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.
Court Sides With Lender in FCRA and FDCPA Case Over Disputed Home Improvement Loan
A Magistrate Court judge in Idaho has granted a defendant’s motion for summary judgment on claims it violated the Fair Credit Reporting Act and the Fair Debt Collection Practices Act with respect to a home improvement loan on which they made no payments because of a disagreement with the contractor over the quality of the work that was performed, concluding that the debt was accurately reported and that the plaintiffs failed to prove any recoverable damages. More details here.
WHAT THIS MEANS, FROM NICK PROLA OF BASSFORD REMELE: Plaintiff took out a loan for a home renovation, sued the contractor for subpar work, were awarded damages from the contractor, and still made no payments towards the loan. Somehow, these circumstances ultimately made their way to federal court with allegations that Greensky misreported credit information and engaged in improper debt collection.
The court’s evaluation of the FCRA claim focuses on the specific contours of § 1681s-2(b), which obligates furnishers of credit information to investigate disputes rather than to self-police reporting for accuracy in the abstract. The judge concluded that Greensky’s reporting of the delinquent loan was accurate when measured against the contractual terms, even though the plaintiff attempted to reframe contractual milestones such as the promotional period and charge-off timing as material inaccuracies.
Second, the court’s handling of the FDCPA claims illustrates the centrality of damages elements in FDCPA litigation. This may be a lesson in plaintiff’s missteps rather than some commentary on the state of the law. Plaintiff failed to establish concrete actual damages and inexplicably dropped the claim for any statutory damages. Without damages, the court determined that plaintiff failed to set forth a genuine dispute of material fact that they were entitled to relief under the FDCPA.
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Dispute Without a Recipient Is Not Enough, Judge Rules in Granting MJOP
A District Court judge in Virginia has granted a defendant’s motion for judgment on the pleadings in a Fair Credit Reporting Act and Fair Debt Collection Practices Act case because the plaintiff failed to include one important fact about the dispute he filed — who he filed it with. More details here.
WHAT THIS MEANS, FROM STEPHANIE STRICKLER OF MESSER STRICKLER BURNETTE: FCRA claims against furnishers live or die on notice from a consumer reporting agency. A plaintiff’s vague allegation that he “disputed the account” is not enough without identifying the CRA and alleging that the furnisher was notified. This opinion also shows courts are not willing to let plaintiffs bootstrap thin FCRA allegations in FDCPA claims without pleading concrete facts about collection activity—what was communicated, to whom, and why it was deceptive or unfair.
Appeals Court Rejects TCPA Class Certification Appeal in Wrong Number Case
The Court of Appeals for the Sixth Circuit has denied the appeal of class certification from a defendant in a wrong number Telephone Consumer Protection Act case, disagreeing with the defendant that is call records were inadmissible hearsay and finding no abuse of discretion by the district court in certifying the class. More details here.
WHAT THIS MEANS, FROM DAVID KAMINSKI OF CARLSON & MESSER: The subject decision by the 6th Circuit of Court of Appeals in Elliot v. Humana is troubling. Defendants traditionally maintain records of communications with consumers. Sometimes those records are mixed with records of how a call is dispositioned. A person may call in and say “you reached the wrong number” when in reality that is not the truth; a notation in an account note or call record could indicate a wrong number only to mean that there was a busy signal or no ability to reach anyone on the phone. In other words, a “wrong number” class list can be a mixed bag of information.
What the Court of Appeals is saying here, and relying on authorities from other jurisdictions, is that if there is a wrong number call list that a company maintains, it should be as accurate as possible. Further, it should be separated from any other call records that the company maintains.
Plaintiffs traditionally rely on the records of a defendant and how calls are dispositioned to obtain enough information from those records to seek to certify a class. If a company maintains a list of wrong number call records indicating that a potential class member told the company it had reached the wrong Number, a company cannot argue that the list is inaccurate or does not mean with it says. No longer can companies defend class certification based on the argument that its call records are poorly maintained because a court will generally not allow that argument to be relied on as an argument to defeat potential class certification.
NOTE: If your company maintains call records with dispositions of communications from consumers, courts will presume those records are accurate. Those are the records that plaintiff will rely upon to support class certification. Training in this regard is critical and reliance on counsel to discuss the best manner in which to handle such issues and data is important. The last thing a company inadvertently seeks to do is to maintain records or information that could be obtained by plaintiff that paves the way for class certification.
Judge Lets FCRA Disclosure Claim Over Truncated Account Numbers Proceed
A District Court judge in Ohio has denied a defendant’s motion to dismiss claims it violated the Fair Credit Reporting Act by failing to include the complete account numbers associated with items in the plaintiff’s credit report, going into detail over what constitutes a consumer”s “file.” More details here.
WHAT THIS MEANS, FROM CRYSTAL DUPLAY OF FROST ECHOLS: Watkins brought suit against Equifax alleging that Equifax violated the Fair Credit Reporting Act (FCRA) by including the full account numbers on the credit report. Experian argued that is not required to provide full account numbers, only what ‘bears on creditworthiness’. The central dispute is the scope of what must be disclosed pursuant to §1681g(a)(1), if that scope includes full account numbers. Experian filed Motion to Dismiss. The Court denied that Motion stating that the scope of §1681g(a)(1) is a factual question and requires a full record to be developed.
Judge Rejects Bid to Dismiss FCRA Case Over Missing Credit Report Details
A District Court judge in Florida has denied a defendant’s motion for judgment on the pleadings in a Fair Credit Reporting Act case over the information that was included, and not included, on the plaintiff’s credit report, finding that the plaintiff plausibly alleged the credit reporting agency failed to disclose all information contained in her file as required by federal law. More details here.
WHAT THIS MEANS, FROM BRIT SUTTELL OF BARRON & NEWBURGER: As readers are aware, the standard for a Motion for Judgment on the Pleadings is the same a Motion to Dismiss for Failure to State Claim—the court must accept everything in the complaint as true and determine whether plaintiff has stated a claim. In this case, the plaintiff alleged that after they requested a copy of their credit bureau file, the credit reporting agency did not fully disclose all the information in the file, including full account numbers. The credit reporting agency attempted to argue that in bringing a claim under the FCRA, the plaintiff had to argue that there was an inaccuracy in the consumer’s file, not just a failure to disclose information. The Court disagreed finding that the failure of the credit reporting agency to disclose the full account information did not allow the plaintiff to determine whether or not the credit report was accurate.
The case raises an interesting privacy issue because it is standard practice for many in the industry to redact account numbers down to the last four or five digits. Here, the Court says that when a consumer requests their credit file, the credit reporting agency must include the full account number and relevant information.
Judge Grants MSJ for Defense in FCRA, FDCPA Suit
A District Court judge in Virginia has granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act and Fair Credit Reporting Act case over claims the defendant continued to furnish information about the debt after a debt collection lawsuit had been dismissed. More details here.
WHAT THIS MEANS, FROM BRENDAN LITTLE OF LIPPES MATHIAS: Defendant-debt buyer purchased an account belonging to Plaintiff and commenced a state court collection action, but the state court collection action was dismissed with prejudice. Within 9 days of the state court collection action’s dismissal, the debt furnished data to the credit reporting agencies requesting that its prior tradeline be deleted. Nonetheless, Plaintiff, acting pro se, commenced an FCRA action against the debt buyer. The district court dismissed Plaintiff’s Section 1681s-2(b) claim for two reasons. First, because Plaintiff failed to dispute the tradeline with the credit reporting agencies after the dismissal of the state court collection action, Plaintiff could not pursue this claim even if the debt-buyer had actual notice of the dismissal of the state law collection action. Second, Plaintiff’s claim concerning the dispute of the account prior to the dismissal of the state court collection failed because Plaintiff did not show that that the data Defendant furnished prior to the dismissal of the state court collection lawsuit was inaccurate or misleading and Plaintiff did not point to any facts that PRA could have uncovered that would establish an inaccuracy. The court also disposed of Plaintiff’s related state law claims.
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.
