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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.
Appeals Court Reverses Ruling in FCRA Case
For the second time this month, the Court of Appeals for the Eleventh Circuit has overturned a lower court’s denial to compel arbitration in a Fair Credit Reporting Act case, addressing the process through which the plaintiff agreed to a website’s terms and conditions, a process known as “clickwrapping.” More details here.
WHAT THIS MEANS, FROM CAREN ENLOE OF SMITH DEBNAM: As technology advances, more contracts and agreements are executed online. In Newton v. Experian Information Solutions, Inc., a panel from the Eleventh Circuit affirmed that click through agreements, when documented properly, can support the mutual assent required for contract formation (this time, in the context of an agreement to arbitrate). Compliance teams and defense litigators should take note of this decision and the sister decision issued by the Fourth Circuit in recent days (Austin v. Experian Information Solutions, Inc., Case No. 23-2301 4th Cir. Aug. 1, 2025) as to the road map necessary to establish contractual assent. From a compliance perspective, the Newton decision serves as a reminder that click through menus and hot links need to be conspicuous across all platforms. From a defense litigation perspective, the Newton decision sets forth the level of detail necessary to prove mutual assent in click through agreements, including the use of screenshots.
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Appeals Court Affirms Dismissals of Suits Brought by Serial Plaintiff
The Court of Appeals for the Eighth Circuit has affirmed the dismissal of two collection-related lawsuits including one that was brought against a nonprofit operation that buys and forgives unpaid medical debts. The plaintiff has filed lawsuits against more than a dozen creditors and collection operations in the past two years. Both of the affirmations from the Eighth Circuit agreed with the District Court judges that the plaintiff did not have standing to sue in federal court. More details here.
WHAT THIS MEANS, FROM MARISSA COYLE OF FROST ECHOLS: A serial pro se litigant had two separate cases dismissed due to lack of standing. While she alleged FCRA allegations, she did not plead a concrete harm. She attempted to do so by including an invasion of privacy claim, but she did not include any supporting details. The 8th Circuit upheld these rulings on appeal. We have seen a lot of standing cases and these serve to hammer home the 8th Circuit’s more stringent pleading requirements for plaintiffs.
What I found more interesting is the credit reporting agency sought attorneys’ fees for having to defend against the FCRA claim. The Court noted in its ruling that pro se Plaintiff had been involved in FCRA cases before and that she needs to be mindful of the fee-shifting provisions in the statute. The inclusion of this reminder to the serial pro se filer could be incredibly useful for any entity against which she files similar claims wherein she misses the mark relative to standing.
This serves as a reminder to do a little research on any pro se consumer or attorney bringing a case to determine how often they bring similar cases, whether they have received negative rulings in the past, and whether a court has specifically outlined the flaws in their claims/pleadings. That research could be useful in making a successful claim for attorneys’ fees if the consumer or attorney continued to pursue the matter.
Illinois Appeals Court Nixes Creditor’s Arbitration Attempt
Close a door, open a window, the saying goes. But when it comes to legal options, closing a door in some cases means that door stays closed for good. An Illinois Appeals Court has affirmed a creditor’s motion to compel arbitration after it filed a lawsuit to recover a deficiency balance, saying the lawsuit was inconsistent with its own arbitration agreement. More details here.
WHAT THIS MEANS, FROM JAMES K. SCHULTZ OF SESSIONS, ISRAEL & SHARTLE: A creditor’s arbitration agreement with a consumer is a great tool a debt collector can use to avoid a class action lawsuit as it is often possible for that agency to enforce the class action bar. But several courts have recently cast doubt on that defense, finding that arbitration agreements are not enforceable for various reasons. One way that an arbitration agreement can be rendered unenforceable was discussed by the First Appellate Court in Illinois in the case of Westlake Services v. Williams. In Williams, the state Appellate Court affirmed the trial court’s decision finding that an arbitration agreement with a class action waiver was no longer enforceable after the defendant, a loan servicer, first filed a collection lawsuit to recover a deficiency balance from the consumer. Though there was no dispute that an agreement to arbitrate the consumer’s dispute about the legality of fees being charged existed, the appellate court said that the consumer was free to pursue class claims in court because the loan servicer waived the right to enforce the arbitration agreement and class bar by acting “inconsistently” with the agreement by filing the collection lawsuit. The lesson here is to be careful not to delay or take any actions that can act as a waiver of an arbitration agreement, or else you may be stuck dealing with class claims.
Judge Rejects BFE Defense in Collection Case
A District Court judge in California has granted a defendant’s motion for summary judgment over claims it violated the Fair Debt Collection Practices Act, but denied motions that it is entitled to the bona fide error defense while also ruling the plaintiff has standing to pursue claims the defendant violated state law. More details here.
WHAT THIS MEANS, FROM BRENT YARBOROUGH OF MAURICE WUTSCHER: This case includes a claim brought under California’s Consumer Credit Reporting Agencies Act, which contains a bona-fide-error defense like the one found in the FDCPA. The defendant was able to show that it implemented and maintained procedures designed to ensure the accuracy of information furnished to credit-reporting agencies, but the court held that a jury must decide whether those procedures were reasonably adapted to avoid the error that led to this lawsuit. Although the defendant’s procedures fell short of ending the case on summary judgment, they were useful in obtaining dismissal of the plaintiff’s willfulness claim and thus eliminating the potential for punitive damages.
CFPB to Rewrite Open Banking Rule, Seeks Stay in Lawsuit
The Consumer Financial Protection Bureau filed a motion yesterday asking a federal judge to pause a lawsuit challenging its open banking rule, as the agency plans to substantially revise the regulation through a new rulemaking process. The judge granted the stay request. More details here.
WHAT THIS MEANS, FROM RYAN BLUMBERG OF CLARK HILL: The CFPB’s recent motion to stay litigation and initiate a new rulemaking process under Section 1033 signals a major shift in the Bureau’s approach to open banking. Rather than defending, or fighting in court to redact the final rule, the CFPB now plans to substantially revise it. This regulatory uncertainty has created space for large institutions to assert more control over consumer-permissioned data, including by attempting to impose fees for API access. Within the ARM space, debt collection strategies may rely on access to real-time account data, and without a strong 1033 rule, banks could effectively override a consumer’s decision to share that data, especially when it comes to payment processing for the payment of debts. Looking forward, industry should encourage the CFPB to carefully consider its options when revising the 1033 rule so as to not discourage certain payments methods, thus compromising a consumer’s willingness to pay.
Judge: Avoiding Family Doesn’t Qualify as Injury for Standing in FDCPA Case
The Seventh Circuit has been Ground Zero with respect to the issue of standing in Fair Debt Collection Practices Act cases. A District Court judge in Indiana has granted a plaintiff’s motion to remand a case back to state court — the second time she has done so in this matter — ruling that avoiding your family is not enough of a concrete injury to keep the case in federal court. More details here.
WHAT THIS MEANS, FROM BRIT SUTTELL OF BARRON & NEWBURGER: This recent Seventh Circuit decision serves as a cautionary reminder for defendants weighing the risks of removal. In this case, the court granted the plaintiff’s motion to remand on the basis of lack of standing—despite the complaint including allegations that the plaintiff exhibited physical symptoms such as avoiding physical contact with family, changes in behavior, and distressed facial expressions.
The defendant argued that these were physical manifestations of injury, sufficient to establish concrete harm. However, the court disagreed, emphasizing that the complaint appeared to seek damages solely for emotional distress—not for the physical symptoms cited. This distinction ultimately led to a finding that standing was lacking.
This outcome raises interesting questions about how similar facts might be treated in other jurisdictions. Would the Ninth Circuit, for example, have reached a different conclusion given its more flexible approach to standing?
Medical Debt Credit Reporting Ban Reintroduced in Congress
A group of Democratic lawmakers in both the House of Representatives and the Senate have introduced the Medical Debt Relief Act of 2025 (S. 2519 and H.R. 4827), which would ban medical debt from appearing on consumer credit reports and prohibit creditors from using it when making lending decisions. More details here.
WHAT THIS MEANS, FROM BROOKE CONKLE OF TROUTMAN PEPPER LOCKE: The bill appears to be an attempt to codify the Medical Debt Rule, one of the final acts of the Chopra-era CFPB, which was invalidated by a federal court in Texas in July. Industry stakeholders challenged the rule, contending that it conflicted with the express language of the Fair Credit Reporting Act and, further, exceeded the CFPB’s authority. A court in the Eastern District of Texas vacated the Rule, finding that the FCRA expressly authorizes the reporting of medical debt information, and authorization that conflicts with the Rule. In response, House Democrats have responded with a proposal that would, potentially, codify many aspects of the Rule, an effort that likely will face fierce opposition from Congressional Republicans, as well as those in the industry.
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.
