I’m thrilled to announce that Frost Echols is the new sponsor for the Compliance Digest. Frost Echols reputation has been built on aggressively protecting the rights of businesses throughout our local jurisdictions. Founding partners, Mike Frost and Chad Echols, developed a deep understanding of regulatory compliance, commercial litigation and business operations through years of advising executives in the collection industry. We are committed to a strategic, economic, and aggressive approach to your legal representation.
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 Allows FCRA Claims Against Credit Bureaus to Proceed Over Disputed Interest Charge
A District Court judge in Illinois has denied a motion to dismiss filed by three credit reporting agencies accused of violating the Fair Credit Reporting Act over the inclusion of a disputed finance charge on the plaintiff’s credit card bill and credit report. More details here.
WHAT THIS MEANS, FROM JUSTIN PENN OF HINSHAW CULBERTSON: If this case does not settle, we will likely be reading about it again at its conclusion. This case presents a good example of the quagmire of potential considerations when the inaccurate credit reporting theory relies on both factual and legal inaccuracies. The procedural history of this case reveals that the Plaintiff’s first bite at the apple was rejected because Plaintiff asserted only legal inaccuracies in the information reported (which the Court held the CRA was “neither qualified nor required” to determine). When the plaintiff amended, the new theory tried to assert factual inaccuracies that should have been uncovered. As the judge noted, the amended complaint presented a close call. Because the Court was required to view the facts in the light most favorable to the consumer, it did not feel comfortable holding that no reinvestigation by the CRAs could have uncovered the newly alleged factual inaccuracy. Left open is whether there is in fact an inaccuracy and, if so, whether the CRA here had sufficient information to determine the inaccuracy of the information. It also appears that the Court left open whether the inaccuracy is a mixed legal and factual question, which the Court notes would also not be appropriate for a CRA to determine. We will be watching to see how the facts develop and if there is a future more instructive outcome, but the case presents a nice discussion of the distinction between factual and legal inaccuracies and the respective implications on credit reporting.
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Judge Scolds Plaintiff’s Attorney For Conduct During FCRA Settlement Conference
A Magistrate Court judge in Pennsylvania has admonished a plaintiff’s attorney for her behavior before and during a settlement conference in a Fair Credit Reporting Act case, declining to hand out further punishment. More details here.
WHAT THIS MEANS, FROM KHARI GRIFFIN OF CLARK HILL: This recent FCRA case from the Eastern District of Pennsylvania provides a solid reminder, that attorneys are expected to maintain the highest level of decorum in consumer finance litigation and in virtual proceedings generally. A plaintiff’s attorney failed to do so before and during an FCRA settlement conference, leading to her admonishment by a federal magistrate judge. Prior to the settlement conference, the attorney failed to respond to chamber emails concerning scheduling and failed to review or adhere to the court’s order, filing its settlement memorandum just before midnight. Plaintiff’s attorney then appeared late to the remote conference, logging in from her car while wearing casual clothing. Although the judge declined to do so in this case, such behavior warrants consideration for various sanctions including award of expenses. On the defense side, we must always keep this in mind so as not to disadvantage our upstanding clients!
Court Reinforces Limits on Furnisher Liability in Credit Reporting Disputes
A District Court judge in Tennessee has granted a defendant’s motion to dismiss claims it violated the Fair Credit Reporting Act over claims it misreported the plaintiff’s mortgage payment as being late. Ultimately, the judge concluded that the plaintiff failed to allege facts sufficient to trigger the defendant’s statutory duties as a furnisher of information and, in several instances, relied on provisions of the FCRA that do not apply to furnishers at all. More details here.
WHAT THIS MEANS, FROM ERICA KRAMER OF HUDSON COOK: Though the Defendant’s Motion to Dismiss was granted in the Gipson case because there is no private right of action for these types of claims, we caution that federal law does impose duties on furnishers to conduct reasonable investigations of direct disputes (not just disputes received from a credit reporting agency (i.e., indirect disputes)), and to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information furnished. Furnishing practices and dispute investigations are subject to heightened regulatory scrutiny and cases brough by regulators on such issues often lead to substantial penalties. Therefore, it’s important to have your furnisher and dispute investigation policies and procedures vetted by experienced compliance counsel.
Judge Denies MTD in FDCPA, RFDCPA Case Over Repossession
A District Court judge in California has denied a defendant’s motion to dismiss claims it violated the Fair Debt Collection Practices Act and the Rosenthal Fair Debt Collection Practices Act because, as many of you will know, at the motion to dismiss stage, the judge has to accept the claims made in a complaint as true. In doing so, the court allowed claims tied to an allegedly improper vehicle repossession to move forward, offering another reminder of how breach-of-the-peace allegations can derail early dismissal efforts in repossession cases. More details here.
WHAT THIS MEANS, FROM JESSICA KLANDER OF BASSFORD REMELE: California courts continue to take a hard line on nonjudicial repossessions, with zero tolerance for forced entry. Allegations that a repossession agent cut a lock or entered gated private property—standing alone—can be enough to plead a breach of the peace and extinguish a lender’s right to possession, even when default is undisputed. Importantly, lenders may face statutory exposure based on the conduct of third-party repossession vendors. The takeaway is straightforward: agents must disengage when access requires defeating a security measure, and strong vendor controls and escalation protocols are essential to managing litigation risk.
Seventh Circuit Revives FDCPA Class Action Over Alleged “Artificial” Acceleration Threat
The Court of Appeals for the Seventh Circuit has reversed a lower court’s dismissal of a Fair Debt Collection Practices Act class-action lawsuit, ruling that the threat of accelerating the debt which induced the plaintiff to make a payment is sufficient for the plaintiff to have standing to sue. The panel also questioned whether the defendant, a mortgage servicer, could rely on the mortgage’s notice-and-cure provision without proving it was an assignee of the lender under Illinois law. More details here.
WHAT THIS MEANS, FROM CRYSTAL DUPLAY OF FROST ECHOLS: In Milam v. Selene Finance, LP, the U.S. Court of Appeals for the Seventh Circuit addressed a dispute between Illinois homeowner Ramona Milam and her mortgage servicer, Selene Finance. Milam failed to make a payment and 47 days after its due date, Selene sent a delinquency letter stating that Milam’s loan would be accelerated if Milam did not cure the default within 35 days. Milam alleged Selene would not actually enforce those remedies until the loan was at least 120 days overdue, making the threat misleading under the Fair Debt Collection Practices Act and related Illinois law. The district court dismissed Milam’s complaint. On appeal, the Seventh Circuit concluded Milam had alleged a concrete injury for Article III standing but found the pleadings did not establish Selene was an assignee under Illinois law, distinguishing assignment from mere servicing duties. The appellate court reversed the dismissal and remanded for further proceedings. It is essential for servicers and lenders to understand the differences between servicing and assigning.
FCRA Case Highlights Importance of Pleading Concrete Damages
A District Court judge in California has granted a furnisher’s motion to dismiss claims it violated the Fair Credit Reporting Act because the plaintiff was not specific enough in detailing the damages he suffered, but the plaintiff has attempted to rectify that by filing a third amended complaint in which he claims a range of concrete financial and emotional harms tied to the alleged inaccurate credit reporting. More details here.
WHAT THIS MEANS, FROM BRENT YARBOROUGH OF MAURICE WUTSCHER: In his third amended complaint, the plaintiff alleges that he is a disabled combat veteran who was victimized by a financial scam, and that he suffered extensive damages as the result of his creditor’s alleged failure to conduct a proper investigation of his credit-reporting disputes. Of course, this case is still at the pleadings stage, so it is yet to be determined whether the plaintiff can prove his allegations and, importantly, tie his alleged damages to the conduct of the defendants. However, the nature and the extent of the damages alleged in the amended complaint serve as a stark reminder of the importance of good credit-reporting procedures.
Court Faults Furnisher for Reporting Balance After Debt Was Eliminated
A District Court judge in Indiana has denied a defendant’s motion for summary judgment and partially granted a plaintiff’s summary judgment motion in a Fair Credit Reporting Act case over how a debt was reported after the plaintiff successfully had the debt extinguished via legal proceedings, finding that at least some of the furnisher’s reporting was inaccurate as a matter of law. More details here.
WHAT THIS MEANS, FROM DALE GOLDEN OF MARTIN GOLDEN LYONS WATTS MORGAN: When is a final judgment final? In this case, the creditor argued that its appeal of a final judgment eliminating the deficiency balance on the underlying car loan permitted it to continue to credit report the loan a valid. But the court rejected that argument relying on settled law holding that an appeal merely stays execution on the judgment. What’s interesting about the ruling is that even though the court determined that the defendant inaccurately reported the account, it denied plaintiff’s request for summary judgment on the “reasonable investigation” element of his FCRA claims. To support his argument, the plaintiff relied on deposition testimony of the defendant’s collection supervisor, who admitted that the defendant should have adjusted the current balance and past due to $0, yet failed to do so. The court, while noting that the testimony “may be of great value to [the plaintiff] at trial,” ruled the testimony didn’t establish that defendant failed to conduct a reasonable investigation.
It’s particularly worth noting that Plaintiff initiated seven separate disputes with the CRAs over the course of two years. Each dispute identified the judgment as having extinguished the debt. There is, of course, no information regarding any sort of settlement negotiations that occurred in the case in the Order, but this seems like a case that should have been settled quickly and quietly.
Judge Allows FCRA Reverification Claim to Proceed While Dismissing Report Preparation Allegations
A District Court judge in Alabama has partially granted a defendant’s motion to dismiss claims it violated the Fair Credit Reporting Act, but denied the motion on a claim over how it conducted its investigation after the plaintiff disputed the debt. The court’s opinion offers a detailed look at what consumers must allege to state a viable report preparation claim and also reinforces the statutory obligations that apply once a dispute is submitted. More details here.
WHAT THIS MEANS, FROM JOHN MAREES OF MESSER STRICKLER BURNETTE: This ruling reflects how courts continue to distinguish between initial credit reporting and post-dispute responsibilities under the FCRA. It tends to suggest that courts will closely examine whether dispute responses comply with the FCRA’s requirements, including how information was verified. For compliance professionals, this decision serves as a reminder to ensure dispute workflows are clearly defined, consistently applied, and able to explain verification steps in plain terms.
Judge Denies MTD in FCRA Suit Over Reporting of Post-Petition Debts
A District Court judge in Illinois has denied a defendant’s motion to dismiss claims it violated the Fair Credit Reporting Act after noting that a pair of debts were discharged in bankruptcy even though they were incurred after the bankruptcy had been discharged. More details here.
WHAT THIS MEANS, FROM NABIL FOSTER OF BARRON & NEWBURGER: In the early 1980’s, the ATP introduced the Cyclops infra-red beam system to help a line judge decide if a tennis ball bounced completely outside the lines. Technology improved and starting in 2007, Cyclops’s eye was poked out, a la Odysseus, by the Hawk-Eye system, and in 2022 the US Open had no line judges.
In 2026, MLB teams will use the Hawk-Eye cameras as part of an Automated Ball-Strike Challenge System (“ABS”). Much like the introduction of Cyclops in the 80’s, ABS system is a tool that will track each baseball pitch into each batter’s specific strike zone (as adjusted by the batter’s height). The ABS system can be activated to either assist the human judges or to challenge the human judges, depending on your philosophical perspective.
The cultural clamor for AI and computer assisted decision systems to enter all aspects of our lives makes it hard to find clarity in the cacophony. As we close out 2025, this court opinion denying a motion to dismiss is a good reminder that although a motion to dismiss is based upon a rule of civil procedure, the results our adversary system are purposely not instantaneous, and they are reliant on human judgment calls. The judge wrote “Ultimately, though, ‘whether a party actually knows something is a question of fact’ that should not be decided until the parties have ‘had an opportunity to put on . . . evidence’” and “factual determinations—especially those concerning reasonableness—are best left for a later day.” And so it goes, and so it goes, until the next one, I suppose.
Judge Grants MTD in FCRA and FDCPA Suit Over Alleged False Affidavit of Service
A District Court judge in Maryland has granted a defendant’s motion to dismiss claims it violated the Fair Credit Reporting Act and the Fair Debt Collection Practices Act, as well as a motion seeking sanctions against the defendant, over allegations that the defendant knowingly submitted a false affidavit of service in a collection lawsuit filed against the plaintiff. More details here.
WHAT THIS MEANS, FROM STACY RODRIGUEZ OF ACTUATE LAW: A federal district court in Maryland recently dismissed the claims of a pro se plaintiff who claimed that a false verification of service led to a default judgment against him in a state court collection action. The federal court did not consider the merits of the purported “sewer service” allegations, but instead dismissed the causes of action for pleading deficiencies – i.e., failure to identify the specific FDCPA or FCRA subsection at issue or supporting facts appropriate for the claims at issue. Looking at the Complaint, the prompt dismissal is understandable. The complaint is vague and conclusory; no details at all are provided about the allegedly false service affidavit and there are incomplete placeholders for facts.
The lawsuit, however, is a good reminder of the importance of instituting procedures to document and ensure proper service of process. Had this plaintiff pled supporting facts (accurate or not), the complaint may have survived the initial motion to dismiss, forcing the defendants to justify their actions and prove legitimate service. Whether you are a law firm hiring a process server, or the creditor or master servicer hiring a law firm that uses process servers, there should be insight into the service of process controls in place, with certain mandatory standards and quality assurance supervision. Exercise diligence when selecting service companies, and make sure they exercise diligence in hiring and monitoring employees. Ensure that service attempts and affidavits are meticulously documented and include detailed facts. Consider what technology the service company uses to create verifiable records – time-stamped photo evidence, GPS tracking, etc. Understand and consider setting your own standards for the number of service attempts, procedures to verify addresses, point at which alternative service is pursued, etc. If faced with a sewer-service claim, whether a one-off lawsuit or large-scale investigation, all parties involved – the individual process server, service company, attorneys handling suit, and the creditor that hired the attorneys, etc. – may need to justify their actions and oversight of the process.
CFPB Lives On – for Now – as Judge Blocks Effort to Starve Regulator of Funding
A federal judge yesterday blocked the Trump administration’s latest attempt to defund and effectively shut down the Consumer Financial Protection Bureau, ruling that the agency must continue to receive funding from the Federal Reserve even while broader legal battles over its future play out. More details here.
21 States Sue Trump Administration Over ‘Illegal’ Defunding of CFPB
A coalition of nearly two dozen Democratic state attorneys general is asking a federal judge to force the Trump administration to keep the Consumer Financial Protection Bureau open, escalating the already-intense legal fight over whether the White House can effectively shut down the nation’s consumer finance watchdog by cutting off its funding. More details here.
WHAT THIS MEANS, FROM CAREN ENLOE OF SMITH DEBNAM: Over the past few weeks, the battle over the continuing existence of the CFPB has intensified. In early 2025, the National Treasury Employees Union and others filed a complaint challenging the administration’s directive to shut down the CFPB. See National Treasury Employees Union v. Vought, Case No, 25-cv-00381-ABJ (D.D.C.). In March of 2025, the judge in that case issued a preliminary injunction which was designed to ensure that the CFPB would continue to exist and would perform its statutorily required duties while the merits of the claims were litigated. While portions of that injunction were modified on appellate review, it has remained in place as to the CFPB’s conduct to ensure it will not be shut down prior to a full adjudication. That litigation has again come to a head with the CFPB asserting that it will run out of funds in early 2026 and cannot request funds from the Federal Reserve System because it is losing money. On December 30, 2025, the district court disagreed, holding that “the preliminary injunction obligates the defendants to perform certain specific statutory functions and to maintain a sufficient number of employees and the physical space and technological capacity to do them.”
It is almost a certainty that the CFPB will appeal the district court’s order. Further intensifying the battle, two more lawsuits have been filed – one in the N.D. California, challenging “Vought’s [the acting director] attempt to engineer that shutdown by starving the CFPB of funding,” Rise Economy v. Vought, No. 25-10481 (N.D. Cal. Dec. 5, 2025) (Complaint, ¶ 4) and one filed by 22 state attorneys general in the District of Oregon making similar allegations. See State of New York v. Vought, No. 25-2384 (D. Or. Dec. 22, 2025). The immediate implications of the funding issue are significant and could impact the Bureau’s Rulemaking Agenda, including rulemaking that is favorable to industry. The issues raised in these three lawsuits, and ultimately the fate of the CFPB, are likely to be headed to the Supreme Court and in light of the funding issue, they may reach the Court sooner than later.
Court Recommends Dismissal of FDCPA Case Over Plaintiff’s Discovery Failures
A Magistrate Court judge in New York has recommended that a defendant’s motion to dismiss claims it violated the Fair Debt Collection Practices Act be granted, largely based on the behavior and actions of the plaintiff, citing repeated failures to comply with discovery obligations and court orders over the course of the litigation. The recommendation, if adopted by the District Court, would bring an end to a case that has been pending for nearly five years and marked by what the court described as willful noncompliance and dilatory conduct by the plaintiff. More details here.
WHAT THIS MEANS, FROM DAVID SHAVER OF SURDYK DOWD & TURNER: Though it’s undeniable that Plaintiff Frederick Silver helped sink his own ship in this case, Magistrate Judge Jeremiah J. McCarthy’s Report and Recommendation and Order in Silver v. Capital Management Services, LP contains some excellent reminders for agencies defending themselves against a pro se plaintiff. When a pro se plaintiff files suit, a case is often poised to go in one of two directions: a quick and reasonable resolution, or a long, drawn-out and expensive litigation process. Unfortunately for Defendant Capital Management Services, LP, its case with Silver became the latter. Notwithstanding Silver’s attempts to muddy the waters with frivolous motions and delays, Capital Management and its counsel did an excellent job of staying the course, keeping the pressure on Silver in discovery, and creating a record along the way. They also did an excellent job of letting Silver be his own worst enemy. Had Capital Management not done so – and had Silver acted more reasonably – Magistrate Judge McCarthy may not have been able to reach the conclusions that he did. So, when you’re dealing with a pro se plaintiff, hold their feet to the discovery fire. Hold them accountable under the Rules of Civil Procedure. And make sure you make your record along the way. Pro se litigants are likely to make missteps, and those missteps can be used to help achieve the ultimate goal: dismissal of the claims at issue.
Frost Echols reputation has been built on aggressively protecting the rights of businesses throughout our local jurisdictions. Founding partners, Mike Frost and Chad Echols, developed a deep understanding of regulatory compliance, commercial litigation and business operations through years of advising executives in the collection industry. We are committed to a strategic, economic, and aggressive approach to your legal representation.
