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.
Court: Using Registered Alternate Business Name Does Not Violate FDCPA
In a case that was defended by Rick Perr at Kaufman Dolowich, a state court judge in New Jersey has granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act case after the defendant was accused of being deceptive by using an abbreviation for its registered alternative business name in voicemails left with the plaintiff. More details here.
WHAT THIS MEANS, FROM LORI QUINN OF MESSER STRICKLER BURNETTE: Plaintiffs filed a lawsuit in the Superior Court, New Jersey alleging violations of the Fair Debt Collection Practices Act (“FDCPA”) related to voicemail messages left identifying the caller as “ARS.” The Court granted Defendant’s Motion for Summary Judgment while finding Plaintiff’s Motion for Class Certification Moot finding that Defendant’s use of its alternate registered name was not a violation of Section 1692(e)14 because it used its legally recognized alternate business name and provided the Court with credible evidence. In addition, Defendant’s call was not deceptive under Section 1692(e)10 because it met the threshold standard set forth by the Third Circuit – the name of the debt collection company and the nature of the company’s business. Finally, in analyzing Plaintiff’s claim using the “least sophisticated consumer standard” that a search of “ARS” that resulted in several other business entities and the volume of calls over a 15-month period was determinable by Plaintiff and not harassing.
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Judge: Even a 150-Page Complaint Must State a Claim
At the very least, you have to hand it to this guy for being a good son. A District Court judge in Michigan has dismissed a Fair Debt Collection Practices Act lawsuit filed against 14 different defendants, ruling that the 150-page complaint filed by a man on behalf of his 88-year-old mother who suffers from dementia, ruling that even at that length the complaint failed to state “any viable claim.” More details here.
WHAT THIS MEANS, FROM JAMES K. SCHULTZ OF SESSIONS, ISRAEL & SHARTLE: The number of ChatGPT pro se lawyers filing lawsuits is growing faster than the non-pardoned turkey fleeing from the White House after being runner-up in the Turkey Pardon Pageant. But as this case highlights, length does not mean quality, and judges, like the rest of us, appreciate brevity in writing. Most pro se consumers, and the AI, have not figured out that shorter is better quite yet THOUGH. The rules only require a plaintiff to file a short and plain statement describing their beef. When plaintiffs go the other way trying to overwhelm a defendant in prolix, it is important to remember that we don’t have to play that game and respond in kind. Many courts, like this one, will lend a sympathetic ear and make plaintiff try again to write a complaint that can be digested as easy as a slice of pumpkin pie.
Court Says FDCPA Claim Over Signing Bonus Can Proceed, Dismisses FCRA Claim
A District Court judge in Pennsylvania has partially dismissed a suit filed by a consumer alleging violations of the Fair Credit Reporting Act and Fair Debt Collection Practices Act over attempts to collect an employment signing bonus that was not fully repaid. More details here.
WHAT THIS MEANS, FROM JESSICA KLANDER OF BASSFORD REMELE: In this case, the court held that a signing bonus can qualify as a “debt” under the FDCPA if the money was used for personal or household purposes. The court rejected the idea that anything connected to employment is automatically a commercial obligation outside the FDCPA. As a result, agencies collecting on bonus clawbacks, relocation reimbursements, or employee advances may now fall squarely under FDCPA requirements. Bottom line: when employment-related repayments are involved, courts are trending toward FDCPA coverage—so build your compliance processes with that expectation in mind.
Wisconsin Court Affirms Dismissal in Meaningful Involvement Challenge
A Wisconsin Appeals Court has affirmed a ruling dismissing counterclaims against a collection operation, accusing it of violating the Fair Debt Collection Practices Act and Wisconsin state law for, among other claims, its attorney not being meaningfully involved. More details here.
WHAT THIS MEANS, FROM BRENT YARBOROUGH OF MAURICE WUTSCHER: The Wisconsin Court of Appeals confirmed that a consumer cannot bring a “meaningful involvement” claim under the Wisconsin Consumer Act. The consumer also appealed the dismissal of her counterclaim based on an alleged failure to provide her with notice of the right to cure her default. The Court of Appeals likewise affirmed the dismissal of that claim, noting that the only remedy for the failure to deliver a right-to-cure notice is dismissal of the collection complaint.
Judge Dismisses FCRA, FDCPA Claims Rooted in Sovereign Citizen Arguments
In what has all the markings of a sovereign citizen case, a District Court judge in Idaho has dismissed claims that a creditor violated the Fair Credit Reporting Act and Fair Debt Collection Practices Act after the plaintiff financed the purchase of an $85,000 vehicle. More details here.
WHAT THIS MEANS, FROM MIKE FROST OF FROST ECHOLS: In Allen v. Idaho Central Credit Union, the plaintiff purchased a 2023 Toyota Sequoia for approximately $84,700 and soon began disputing the underlying loan by filing unconventional documents—declaring himself to have signed the contract “without recourse,” appointing the creditor’s CFO as his “fiduciary,” transferring the vehicle to a private trust, and claiming the debt had been extinguished through self-generated paperwork. He later sent a series of letters insisting the loan was satisfied and demanding clear title, before filing a 93-page complaint asserting 17 causes of action, including claims under the FCRA, FDCPA, and several federal criminal statutes. Judge Amanda K. Brailsford of the District of Idaho dismissed or granted summary judgment for the defendants on every federal claim, emphasizing that many of the plaintiff’s theories relied on criminal statutes that confer no private right of action. Judge Brailsford sniffed out the sovereign citizen structure of the Plaintiff’s arguments and stated: “a private citizen is not empowered … to prosecute criminal statutes.” The FCRA claim failed because the plaintiff disputed the debt only with the creditor rather than a credit bureau, and the FDCPA claim failed because the defendant was a creditor collecting its own debt, not a debt collector. With no viable federal claims remaining, the Court declined supplemental jurisdiction over the state law issues and closed the case. In many of these “sovereign citizen” type claims, early, well-supported motions to dismiss or summary judgment motions tend to be successful, as judges across the U.S. have shown little tolerance for these theories once the factual record and governing law are presented.
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.
