I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
Every week, AccountsRecovery.net brings you the most important news in the industry. But, with compliance-related articles, context is king. That’s why the brightest and most knowledgable compliance experts are sought to offer their perspectives and insights into the most important news of the day. Read on to hear what the experts have to say this week.
Judge Rules in Favor of Defendant in State Law Claims Over ID Theft
A District Court judge in Hawaii has granted a defendant’s motion for summary judgment on claims it violated state law when it attempted to collect on a debt the plaintiff claims was the result of having his identity stolen. More details here.
WHAT THIS MEANS, FROM NABIL FOSTER OF BARRON & NEWBURGER: Aloha, one of the culinary treats in Hawai’i is a “plate lunch” from a small restaurant, or a local food market (e.g., KTA Super Store). A good plate lunch contains a mixture of tasty components to satisfy most hungry appetites, but you may not love everything on the plate.
The recent opinion from a Federal District Court Judge in Hawai’i, entitled Durham v National Credit Adjusters LLC, case 1:23-cv-00244-MWJS-WRP (D. HI. 2025-04-21), is like a plate lunch as it contains something for everyone.
It makes a clear distinction and explains how Hawaii’s unfair or deceptive acts or practices (UDAP) state law standards of deception and falsity are not the same as those of the FDCPA.The court ruled that the “alleged actions were not materially deceptive” under the Hawai’ian state law standards and the court rejected the plaintiff’s request to essentially merge federal requirements into Hawai’ian state statutes. “[T]he Court sees no reason to conclude, that Hawaii’s UDAP statute is any less or any more protective than the FDCPA, particularly where both incorporate the materiality standard.”
It contains a good application of the often neglected (or ignored) concept of “materiality” in evaluating FDCPA claims, stating: “In this case, even the least sophisticated debtor would not have been led astray by NCA’s reporting of the debt as “disputed” to the CRAs, nor by NCA’s clear instructions about how Durham could substantiate his identity theft dispute.”
FDCPA statute is often twisted into a hyper-technical tar pit trap by plaintiff attorneys and pro-se plaintiffs alleging false, deceptive, or misleading representations. One of the universal solvents for such tar traps is the concept of materiality. Since 2009 and starting with the Seventh Circuit, Federal Courts have recognized materiality is a necessary element to evaluating any claim of a false, deceptive, or misleading representation under the FDCPA. The Second, Third, Fourth, Sixth, Eighth, Ninth, Tenth Circuits and the D.C. District Court have all issued opinions joining the Seventh Circuit’s view on materiality.
Just like with a plate lunch from a new place, you may not like everything on the plate. In this case, the court concluded there was a dispute of material fact as to whether the defendant sent the required 1692g written notice to “the best address it had” for the plaintiff. A jury will need to decide if the defendant complied with the FDCPA statutory requirement to “send” the initial written notice under 1692g. (plate lunch translation: “this mac salad tastes funny.”). But, don’t worry, there is another plate lunch spot down the road, and it may have a recipe for mac salad that is more to your liking.
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N.Y. State Appeals Court Affirms Dismissal for Lack of Standing
There isn’t a ton of background and the ruling itself is also on the brief side, but what it says is probably more important than how it says it. A New York state Appeals Court has affirmed the dismissal of a Fair Debt Collection Practices Act case on the grounds that the plaintiff did not have standing to sue. Given the trend of plaintiffs filing these types of cases in state court over federal court because federal judges are holding firm on plaintiffs needing to have suffered a concrete injury in order to have standing, seeing a state court ruling holding up on this issue is worthy of note. More details here.
WHAT THIS MEANS, FROM BRENDAN LITTLE OF LIPPES MATHIAS: The Appellate Division, Second Department, an intermediate level court of appeal in New York, affirmed the dismissal of Plaintiff’s FDCPA claim due to lack of standing. Plaintiff had alleged, in conclusory fashion, that Defendant attempted to collect on a debt that she did not owe. In affirming the dismissal, the Second Department stated: “[w]ithout any allegation that [plaintiff] relied upon the defendant’s alleged deceptive conduct to her detriment, or that it otherwise caused her harm, the plaintiff did not allege an injury-in-fact.” Notably, Plaintiff’s counsel attempted to argue in this appeal and the appeal of a sister case, Green v. Forster & Garbus, LLP, ___ A.D.3d ___ (2d Dept. 2025), that Plaintiff possessed statutory standing pursuant to the FDCPA, which is separate and distinct from common law standing. However, the Court rejected the argument in both cases because it was not preserved for appeal.
Washington Gov. Signs Medical Debt Credit Reporting Bill Into Law
Washington Gov. Bob Ferguson yesterday signed a medical debt credit reporting bill into law. Senate Bill 5480 officially prohibits the reporting of medical debt to consumer credit agencies. More details here.
Oregon Senate Approves Medical Debt Credit Reporting Bill
Oregon is the latest state attempting to fill the void being left by the Consumer Financial Protection Bureau with a medical debt credit reporting and collection bill, which this week passed the state Senate. More details here.
Vermont Passes Medical Debt Relief Bill
A bill prohibiting the reporting of medical debt and which would wipe out $100 million of unpaid healthcare bills has passed both chambers of the Vermont legislature and is heading to the desk of Gov. Phil Scott for his signature or veto. More details here.
WHAT THIS MEANS, FROM STEFANIE JACKMAN OF TROUTMAN PEPPER LOCKE: States have been proposing and passing this this of legislation with regularity over the past few years. These most recent bills are typical of what we continue to see across the country, imposing credit reporting and other restrictions relating efforts to obtain payment on delinquent healthcare debt. Considering the CFPB’s recent request in the ACA litigation requesting the district court rescind the CFPB’s recent rulemaking banning all medical debt credit reporting, states are likely to continue to propose and pass these types of laws for the foreseeable future. Therefore, it remains imperative that stakeholders remain attentive to newly introduced legislation impacting such debt to lobby for appropriate carve outs and ensuring specific and narrow definitions of what constitutes medical debt.
Minnesota Appeals Court Upholds Summary Judgment, Rules Individual Liable for Debt
A Minnesota Appeals Court has affirmed a summary judgment ruling in favor of a collection operation and has ruled that the individual is liable for the debt on which the underlying collection lawsuit was based. More details here.
WHAT THIS MEANS, FROM NICK PROLA OF BASSFORD REMELE: This case represents the continuing trend of pro se litigants creating chaos in collection litigation. Whether it’s TikTok and Facebook or consumer attorneys selling dispute and credit repair courses, the misinformation available to consumers is at an all-time high.
The collection agency in this case provided a clear (albeit expensive) roadmap for prevailing in pro se litigation. The agency served the consumer with requests for admissions regarding liability for the debt which were deemed admitted as the consumer failed to respond. Based on these admissions, the agency then moved for summary judgment and, again, the consumer submitted no response.
Courts universally hold that person acting as his own attorney is equally bound by applicable rules of procedure, even if he lacks understanding of those rules or the correct procedures. Fortunately, the Minnesota Court of Appeals refused grant leniency for the pro se failing to meet respond because he was on vacation. Many pro se litigants are not anticipating the time and effort required to litigate a case.
I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
