There are no small roles, only small actors, the saying goes. The same isn’t true for lawsuits and new rules and regulations. Some are more important than others. To get a sense of what shaped the compliance landscape for the credit and collection industry in 2025, AccountsRecovery asked legal experts for what was at the top of their list for the biggest legal and compliance news.
Lauren Burnette, Messer Strickler Burnette
2025 was the beginning of the end of the “pro se litigant” as we know it. Courts have historically treated self-represented litigants with at least some degree of deference. Some courts are more lenient than others, but all of them operate on the same basic assumption: non-attorney, self-represented individuals do not have knowledge of or access to the same resources as attorneys and thus can’t be treated the same. For decades, this was largely true—only those with access to law libraries could even access case law, let alone put together pleadings and motions with solid factual and legal foundations. Internet access to case law, dockets and other resources changed this imbalance, and was praised by many as giving self-represented persons the tools necessary to navigate the civil litigation process.
AI changes everything, but the coming shift in how debt collectors litigate with self-represented consumers will be seismic. Today’s pro se parties are better described as AI-assisted rather than self-represented. They have access to large language models trained specifically on debt collection lawsuits and consumer protection statutes. They have legal opinions at their fingertips. Generative resources are capable of creating pleadings in seconds. Consumers can respond to written discovery requests in record time, and they can serve objections even faster. AI will answer innocuous emails with lengthy narratives designed to set up a sanctions motion or follow-on FDCPA litigation. And since AI learns as it goes, every document fed to it by the AI-assisted litigant just makes the AI-generated product more refined over time.
Since 2025 was the beginning of the end of the traditional pro se litigant, 2026 has to be the beginning of the industry’s adaptation to the AI-assisted litigant era. Ultimately, everyone in the credit and collection industry, from creditors on down the line, will need to reevaluate their collection litigation strategies, and factor this new type of litigant into their compliance practices as well.
Xerxes Martin, Martin Golden Lyons Watts Morgan
On the case law side—Reyes v. Equifax Info. Servs., L..L.C., was an impactful Fair Credit Reporting Act (“FCRA”) case out of the Fifth Circuit. In Reyes, the Fifth Circuit affirmed summary judgment for Equifax, holding that Reyes could not prevail on her FCRA reinvestigation claim because the Citibank tradeline Equifax reported was accurate and that § 1681i cannot be used to collaterally attack the legal validity of the underlying debt. The opinion united with other circuits that inaccuracy is a threshold element of a § 1681i claim, that without showing the information in the consumer’s file is inaccurate (patently incorrect or materially misleading), a reinvestigation claim fails. Last, the alleged inaccuracy reported by the consumer reporting agency must first be “sufficiently objectively verifiable” to be actionable under the FCRA. This opinion should help combat the volume of FCRA claims with boilerplate, or false disputes made to create an FCRA claim.
On the compliance side—text messaging. Probably the most compliance work done this year by Loraine Lyons and Heath Morgan was directed towards text messaging. We have often said the accounts receivables industry is a bit slow in modernizing, but with rising costs, technology can help. A lot of the issues with texting reveal themselves through trial and error, but also what plaintiff’s attorneys can come up with and allege in a Fair Debt Collection Practices Act (“FDCPA”) claim. Specifically, the bulk of these issues/claims focused on whether the proper opt out mechanisms were correctly implemented, and the handling of text responses. The majority of texting based FDCPA claims we saw this year were claims that disputes, cease communication requests, and/or refusals to pay were not honored. Unfortunately, a lot opportunistic pro se plaintiffs try various ways to trip up the reviewers of these texts to create a claim. Agencies must have their texting policies and procedures buttoned up to prevent falling victim to these traps.
Scott Wortman, Bounce AI
There were several precedential decisions issued in 2025 that collectively clarified where courts expect greater procedural rigor from debt collectors while also reinforcing important limits on consumer litigation. Together, three cases in particular helped to shape compliance priorities in core operational areas by drawing clearer lines around state collection litigation finality, credit reporting accuracy, and dispute handling.
In Delgado v. Midland Credit Management, the Eighth Circuit reinforced the preclusive effect of state-court default judgments in subsequent federal FDCPA litigation, holding that a consumer could not collaterally attack debt ownership after a default judgment necessarily established a valid chain of assignment. This decision brought welcome clarity (at least in the 8th Circuit) by confirming that properly obtained state default judgments can serve as a meaningful shield against later federal claims.
By contrast, in Roberts v. Carter-Young, Inc., the Fourth Circuit expanded the scope of furnisher obligations under the FCRA, by rejecting a distinction between legal and factual disputes, holding that both may trigger a duty to investigate if the alleged inaccuracy is objectively and readily verifiable. While the court acknowledged that the FCRA does not explicitly define “completeness or accuracy,” the decision still managed to reshape compliance programs by requiring agencies to reassess dispute workflows, particularly where disputes implicate debt existence from a legal standpoint, or contractual obligations. The decision also demonstrates the heightened litigation risk when furnishers rely solely on creditor recertification without independent analysis.
Finally, the Seventh Circuit’s decision in Wood v. Security Credit Services, LLC underscored expectations around credit reporting accuracy for purchased receivables, by holding that a failure by current creditor to report a known or reasonably knowable dispute with a predecessor in interest, can create both liability and standing. The Seventh Circuit’s emphasis on a “should have known” standard pushed the industry in 2025 toward stronger diligence in portfolio acquisitions, clearer contractual representations, and enhanced internal controls around dispute status.
There are no small roles, only small actors, the saying goes. The same isn’t true for lawsuits and new rules and regulations. Some are more important than others. To get a sense of what shaped the compliance landscape for the credit and collection industry in 2025, AccountsRecovery asked legal experts for what was at the top of their list for the biggest legal and compliance news.
Lauren Burnette, Messer Strickler Burnette
2025 was the beginning of the end of the “pro se litigant” as we know it. Courts have historically treated self-represented litigants with at least some degree of deference. Some courts are more lenient than others, but all of them operate on the same basic assumption: non-attorney, self-represented individuals do not have knowledge of or access to the same resources as attorneys and thus can’t be treated the same. For decades, this was largely true—only those with access to law libraries could even access case law, let alone put together pleadings and motions with solid factual and legal foundations. Internet access to case law, dockets and other resources changed this imbalance, and was praised by many as giving self-represented persons the tools necessary to navigate the civil litigation process.
AI changes everything, but the coming shift in how debt collectors litigate with self-represented consumers will be seismic. Today’s pro se parties are better described as AI-assisted rather than self-represented. They have access to large language models trained specifically on debt collection lawsuits and consumer protection statutes. They have legal opinions at their fingertips. Generative resources are capable of creating pleadings in seconds. Consumers can respond to written discovery requests in record time, and they can serve objections even faster. AI will answer innocuous emails with lengthy narratives designed to set up a sanctions motion or follow-on FDCPA litigation. And since AI learns as it goes, every document fed to it by the AI-assisted litigant just makes the AI-generated product more refined over time.
Since 2025 was the beginning of the end of the traditional pro se litigant, 2026 has to be the beginning of the industry’s adaptation to the AI-assisted litigant era. Ultimately, everyone in the credit and collection industry, from creditors on down the line, will need to reevaluate their collection litigation strategies, and factor this new type of litigant into their compliance practices as well.
Xerxes Martin, Martin Golden Lyons Watts Morgan
On the case law side—Reyes v. Equifax Info. Servs., L..L.C., was an impactful Fair Credit Reporting Act (“FCRA”) case out of the Fifth Circuit. In Reyes, the Fifth Circuit affirmed summary judgment for Equifax, holding that Reyes could not prevail on her FCRA reinvestigation claim because the Citibank tradeline Equifax reported was accurate and that § 1681i cannot be used to collaterally attack the legal validity of the underlying debt. The opinion united with other circuits that inaccuracy is a threshold element of a § 1681i claim, that without showing the information in the consumer’s file is inaccurate (patently incorrect or materially misleading), a reinvestigation claim fails. Last, the alleged inaccuracy reported by the consumer reporting agency must first be “sufficiently objectively verifiable” to be actionable under the FCRA. This opinion should help combat the volume of FCRA claims with boilerplate, or false disputes made to create an FCRA claim.
On the compliance side—text messaging. Probably the most compliance work done this year by Loraine Lyons and Heath Morgan was directed towards text messaging. We have often said the accounts receivables industry is a bit slow in modernizing, but with rising costs, technology can help. A lot of the issues with texting reveal themselves through trial and error, but also what plaintiff’s attorneys can come up with and allege in a Fair Debt Collection Practices Act (“FDCPA”) claim. Specifically, the bulk of these issues/claims focused on whether the proper opt out mechanisms were correctly implemented, and the handling of text responses. The majority of texting based FDCPA claims we saw this year were claims that disputes, cease communication requests, and/or refusals to pay were not honored. Unfortunately, a lot opportunistic pro se plaintiffs try various ways to trip up the reviewers of these texts to create a claim. Agencies must have their texting policies and procedures buttoned up to prevent falling victim to these traps.
Scott Wortman, Bounce AI
There were several precedential decisions issued in 2025 that collectively clarified where courts expect greater procedural rigor from debt collectors while also reinforcing important limits on consumer litigation. Together, three cases in particular helped to shape compliance priorities in core operational areas by drawing clearer lines around state collection litigation finality, credit reporting accuracy, and dispute handling.
In Delgado v. Midland Credit Management, the Eighth Circuit reinforced the preclusive effect of state-court default judgments in subsequent federal FDCPA litigation, holding that a consumer could not collaterally attack debt ownership after a default judgment necessarily established a valid chain of assignment. This decision brought welcome clarity (at least in the 8th Circuit) by confirming that properly obtained state default judgments can serve as a meaningful shield against later federal claims.
By contrast, in Roberts v. Carter-Young, Inc., the Fourth Circuit expanded the scope of furnisher obligations under the FCRA, by rejecting a distinction between legal and factual disputes, holding that both may trigger a duty to investigate if the alleged inaccuracy is objectively and readily verifiable. While the court acknowledged that the FCRA does not explicitly define “completeness or accuracy,” the decision still managed to reshape compliance programs by requiring agencies to reassess dispute workflows, particularly where disputes implicate debt existence from a legal standpoint, or contractual obligations. The decision also demonstrates the heightened litigation risk when furnishers rely solely on creditor recertification without independent analysis.
Finally, the Seventh Circuit’s decision in Wood v. Security Credit Services, LLC underscored expectations around credit reporting accuracy for purchased receivables, by holding that a failure by current creditor to report a known or reasonably knowable dispute with a predecessor in interest, can create both liability and standing. The Seventh Circuit’s emphasis on a “should have known” standard pushed the industry in 2025 toward stronger diligence in portfolio acquisitions, clearer contractual representations, and enhanced internal controls around dispute status.
