regarding debt does not have to be written.
Prevention before Prosecution
Be careful with your envelopes! In Cagayat v. United Collection Bureau, “collection bureau” could be seen through the glassine window and contested as violating the FDCPA. Earlier this year, the decision held in the 6th Circuit of the U.S. Appeals Court against the creditor.
In Bryan v. Credit Control, the creditor must be clearly mentioned in the letter: give debtors all the possible creditors (department store and the crediting bank, for instance) to avoid any debtor arguments over confusion.
In Florida, the Supreme Court is hearing arguments in the Ham v. Portfolio Recovery Associates case. While this case will only affect Florida, having precedent could change elsewhere how attorney fees are paid out to plaintiffs in consumer debt litigation.
Nationwide Consumer Privacy Legislation Updates
After the CCPA (California Consumer Privacy Act), many other states began to bring legislation to the Congress floor to establish thresholds on, at the most basic level, what businesses can do with consumer data. Specifically, there is legislation across the country to establish state laws surrounding the civil penalties for violation, the monetary caps and definitions of a business, options for consumers to opt-out, whether private right of action will be a part of the legislation, established security criteria requirements, and Attorney General involvement. Keep up to date with the development of the bills that affect you with our interactive table.
A group of Californians is already working to pass the California Privacy Rights Act of 2020 which expands the CCPA’s definition of what is “sensitive” personal information, the right to correction, data retention requirements, expanded definitions of breach liability, and what specific third-party requirements are in maintaining consumer privacy. Anyone in California will be staying tuned to how this legislation will affect their business.
I want to thank everyone involved in creating a great learning experience. I’m eager to do more research into these bills and cases to continue to grow my knowledge base in ensuring compliance in my work. Lots of information to sort and keep track of. That’s why I do what I do: I ensure compliance so you don’t have to.
Let me know how I can help you today!