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 Grants MTD on Two of Three Claims in FDCPA, TCPA Case Against Collector
A District Court judge in New Jersey has granted a defendant’s motion to dismiss on one of two claims made by a plaintiff that the defendant violated the Telephone Consumer Protection Act case while also granting the motion to dismiss a claim that it violated the Fair Debt Collection Practices Act. More details here.
WHAT THIS MEANS, FROM MITCH WILLIAMSON OF BARRON & NEWBURGER: To my mind this case illustrates the tensions between making an early Motion to Dismiss (“MTD”) as opposed to waiting to both make a record and solidifying the allegations in the complaint and then moving for summary judgement.
As noted in the summary by MG, this was the second MTD, brought by defense counsel. In the first iteration the Complaint contained two counts alleging violations of the Telephone Consumer Protection Act of 1991 (the “TCPA”). The first count contained two theories. It alleged Frato received marketing calls to his cell number from the defendant via an ATDS and also claimed that calls were made to “a residential line with an artificial or pre-recorded voice.” The second count alleged marketing calls to the Plaintiff, who’s number was on the Do-Not-Call registry.
The Court granted Capital Management Services’ (“CMS”) Motion pointing out that Frato failed to provide specific allegations to support his allegations that an ATDS was used. As to the second count the Court found that the alleged calls were not made “the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services.” They were an attempt to collect a debt. However, the complaint was “dismissed without prejudice to allow Plaintiff an opportunity to file an amended complaint.” Which was subsequently done.
Frato revised his first count providing details as to the calls, missing in the initial complaint, sufficient to now allow the Court to make a reasonable inference that an ATDS was in fact used. Which was all that was needed to defeat the MTD as to that part of the Amended Complaint. The second count, which remained the same and a new third count alleging an FDCPA violation were both dismissed. So the litigation continues.
What this case illustrates is the need to consider, before filing an initial motion to dismiss,whether the allegations are amenable to revision or not. Particularly with a pro se plaintiff as was the case here. Most Courts are going to allow a defective complaint to be amended after providing a road map to make it better. While clients want a case to go away as quick as possible, sometimes the shortest road isn’t the quickest.
THE COMPLIANCE DIGEST IS SPONSORED BY:
California Judge Recommends Allowing FDCPA and TCPA Claims to Proceed
A Magistrate judge in California has recommended denying a defendant’s motion to dismiss claims it violated the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act, ruling the plaintiff revoked consent to be contacted and adequately alleged that the company continued to make calls despite that revocation. More details here.
WHAT THIS MEANS, FROM JIM SANDY OF MCGLINCHEY STAFFORD: Baldi is yet another case showing that under the TCPA, “no means no.” That is, businesses who do not timely honor a consumer’s revocation of consent run the risk of finding themselves in court and, at least at the pleading stage, courts will liberally construe allegations that the consumer revoked consent, making it difficult to prevail on motions to dismiss TCPA claims at the pleading stage.
Illinois Appeals Court Upholds Judgment After Arbitration Dispute
An Illinois Appeals Court has affirmed a lower court’s ruling awarding a judgment to a debt buyer, rejecting all of the consumer’s arguments why the ruling should be overturned. More details here.
WHAT THIS MEANS, FROM LAUREN BURNETTE OF MESSER STRICKLER BURNETTE: They say that patience is a virtue, and in this matter, Midland’s patience certainly paid off. This consumer threw block after block in an effort to avoid paying her debt: she sought to compel arbitration, then asked for court intervention when arbitration resulted in an adverse finding against her. She attacked Midland’s standing, the quality of its documentation, and the propriety of its efforts to collect the judgment entered against her—and even succeeded in staving off such collection, albeit temporarily. She took inherently inconsistent positions, such as challenging the lower court’s jurisdiction to enter judgment against her even though she was the party who asked the lower court to step in. Midland, for its part, parried every block, methodically responding to the consumer’s shifting positions with irrefutable evidence of its ownership of the account and its entitlement to repayment.
In an atmosphere in which consumers are (mis)led to believe that throwing roadblocks in front of legal collection efforts is an effective way to avoid judgment, this outcome is a great reminder that patience can pay off.
FCC Eyes New Rules to Verify Caller Identity and Flag Overseas Calls
The Federal Communications Commission will take up a proposal later this month aimed at giving consumers, and by extension, legitimate callers, more transparency about who’s calling them and where calls originate. The proposal, titled Improving Verification and Presentation of Caller Identification Information, will be considered at the agency’s October 28 meeting as part of its continuing efforts to combat illegal robocalls. More details here.
WHAT THIS MEANS, FROM DAVID KAMINSKI OF CARLSON & MESSER: Yes, the good news is that the FCC seeks to tighten up call caller ID rules to help all business throughout the US. That is an excellent proposal and one that should help businesses.
However, the BIGGER issue and one that all American businesses anticipate is the new FCC’s Notice of Proposed Rulemaking which provides changes the FCC seeks to make on the following critical issues:
- The notice proposes to eliminate the “revoke all” rule which currently provides that providers would have to stop all communications across all channels if a consumer makes an opt-out request. A change would be a blessing – the current rule is unworkable, and harms businesses and consumers. The FCC recognizes the insanity of this rule created under prior FCC leadership, which would pose nightmares for all businesses. Stay tuned!!!
- The notice also seeks comments on allowing businesses to designate reasonable methods of revocation that consumers would have to follow. Right now, the revocation of consent can be made by a consumer using one of the 7 words that the FCC established, and any reasonable words a consumer may use to indicate they don’t want to be called. What????? This rule has already caused revocation nightmares by bad actor consumers who write as follows: “Roses are red, violets are blue, you should probably not call me as I don’t like you”. Having the FCC work with businesses to allow businesses to designate reasonable methods of revocation should be what controls – not consumers playing games with the lexicon of the English language.
- The third major proposal in the notice would establish a framework to enable companies to identify themselves on a called party’s smartphone, a framework that ACA has also supported. This would prevent the ridiculous Caller ID claims consumer make under the TCPA. Many businesses do not have ultimate control over what is displayed on Caller DID when they dial outbound calls, as third party intermediary carries do and manipulate a company’s DID. Hopefully, this all will change.
Stay tuned – Very exciting new. The New leadership of the FCC understands how these bizarre FCC rules harm businesses and they seek to stop the insanity – NOW!!!
Bank Regulators Move to Eliminate ‘Reputation Risk’ and Redefine ‘Unsafe or Unsound Practices’
The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) jointly issued two major notices of proposed rulemaking yesterday that aim to bring more objectivity and transparency to bank supervision while also reducing what they describe as “subjectivity and bias” in how regulators assess risk. More details here.
WHAT THIS MEANS, FROM STEFANIE JACKMAN OF TROUTMAN PEPPER LOCKE: The administration’s proposal stands to bring some level of certainty to bank examination standards across regulatory bodies. This would help to align standards, provide more predictability, and allow for better compliance with known and clearly defined standards.
Call Recordings Clear Collector in FDCPA Case Alleging Threats of Arrest
Let’s go to the videotape. A District Court judge in Missouri has granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act case, after the plaintiff claimed the defendant threatened arrest and imprisonment, which was rebutted by the call recordings submitted by the defendant. More details here.
WHAT THIS MEANS, FROM MICHAEL CHAPMAN OF BASSFORD REMELE: In Moon v. Portfolio Recovery Associates, LLC, No. 4:23-CV-01195-CMS (E.D. Mo. Oct. 2, 2025), the Eastern District of Missouri granted summary judgment for Portfolio Recovery Associates, rejecting the pro se plaintiff’s FDCPA and emotional-distress claims. The district court found Moon failed to show the debts were “consumer” obligations under 15 U.S.C. § 1692a(3) and presented no evidence of harassment or threats where PRA’s 23 calls occurred within lawful hours and without litigation threats. The ruling underscores that collectors must face concrete, evidentiary proof of both consumer-debt status and prohibited conduct because mere allegations or time-barred-debt theories are insufficient to survive summary judgment.
NJ Appeals Court Says Using a Mail Vendor Doesn’t Violate the FDCPA
Where was this ruling three years ago? A New Jersey Appeals Court has affirmed the dismissal of a Fair Debt Collection Practices Act case, ruling that the defendant’s use of a vendor to print and mail letters is not a violation of the statute, because sending the plaintiff’s information to the vendor to print and mail a letter was not an attempt to collect on the debt. More details here.
WHAT THIS MEANS, FROM DAVID SCHULTZ OF HINSHAW CULBERTSON: Isn’t Hunstein dead? The claim is gone from many jurisdictions but it still is hanging around in a few, including New York and New Jersey. The appellate courts in NJ have rejected it a few times but the opinions have been unpublished. This most recent ruling also says it is not for publication (yet?). The court issued a nice, tight opinion 20 days after the oral argument. It is like other rulings from the NJ Appellate Division, but it went further and said that sending data to a letter vendor is “not a communication in connection with the collection of a debt” because it does not “induce payment.” Pretty solid reasoning. Another nail in the coffin. Perhaps by this time next year we will no longer have lingering Hunstein cases.
Judge Rules Attempt to Collect on High APR Loan Did Not Violate FDCPA or California Law
In a case that was defendant by Brendan Little at Lippes Mathias, a District Court judge in California has granted a defendant’s motion for summary judgment that it did not violate the Fair Debt Collection Practices Act and California state law by attempting to collect on a loan where the Annual Percentage Rate (APR) was more than 125%. The judge granted the motion while a motion for class certification was pending. More details here.
WHAT THIS MEANS, FROM JUSTIN PENN OF HINSHAW CULBERTSON: This case is interesting for two reasons. First, it highlights the potential state by state considerations for some issues like usuary. Second, it highlights the interplay between merits and class determinations in class actions. With respect to the former, this analysis of usury law is helpful in California, and is sound reasoning. It should be noted, however, that the usury laws vary from state to state, and the holding here will only apply in other states in instances where the law is similar or the same. With respect to the latter, there is a risk of moving for summary judgment before class certification in that a defendant may waive the doctrine of one-way-intervention. That means that the defendant has asked for the merits to be decided before the class is certified, which could result in an unfavorable merits ruling prior to class certification. In this case, the ruling is obviously favorable, but it also does not bind the class. This outcome is not necessarily unfavorable, but certainly something to consider when making strategic litigation decisions.
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.
