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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.
W.V. Court Certifies Class Action Over CU’s $5 ‘Pay-to-Pay’ Fees
A District Court judge in West Virginia has certified a class action against a credit union that was accused of violating state law by charging a “pay-to-pay” fee of $5 for making a payment over the telephone. The ruling allows hundreds of consumers in West Virginia to move forward collectively in their claims that the credit union’s practice violated provisions of the West Virginia Consumer Credit and Protection Act. More details here.
WHAT THIS MEANS, FROM RICK PERR OF KAUFMAN DOLOWICH: This case is a cautionary tale for agencies charging convenience fees to consumers that purport to be in excess of the cost of the transaction from the payment processor. Not only is there a risk from the individual consumer, but there is also a risk that the agency would have to return payments to every single person charged the fee within the statute of limitations. Here, the plaintiff claims to have been charged $5.00 for a transaction that costs the credit union $0.30. While the facts of the case would have to be vetted during discovery and possibly a trial, the Court allowed for a class of payors to be certified. This exposes the credit union to significant damages if true. It is a reminder that compliance on the front end could have prevented a costly law suit even if the credit union ultimately prevails.
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Colorado Sued Over Medical Debt Credit Reporting Ban
ACA International and Creditors Bureau USA yesterday filed a lawsuit challenging Colorado’s medical debt credit reporting law on the grounds that it is preempted by the Fair Credit Reporting Act. The suit was filed days after the Consumer Financial Protection Bureau formally withdrew guidance and stated that the FCRA preempts state laws governing credit reporting. More details here.
WHAT THIS MEANS, FROM STEFANIE JACKMAN OF TROUTMAN PEPPER LOCKE: ACA International’s lawsuit against Colorado’s medical debt credit reporting law, following the ongoing Frey challenge in Maine, represents a strategic effort that could dramatically reshape the regulatory landscape for industry members. A favorable outcome could potentially upend similar laws across an ever-increasing number of states that have enacted medical debt reporting restrictions. With the CFPB’s recent reinterpretation emphasizing federal preemption and courts increasingly receptive to FCRA arguments, industry victories in these cases could establish binding precedent that invalidates dozens of state medical debt reporting laws nationwide and restores uniform national credit reporting standards. these coordinated legal challenges represent an opportunity to restore transparent credit ecosystems that help keep borrowing costs low and ensure healthcare providers can recover their debts in the same manner as other creditors with outstanding receivables
Court Dismisses Consumer’s FDCPA and FCRA Claims Over Debt Validation and Reporting
A District Court judge in Illinois has granted a defendant’s motion for summary judgment after it was accused of violating five different laws including the Fair Credit Reporting Act and the Fair Debt Collection Practices Act over how it handled the tear-off portion of the Model Validation Notice and a subsequent dispute from the plaintiff. More details here.
WHAT THIS MEANS, FROM MARISSA COYLE OF FROST ECHOLS: Plaintiff, representing himself, alleged LVNV engaged in various violations of law. He included claims pursuant to the FDCPA, FCRA, and Illinois state causes of action. The Court determined all five (5) claims failed as a matter of law.
This case is interesting to me because it serves as a reminder that it is possible to fight the good fight and win even if the initial complaint may seem overwhelming due to the number of claims. Also, you can win against pro se consumers even if you feel like the court oftentimes give them chance after chance. They still have to engage. They still have to have viable causes of action. They still have to prove their case.
Defendant faced a plaintiff bringing a complaint with no merit. Defendant chose to fight. Defendant won. Could Defendant have settled at the outset of the case? Most likely. Is it possible Defendant sent a message not only to this individual but potentially to other pro se consumers? Yes.
Ultimately, upon receiving a complaint that has no merit, it’s important to evaluate your options to determine your options and choose the strategy that works best for your goals and budget.
Illinois Appeals Court Upholds Sanctions Against Consumer Who Fabricated FCRA Evidence
An Illinois Appeals Court has affirmed a trial court’s ruling in favor of a financial institution and sanctions against a consumer who claimed the bank violated the Fair Credit Reporting Act and was found to have manufactured evidence to try and make his case. More details here.
WHAT THIS MEANS, FROM LAUREN BURNETTE OF MESSER STRICKLER BURNETTE:
Appeals Court Upholds Denial of Motion to Vacate Satisfied Debt Judgment in Licensing Dispute
In a case that was defended by Rick Perr and Monica Littman of Kaufman Dolowich, a New Jersey appeals court has affirmed a lower court’s ruling denying a consumer’s motion to vacate a default judgment years after it was satisfied, disagreeing with the consumer’s allegation that the debt was void because previous owners of the debt were not licensed lenders in New Jersey. More details here.
WHAT THIS MEANS, FROM MITCH WILLIAMSON OF BARRON & NEWBURGER: This is just another case brought by an attorney in New Jersey who’s been pushing the claim that debt buyers have to be licensed in New Jersey pursuant to the Jersey Consumer Finance Licensing Act (NJCFLA), N.J.S.A. 17:11C-1 to -49 and if anyone on the chain of title was not then the debt is “void abnitio.” Happily, numerous New Jersey trial courts and appellate panels have not agreed. However he who shall remain unnamed takes the position that under the New Jersey Supreme Court unequivocably shuts him down, he continues to inundate the courts with claims based on his theory.
In this case, the debtor moved to vacate a 2019 default judgment in January 2024. Destroying any argument that she had just become aware of the judgement was the fact that her wages were garnished for months and the judgment was marked satisfied in April of 2023. Clearly Garabedian waited a little too long to move to vacate under the court rules and any equitable remedies she might claim. So what to do?
As with prior cases, he who shall not be named argued that the debt was void as the predecessors in interest to Unifund were not licensed pursuant to the NJCFLA. The Court pointed out that the Appellate Division already ruled, there is no private right of action under the NJCFLA. See Francavilla v. Absolute Resols. VI, LLC, 478 N.J. Super. 171, 180 (App. Div. 2024).
And here lies the takeaway: Without a private right of action, the debtor could not establish the necessary elements to utilize the statute and therefore no other alleged violations premised on an alleged violation of the NJCFLA could succeed.
A second noteworthy comment, was directed at Counsels use of unpublished federal cases. ““We note “decisions of the federal courts of appeals are not binding on this court,” (citation omitted), and therefore decline to consider the out -of-jurisdiction cases cited by plaintiff.””
Judge Finds Factual Disputes in Air Ambulance Billing Collection Case
A District Court judge in Texas has denied a defendant’s motion for summary judgment in a Fair Credit Reporting Act and Fair Debt Collection Practices Act case over the portion of a medical debt that was not paid by the plaintiff’s health insurance when his daughter needed to be transported to a hospital via an air ambulance, but did dismiss one of the claims on the grounds the plaintiff lacks standing because he opened a Model Validation Notice that was inadvertently sent to his ex-wife at his address. More details here.
WHAT THIS MEANS, FROM MICHAEL CHAPMAN OF BASSFORD REMELE: In Ray v. Experian Information Solutions, Inc. and Wakefield & Associates, LLC (N.D. Tex. Oct. 30, 2025), the court refused to grant summary judgment to a collection agency because there were factual disputes about whether it reasonably investigated a disputed air-ambulance bill. The record included an Explanation of Benefits stating the consumer owed zero dollars for the out-of-network portion, which raised questions about the accuracy of continued credit reporting and collection activity. The court allowed the FCRA and FDCPA §§ 1692e(2) and (8) claims to proceed but dismissed the § 1692c(b) disclosure claim for lack of standing. Since the consumer opened the letter himself and only later chose to share it with his ex-wife, there was no concrete harm. The takeaway for collectors is simple: if you have access to documents that show a balance may not be owed, you must review them before furnishing or collecting, while purely technical disclosures with no real-world harm are increasingly vulnerable under current Article III standing law.
Another Hunstein Challenge Falls Flat in N.J. Appellate Decision
Are you as surprised as I was to see that consumers are still trying to get Hunstein cases through the courts? A New Jersey Appeals Court has upheld a lower court’s ruling in a Fair Debt Collection Practices Act case, holding that sharing the personal information of consumers when using a vendor to print and mail collection letters is not a violation of the statute. More details here.
WHAT THIS MEANS, FROM DAVID SCHULTZ OF HINSHAW CULBERTSON: This is another New Jersey Appellate Division opinion that rejects the Hunstein theory. It took the court about six weeks to issue the ruling. The last NJ appellate ruling saying the same thing was issued October 6, 2025. There are several other such rulings. Unfortunately, this and the other opinions are unpublished and not precedent. I understand at least one defendant requested publication but was denied.
I did a bit of digging around on why they are not published. One possible explanation is because a losing Hunstein plaintiff filed a petition to the NJ Supreme Court. It appears that the appellate court may keep the cases unpublished if it looks like the issue is going to the NJ Supreme Court. I could not find a pending or granted cert petition but I suspect that there is one ore more out there. If so, we could finally get a good NJ published opinion on the issue.
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.
