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.
Split Ninth Circuit Says Optional Video Texts Do Not Trigger TCPA
For the purposes of the Telephone Consumer Protection Act, text messages are considered phone calls, courts have largely ruled. But what about a text message that contains a video? The Court of Appeals for the Ninth Circuit has affirmed a lower court’s ruling that texts with videos that require an individual to “affirmatively act” to choose to listen and watch the video are not subject to the statute. In a decision that will be closely watched by compliance teams and digital strategy leaders, the Ninth Circuit held that the TCPA’s restrictions on artificial or prerecorded voices apply only to how a call is made or initiated, not to optional content that a recipient chooses to engage with after the fact. More details here.
WHAT THIS MEANS, FROM DAVID GRASSI OF FROST ECHOLS: This case represents the latest example of technology rapidly outpacing regulatory attempts. The defendant, a political action committee, sent a text to the plaintiff which included a video that was automatically downloaded to his cell phone. However, the video did not automatically play and, instead, required the recipient to press play to view and listen to its contents. The plaintiff, relying on case law interpretation that a “text” is a “call,” filed a putative class action under the TCPA, contending the defendant placed a “call” using an artificial or prerecorded voice.
The Ninth Circuit conducted an extensive analysis and affirmed the dismissal for failing to state a claim. Specifically, the Court said there was no TCPA violation “[b]ecause the resulting ‘call’ was made and initiated without the playing of a prerecorded voice…” The Court noted the plaintiff alleged the video automatically downloaded to his phone but did not allege the video automatically played, and at oral argument plaintiff’s counsel conceded it did not automatically play. This is likely not the last we hear about this issue, as mass senders will try to stretch this opinion to cover other activities and consumer attorneys will argue such activities violate the TCPA.
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Judge Denies MTD From Furnisher, CRA in FCRA Suit Over Alleged Inaccurate Reporting
A District Court judge in Indiana has denied motions to dismiss filed by a creditor and a credit reporting agency in a Fair Credit Reporting Act case over how how a credit card debt was reported and what happened after the plaintiff disputed the debt. More details here.
WHAT THIS MEANS, FROM LORAINE LYONS OF MARTIN GOLDEN LYONS WATTS MORGAN: Although this is a fairly straightforward FCRA 12(b)(6) opinion, it cites Rylewicz and reaffirms a strict, no‑equitable‑tolling reading of the FCRA’s limitations period in the Seventh Circuit, cutting off claims tied to earlier disputes even for a pro se consumer. Rylewicz v. Beaton Servs. Ltd., 888 F.2d 1175, 1181 (7th Cir. 1989).
The decision also illustrates how a minimally detailed pro se complaint can survive dismissal when it identifies a specific account, billing cycle, and alleged inaccuracy. Notably, the court reads the furnisher’s post‑dispute correction as supporting an inference of underlying inaccuracy rather than treating it as a complete defense, observing that “if there was no inaccuracy, there would be no need for [the furnisher] to correct the payment,” and suggesting that a partial correction may not, by itself, eliminate FCRA exposure where alleged inaccuracies remain.
New Allegations Sink Jurisdiction Challenge in Autodialer Lawsuit
A District Court judge in Oklahoma has denied a renewed motion to dismiss in a Telephone Consumer Protection Act and privacy case after finding that newly added factual allegations were sufficient, at least at the pleading stage, to establish personal jurisdiction and venue, allowing the lawsuit to move forward. More details here.
WHAT THIS MEANS, FROM JAMES K. SCHULTZ OF SESSIONS, ISRAEL & SHARTLE: This is a case showing that judges are people too and not always consistent, as the court seemingly reversed course on itself. This is a case brought by a Florida resident against an Illinois corporation in Oklahoma because plaintiff allegedly received 1 call from defendant while in Oklahoma City. The court previously stated that the call was insufficient to establish personal jurisdiction over defendant, dismissed the case but gave plaintiff permission to file an amended complaint. That amended complaint with the same basic allegations was enough for the court to conclude the second time around that there was jurisdiction over the defendant. The case is a bit frustrating for defendants as it appears as if the court put the onus on a defendant to explain away personal jurisdiction, when as a matter of law, the burden is on plaintiff to show that defendant is subject to the court’s jurisdiction.
Idaho Supreme Court Rejects Challenge to Medical Debt Collection Rules
A state law in Idaho that requires medical providers give individuals adequate notice before handing an account off for collections is constitutional, the Idaho Supreme Court ruled yesterday in a case that started when a healthcare provider sued an individual for an unpaid medical debt. The decision affirms that the Idaho Patient Act can lawfully impose notice and waiting period requirements on medical creditors before they pursue lawsuits, report debts to credit bureaus, or take other extraordinary collection actions. More details here.
WHAT THIS MEANS, FROM LESLIE BENDER OF EVERSHEDS SUTHERLAND: This case involves a constitutional challenge to the Idaho Patient Act (IPA), arising from a medical debt collection action in which Ridgeline Medical, LLC, sued David Lyon for $777 in unpaid medical services, and Lyon counterclaimed that Ridgeline violated the IPA by failing to provide proper notice before filing suit. The Idaho Supreme Court affirmed the lower courts’ decisions upholding the constitutionality of the IPA against multiple constitutional challenges, including claims under the First, Eighth, and Fourteenth Amendments. The IPA requires healthcare creditors to take specific actions before engaging in “extraordinary collection actions,” which include reporting adverse patient information to consumer reporting agencies, pursuing legal action, or selling the debt to third parties. The Court’s analysis established critical precedent regarding the regulation of medical debt collection practices and the permissible scope of state legislation in this area.
The Court held that healthcare providers’ reporting of adverse debt information to credit bureaus constitutes commercial speech subject to intermediate scrutiny rather than strict scrutiny, rejecting Ridgeline’s argument that such communications involve matters of public concern. The Court concluded that the IPA satisfies all four prongs of intermediate scrutiny: the speech involves lawful activity, the state has a substantial interest in protecting patients from unfair debt collection practices, the regulations directly advance that interest by giving patients time to contest or pay debts before suffering credit damage, and the requirements constitute a reasonable fit for the state’s purpose. Additionally, the Court rejected Ridgeline’s right-to-petition claims, reasoning that because the IPA does not prevent healthcare creditors from filing lawsuits entirely but merely imposes procedural prerequisites, there is no unconstitutional infringement on access to courts. Finally, the Court upheld the IPA’s statutory penalty provisions under substantive due process, finding that damages of $3,000 or three times actual damages are not “obviously unreasonable” given the state’s interest in protecting patients from abusive collection practices.
Recommendations. Healthcare providers should consider implementing robust compliance protocols to ensure strict adherence to the IPA’s requirements before initiating any collection activities. This includes billing third-party payors within 45 days of service, ensuring patients receive final billing statements (and consolidated summaries of services where applicable), waiting at least 60 days after patient receipt before accruing interest or fees, and allowing 90 days to pass after receipt of the final statement while resolving all disputes and appeals before taking extraordinary collection action. Failure to comply can result in dismissal of collection lawsuits, inability to recover attorneys’ fees and costs, and exposure to statutory penalties. Healthcare organizations should also consider establishing clear escalation procedures before authorizing extraordinary collection actions. Given this decision, similar statutes in other jurisdictions may withstand constitutional challenges, making compliance a prudent strategy. Meanwhile, collection agencies collecting for Idaho healthcare providers should verify that patients have received IPA required notices before collections begin.
Court Dismisses FDCPA and FCRA Claims Over Debt Validation Dispute
A District Court judge in New York has granted a motion to dismiss a Fair Debt Collection Practices Act case against a credit union and collection law firm over claims that the defendants failed to properly validate a debt and continued collection activities without providing proper validation. More details here.
WHAT THIS MEANS, FROM RICK PERR OF KAUFMAN DOLOWICH: Collection agencies have a legal obligation to provide validation, if requested in writing, within 30 days after receipt of the Model Validation Notice by the consumer. Despite the plethora of information that has become commonly requested by consumers, such as documentary proof the obligation is owed, copies of signed documents, copies of the agreement assigning collection to the collection agency, by law the only legal obligation a collection agency has is to affirmatively state after a reasonable and cursory investigation that the person being dunned is the correct person and that the amount being claim owed is the correct amount. Nothing more is owed. Any other documentation provided is at the discretion of the collection agency.
In this case, the consumer received a proper 1692g response and was permitted to continue collection activity. The court correctly concluded that the consumer failed to state a claim and dismissed the complaint.
Under Protest, Vought Requests $145M in Funding To Keep Lights On at CFPB
After insisting for months that the Consumer Financial Protection Bureau should be allowed to run out of money, Acting Director Russell Vought has now formally asked the Federal Reserve for $145 million to keep the agency operating through the end of March, but explicitly stating that he disagrees with the court order that forced him to do so. The funding request, sent Friday, comes just days after a federal judge rejected the administration’s legal theory that the CFPB could be defunded because the Federal Reserve lacked “combined earnings.” While the request keeps the Bureau alive for now, it underscores how precarious the agency’s future remains as litigation continues and leadership openly signals its desire to shut the CFPB down. More details here.
WHAT THIS MEANS, FROM STEFANIE JACKMAN OF TROUTMAN PEPPER LOCKE: This situation highlights the ongoing instability of the CFPB’s mission and operations, which have become entirely politicized and dependent on whoever controls the White House. Absent congressional action to change the underlying statute, any future administration can simply reverse course and restore normal funding operations. We already witnessed this “whipsaw” effect when President Biden took office in 2021, and there is every reason to anticipate a similar reversal following the 2028 election if control of the White House changes hands. Vought’s compliance-under-protest approach appears designed to preserve appellate arguments while avoiding contempt, but it means the Bureau’s immediate future depends entirely on ongoing judicial intervention rather than any durable political resolution. This continued uncertainty undermines the predictability that both industry and consumers need from their regulatory framework.
Ninth Circuit Clarifies Standing Burden in FCRA Class Actions
The Court of Appeals for the Ninth Circuit has partially remanded a Fair Credit Reporting Act case back to the District Court, ruling that class members can use direct or circumstantial evidence to demonstrate standing and did not show that a jury would find in their favor at the summary judgment stage of the proceedings. In doing so, the Ninth Circuit clarified how standing must be evaluated in certified class actions seeking money damages under the FCRA and corrected what it viewed as an overly demanding application of the summary judgment standard by the lower court. More details here.
WHAT THIS MEANS, FROM JOHN CULHANE OF BALLARD SPAHR: The law of standing for FCRA class actions seeking monetary damages continues to develop. At the start, for class certification, the named class members must demonstrate standing. At the end, for an award, the named and unnamed class members must demonstrate standing. But what about successive stages of the litigation? In an inaccuracy case involving allegedly mismatched medical records and improper risk flags in reports provided to insurers, Healy v. Millman, Inc., a unanimous Ninth Circuit panel has now ruled that standing for the unnamed class members must be shown at the summary judgment stage. While that does not require direct evidence of damages, it does require enough circumstantial evidence that a jury could reasonably infer that the reports included misattributed health records.
Judge Grants Summary Judgment for Debt Buyer in FDCPA Dispute
In a case that was defended by David Schultz at Hinshaw & Culbertson, a District Court judge in Missouri has granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act case over alleged issues with the chain of title and validation of a debt that was purchased by a debt buyer. More details here.
WHAT THIS MEANS, FROM MITCH WILLIAMSON OF BARRON & NEWBURGER: On the face of it this is not an unusual case – which is a problem. Its not unusual because it represents a typical case brought by a pro se as opposed to an attorney. The pro se debtor repeatedly asked for validation and each time he got everything imaginable for what was a fintech online loan. What he didn’t get, and kept demanding, was a “wet signature” which as noted in the Court’s decision was impossible since the transaction was done on line with electronic signatures. Assumedly, if it was an attorney on the other side, either the case wouldn’t have been brought or complaints alleging frivolous litigation could be brought. But its hard to allege a pro se should have a better understanding of the law.
It is my expectation that we will start seeing more of these pro se complaints, actually we already have, and they will be maddening since we will be dealing with Plaintiffs who simply don’t understand and are copying causes of action from the internet and ChatGPT etc.
Welcome to the Year of Frustration.
Judge Dismisses FDCPA Claim Tied to Post-Bankruptcy Collection Letter
A District Court judge in Kansas has granted a defendant’s motion to dismiss claims it violated the Fair Debt Collection Practices Act when it sent a communication to the plaintiff to collect on an unpaid auto loan debt after the plaintiff had filed for bankruptcy protection, ruling the communication did not violate the FDCPA because the notification about the bankruptcy filing that was sent to the defendant wasn’t sent by the plaintiff. More details here.
WHAT THIS MEANS, FROM MICHAEL PONCIN OF BASSFORD REMELE: In this case, the consumer filed for bankruptcy in June 2024, listing the creditor. The bankruptcy court immediately sent notice of the bankruptcy to the creditor. Nearly a year later, the debt collector contacted the consumer seeking payment of the debt. While the consumer alleged a violation of the FDCPA, section 1692c(c), the court rejected the claim because the alleged cease communication, the notice from the bankruptcy court, was not notice from the consumer, as required by the plain language of the FDCPA. This case presents an example where the plain language, and common sense, carried the day. That, and the refusal of a collector to pay on a baseless claim.
Judge Denies MTD From Furnisher, CRA in FCRA Suit Over Alleged Inaccurate Reporting
A District Court judge in Indiana has denied motions to dismiss filed by a creditor and a credit reporting agency in a Fair Credit Reporting Act case over how how a credit card debt was reported and what happened after the plaintiff disputed the debt. More details here.
WHAT THIS MEANS, FROM LORI QUINN OF MESSER STRICKLER BURNETTE: Multiple motions were filed related to Plaintiff’s FCRA claims related to his Capital One account. Plaintiff claimed that Capital One and Equifax harmed his credit score causing emotional and financial damage by inaccurately reporting a past due payment. The Court denied both Capital One and Equifax’s motions to dismiss finding Plaintiff’s dispute to Equifax was timely and adequately alleged inaccuracies and FCRA violations.
What we learn from this decision is that FCRA pleading standards for pro se plaintiff’s are met if they are clear in identifying the account, specific inaccurate item, and why it is inaccurate and resulting harm.
FCC to Congress: Robocalls Remain a Top Enforcement Priority as AI, Spoofing, and Caller ID Abuse Evolve
The Federal Communications Commission says illegal robocalls and caller ID spoofing remain a persistent threat to consumers and legitimate businesses, even as complaint volumes fluctuate and enforcement tools expand. In a report submitted to Congress in late December, the FCC detailed five years of consumer complaint data, outlined its 2024 enforcement actions, and highlighted new regulatory initiatives aimed at AI-generated calls, caller ID authentication, and VoIP provider accountability, signaling continued scrutiny for any organization that originates, routes, or relies on voice communications. More details here.
FCC Cracks Down on Robocall Database Errors With New Fines and Annual Certifications
The Federal Communications Commission is raising the compliance stakes for telecommunications providers that fail to keep accurate information in the Robocall Mitigation Database, a system relied upon by carriers, regulators, and law enforcement to identify and block illegal robocall traffic. Under new rules taking effect February 5, telecoms will face meaningful financial penalties for false, inaccurate, or outdated filings, a move the agency says is aimed at strengthening the integrity of the nation’s call authentication framework and closing enforcement gaps that bad actors have exploited. More details here.
WHAT THIS MEANS, FROM MARTY STERN OF WOMBLE BOND DICKINSON: A key issue to keep in mind is that the RMD obligations don’t apply just to carriers, but to voice service providers, which is a term very broadly defined in the Commission’s rules and sweeps in platform and CRM service providers that offer voice solutions for their clients. These are folks, for example, who are offering IP-based voice calling capabilities, typically as an adjunct to CRM solutions. So the FCC’s action to impose significant enforcement penalties for erroneous RMD information, as well as for delays in updating information, seriously raises the compliance stakes for this sector of the industry, and may come as a wake-up call for firms that have not historically been subject to FCC regulation and enforcement activity.
Of course, these are not the bad robocall actors that the FCC is targeting. Perhaps these stepped-up penalties will have some deterrent effect on illegal robocallers who are relying on spoofed RMD certifications to get their calls originated. On the other hand, and not to be too much of a skeptic here, the issue with illegal robocalling has always been in identifying the truly bad actors (as opposed to legitimate businesses communicating with their customers and prospects, targeted by aggressive class action plaintiffs), and $500 to $1500 per call TCPA class action exposure really hasn’t done the trick there. So I’m not sure why upping FCC enforcement penalties on RMD certifications would have a meaningful impact. This is in contrast, by the way, to vigorous “Know Your Customer” enforcement on carriers (which apropos to the Telnyx enforcement action, hasn’t been without controversy), as well as aggressive traceback and blocking actions.
Judge Rejects Broad Dismissal in FDCPA Suit Tied to Prior State Court Judgment
A District Court judge in Minnesota has largely denied a motion to dismiss filed by defendants in a Fair Debt Collection Practices Act case involving a pro se plaintiff who invoked a number of soveriegn citizen claims, allowing most of the lawsuit to move forward while rejecting an attempt to use jurisdictional and procedural doctrines to end the case at the pleading stage. More details here.
WHAT THIS MEANS, FROM COLIN WINKLER OF HINSHAW CULBERTSON: The partial dismissal order issued in this case reminds us that whenever a debt collector has taken judgment against a consumer in state court and the consumer later files a federal complaint challenging that judgment, the debt collector should almost always raise the Rooker-Feldman defense in an effort to knock out any of the consumer’s claims that substantively attack the state court decision or seek to undo it. This defense requires a juxtaposition of the claims and issues at the core of the two cases, and although it may not dispatch the consumer’s claims completely, it often succeeds, as it did here, in limiting the live claims and simplifying the overall defense.
In addition, this decision shows how a Rooker-Feldman argument can pair favorably with an assertion of res judicata—specifically, the bar of “claim preclusion.” Like a Rooker-Feldman defense, this judicial canon requires a nuanced analysis, but it’s a potentially dispositive argument that’s worth invoking, as it offers judges a quick exit ramp where a consumer’s suit engenders duplicative or redundant litigation. See., e.g., Reiger v. St. Charles Health Sys., No. 6:24-cv-00334-MC, 2025 LX 150536, at *36 (D. Or. June 13, 2025) (dismissing a consumer’s claims in a federal action where the consumer could have brought the same claims defensively against the debt collector in an earlier state-court collection action that had yielded a default judgment against the consumer).
Note that a claim preclusion analysis can be subject to greater judicial discretion than Rooker-Feldman determinations, and it can mutate between cases because it requires federal courts to apply state preclusion rules. Accordingly, when making a claim preclusion argument, it’s criticalto draw clear, straight lines for the court between the facts and claims at issue in the current case and those in the prior case and to sketch out relevant state law with precision. You may also have to tease out questions about privity between the prior defendant and current defendant. Even if you merely end up setting the table for a possible claim-preclusion dismissal later, as may be the case here in Blanc, it’s worth advancing this powerful jurisprudential doctrine early, as it can obviate the need for a court to (re)adjudicate a consumer’s complaints on the merits.
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.
