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.
N.Y. State Court Aligns with Federal Standing Requirement in FCRA Dismissal
A State Court judge in New York has, possibly for the first time, ruled that plaintiffs need to have suffered a concrete injury in order to pursue Fair Credit Reporting Act claims in state court, granting a defendant’s motion to dismiss. The decision represents a notable development, particularly as plaintiffs have increasingly attempted to bring FCRA claims in state courts to avoid the stricter standing requirements imposed in federal courts. More details here.
WHAT THIS MEANS, FROM CRYSTAL DUPLAY OF FROST ECHOLS: This case has reinforced the importance of demonstrating a concrete injury to establish standing under the Fair Credit Reporting Act (FCRA), even in state courts. Whaley alleged that after she defaulted on her Comenity Bank account in 2019, Midland Credit began collection efforts. She continued on to claim that information provided to Experian was inaccurate or improperly handled under the FCRA. Midland Credit moved for dismissal arguing that the complaint should be dismissed because plaintiff has failed to allege that she suffered an injury-in-fact. the plaintiff acknowledged that the absence of a concrete injury would preclude the claim from proceeding in federal court under Article III of the U.S. Constitution. The complaint did not allege that the disputed credit information was disclosed to any third party, nor did it include details regarding payments made or demonstrate how the alleged inaccuracies impacted the plaintiff’s credit score or ability to obtain credit. This is one of the first cases in which a state court has required an injury in fact for standing in a state court FCRA claim. The ruling signals a potential shift toward closer alignment with federal standing requirements and provides a valuable defense consideration for creditors and servicers facing similar claims.
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FCC Advances Dual Crackdown on Robocalls and Offshore Call Centers
The Federal Communications Commission is advancing a regulatory push that targets both illegal robocalls and the growing reliance on offshore call centers, signaling potential operational changes for companies across the credit and collection industry. At a meeting last Thursday, the FCC unanimously approved Notices of Proposed Rulemaking that tackle two key areas. First, it aims to make it harder for bad actors to obtain and use phone numbers. Second, it proposes new restrictions and requirements tied to foreign call center operations. More details here.
WHAT THIS MEANS, FROM BRIT SUTTELL OF BARRON & NEWBURGER: The FCC’s latest proposals signal a more aggressive stance on closing loopholes that enable illegal robocalls, particularly by tightening controls over phone number access and usage. At the same time, the focus on offshore call centers reflects growing concern about jurisdictional gaps that can shield bad actors from enforcement. If adopted, these rules could increase compliance burdens for legitimate credit and collection firms that rely on third-party or international calling operations. While companies should already be evaluating vendor oversight, call authentication practices, and number provisioning processes to stay ahead of potential changes, these proposed changes would certainly raise the stakes.
Given the breadth of the proposed regulations, I would encourage companies to reach out to their industry trade associations regarding comments to the FCC. Companies should also be aware that this problem is not likely to go away as there is a continued uptick in TCPA litigation, with more and more in the credit and collection industry being targeted by private litigants.
CFPB Complaint Volume Doubles Again, Credit Reporting Still in Spotlight
The Consumer Financial Protection Bureau this week released its latest Consumer Response Annual Report, and the numbers are hard to ignore: complaint volume has surged past 6.6 million in 2025, continuing a multi-year trend of rapid growth. While the topline figure is eye-catching, what sits beneath it, especially the role of credit reporting, credit repair activity, and how companies are responding, may matter far more for professionals in credit and collections. More details here.
WHAT THIS MEANS, FROM BROOKE CONKLE OF TROUTMAN PEPPER LOCKE: The sharp rise in CFPB complaints highlights not only increasing consumer concern about credit reporting, but also the reality that this growth is fueled by AI-generated or mass-produced complaints rather than truly individualized disputes. As AI tools make it easier for consumers and third parties to quickly create detailed, “legal-sounding” complaint narratives, it becomes harder for furnishers to distinguish between legitimate, fact-driven issues and generic, copy‑and‑paste submissions. This puts real pressure on furnishers’ operations and compliance teams, who must sort through higher complaint volumes and still investigate and respond within tight deadlines, all the while managing issues of regulatory scrutiny and litigation.
Mixed File FCRA Allegations Survive MTD
A District Court judge in Virginia has denied a motion to dismiss filed by defendants in a Fair Credit Reporting Act case over a mixed credit file, ruling the plaintiff has standing and that reliance on the information provided by the credit reporting agencies is not a defense at this stage of the proceedings. More details here.
WHAT THIS MEANS, FROM DAVID SCHULTZ OF HINSHAW CULBERTSON: The facts in Gomez v 700 Credit were not that unusual. Plaintiff’s credit report had errors because it improperly had negative information mixed in from other people. Three things struck me about the opinion. First, it is an FCRA case against a credit report reseller. I don’t come across these too often in my practice. The cases are usually against a credit reporting agency, furnisher, or prospective employer.
Second, defendant argued that it cannot be liable because it was a reasonable procedure to rely on Experian’s reports. Interesting approach and the argument was not rejected. The court held it could not make that ruling at the R 12 stage. It may work on summary judgment
Third, was why the defendant moved to dismiss when the arguments seemed like a stretch at this early stage. For instance, defendant also argued that plaintiff lacked standing because the injuries were self-inflicted; plaintiff kept applying for credit knowing that the credit report had errors. The court denied the motion because of the liberal R 12 standards. It was a hard motion and defendant perhaps knew that. However, the motion did not hurt the defense but it put the court and plaintiff on notice early that there are strong defenses and some bad facts for the plaintiff. This can be an effective strategy.
Reinvestigation Standards Hold Up: Judge Grants MSJ For Defendant in Lease Dispute Case
A District Court judge in Indiana has granted a defendant’s motion for summary judgment in a Fair Credit Reporting Act case over a series of disputes filed by the plaintiff over the rental of an apartment that the plaintiff never moved into. The case centers on how a consumer reporting agency handled multiple disputes tied to a $5,318 collection account stemming from a lease that never resulted in occupancy. At its core, the dispute raised a familiar but nuanced question for the industry: when a consumer provides substantial documentation, including a favorable court order, what level of reinvestigation is required under the FCRA? More details here.
WHAT THIS MEANS, FROM BRENDAN LITTLE OF LIPPES MATHIAS: Plaintiff sent a total of four disputes to Equifax concerning a balance on a lease purportedly owed to the creditor. While the second and third disputes provided specific documentation including the lease at issue, the fourth dispute included a state court order granting Plaintiff’s application for a declaratory judgment determining that she did not owe the debt. On each occasion, the furnisher responded to Equifax verifying the data it had furnished. A couple of months after the fourth dispute, the furnisher, on its own, requested that the data concerning Plaintiff’s account be deleted. The parties filed dueling summary judgment motions concerning Plaintiff’s claims pursuant to the FCRA. As for the first three disputes, the district court found that Equifax was no obligated to interpret the lease at issue and given the ongoing state court dispute related to whether plaintiff owed any money pursuant to the lease, plaintiff failed to show that there was any inaccuracy with respect to the tradeline. As for the fourth dispute that included a copy of the state court judgment, Equifax argued that Plaintiff had not suffered any harm and the Court need not review whether Equifax’s reinvestigation was reasonable. The Court agreed finding that while plaintiff supplied deposition testimony and treatment records, that evidence did not corroborate that the fourth dispute with Equifax caused her to feel stressed, anxious, and distracted. Accordingly, Equifax was granted summary judgment and Plaintiff’s entire claim was dismissed.
Colorado Medical Debt Collection Bill Defeated in Committee Vote
A Colorado medical debt collection bill that would have significantly restricted how providers and agencies pursue unpaid balances has been defeated in committee, according to a published report, marking another notable win for hospitals and a pause in the state’s push to further regulate collections. The proposal, House Bill 1267, failed on an 8-to-5 vote in the House Health and Human Services Committee, with bipartisan opposition driven largely by concerns over the financial stability of healthcare providers, particularly in rural communities. More details here.
WHAT THIS MEANS, FROM MAKYLA MOODY OF GREENBERG & MOODY: After over six hours and 90 witnesses testifying, the proposed legislation restricting nearly all judicial remedies for medical debts collections in Colorado (HB26-1267) died in its first committee hearing. While this Bill has been in the works since May of 2025, the proponents and Sponsors, Javier Mabrey (D) and Junie Joseph (D), sought to stymie the opposition by avoiding engaging with the industry until just a few days before the Bill’s introduction in mid-February 2026. The Sponsors’ disdain for the industry was palpable throughout the legislative process and was even reflected in several of the remarks that were made during the committee hearing. While the local collections industry did their part, the day was ultimately carried by the invaluable and irreplaceable engagement of the service providers, particularly the rural hospitals and smaller providers- for which the local industry will be forever grateful.
In this fight we learned that legislators were unmoved by the fact that the Bill sought to unwind nearly every legislative compromise the industry has secured over the last decade, including some negotiated with these same Sponsors. This lack of concern illustrates a few key points and highlights the need for more engagement and aggressive involvement from the national trade associations. If the industry wants to survive in states like Colorado, they’ve got to do more than just collect. They’ve got to improve their relationships with legislators, educate their clientele, and build coalitions with other industries, which requires education, outreach, time, and money. Second, the national trade associations need to wake up to the fact that these aren’t grassroots fights, these Bills are pieces in a much larger national agenda being propagated by national consumer advocacy groups. If the industry is going to have any chance of surviving this fight, the national trade associations need to redirect their focus and stop allowing individual states to be picked off one by one, like they did with the prohibition on medical debt credit reporting. It is incumbent upon the national trade associations to make better investments with their time and resources and jump into the fray at the local levels. This includes deploying their resources to produce counter-media campaigns, harvest and republish research and statistic from the wealth of sources that already exist, and get more hands-on with helping to coordinate and facilitate cross-industry coalition building- not just paying lip service to the ideas as they have been doing the last several years.
Colorado may be relieved to see HB26-1267 in the rearview mirror of this session, but the relief will be short lived as the Sponsors have already signaled that they’ll be back next year with another Bill targeted at eliminating wage garnishment in the Centennial State. We’ve got approximately eight months before that happens, so both the local folks and national trade associates better get to work now if they want to see success next year.
Utah Court Says Lease-Related Charges Can Qualify as FDCPA Debt
A District Court judge in Utah has denied a motion to dismiss a Fair Debt Collection Practices Act suit, disagreeing with the defendant’s argument that the debt was not subject to the statute. More details here.
WHAT THIS MEANS, FROM CAREN ENLOE OF SMITH DEBNAM: The court’s ruling in Yocum goes to the heart of what obligations are covered by the FDCPA. As we all know, a “debt” includes “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes.” Consistent with that, the court looked to the origin of the debt – a residential lease – and determined, for purposes of a motion to dismiss, the complaint had plausibly alleged that the transaction at issue (repairs to the premises) was a byproduct of the lease and therefore, a debt covered by the FDCPA. Quick practice reminders from the opinion? There are two. First, the origin of the debt is important. And second, how the debt is cast by the plaintiff who is the master of their complaint, matters. Here, because the plaintiff cast the underlying debt as arising from the lease’s provision for repairs in excess or ordinary wear and tear, the debt was cast as a consumer debt arising from the residential lease.
Five-Day Delinquency Dispute and Account Date Reporting Fall Short for Plaintiff in FCRA Ruling
A District Court judge in Illinois has granted a defendant’s motion for summary judgment in a Fair Credit Reporting Act case that accused it of reporting inaccurate information, such as the date of first delinquency, to the credit reporting agencies. More details here.
WHAT THIS MEANS, FROM KHARI GRIFFIN OF CLARK HILL: In its recent FCRA ruling, the District Court for the Northern District of Illinois threw a bone to debt buyers in the defense of reporting inaccuracy claims. In particular, the District Court granted Defendant debt buyer’s motion for summary judgment as to claims of inaccuracy regarding the ‘reported account opening date’ and the ‘date of first delinquency.’ The Court emphasized that credit reports must be viewed in their entirety. Here, the credit report clearly identified the original creditor, the collection status, and the nature of the account as one held by a debt buyer. Therefore, “no reasonable jury” could have misunderstood the ‘reported opening date’ as referring to the original account rather than the date Defendant acquired the debt. Regarding the date of first delinquency, the Court held the difference between September 29 (first missed payment) and October 4 (reported delinquency date) was not material enough to be “materially misleading”. Like the Court reiterated,– “mere imprecision is not enough.” This notion may be critical in defense on FCRA reporting claims.
Judge Dismisses FDCPA Claims Against Auto Lenders, Flags AI ‘Hallucinated’ Case Citations
A District Court judge in Massachusetts has granted a motion to dismiss claims that a pair of auto lenders violated the Fair Debt Collection Practices Act, while also calling out the plaintiffs for citing nonexistent cases in what may be a case of hallucinating artificial intelligence. The decision offers a clear reminder for companies across credit and collections that creditor status still matters under the FDCPA, while also highlighting a growing issue courts are beginning to confront: unreliable AI-generated legal filings. More details here.
WHAT THIS MEANS, FROM MICHAEL PONCIN OF BASSFORD REMELE: If you have litigated against a pro se consumer in the past year, you may have noticed two recurring trends: (1) arguments that significantly misstate the law, often based on advice from social media “experts,” and (2) reliance on AI‑generated, nonexistent case law. This case illustrates both problems. First, the consumers asserted FDCPA claims against the original creditor, which the court promptly dismissed. Second, in opposing the defendant’s motion to dismiss, the consumers cited nonexistent case law. As a result, the court reprimanded the consumers and ordered that future filings include a certification confirming that no “hallucinated” citations are used. This decision serves as an important reminder to closely review filings for AI‑generated legal arguments and case citations.
Standing Survives: Judge Finds Emotional Distress Allegations Sufficient in FDCPA Letter Case
A District Court judge in Texas has adopted a recommendation from a Magistrate Court judge to deny a defendant’s motion to dismiss allegations it violated the Fair Debt Collection Practices Act and ruled that a plaintiff has standing to sue after alleging receipt of a letter that did not indicate the statute of limitations had expired caused her to suffer “emotional distress, anxiety, fear, embarrassment, and mental anguish”. More details here.
WHAT THIS MEANS, FROM BRENT YARBOROUGH OF MAURICE WUTSCHER: Over the past few years, standing motions have become a routine part of FDCPA cases filed in, or removed to, federal court. This magistrate report and recommendation addressed a facial attack on standing, which tests whether the plaintiff has asserted factual allegations necessary to establish Article III standing. The court ultimately found that the plaintiff alleged a concrete injury sufficient to establish standing, but it appears that the defendant might later make a factual attack on standing. That is, after developing a factual record in discovery, the defendant might be able to show that the plaintiff did not suffer the damages she alleged in her complaint or it might be able to show that any damages were not caused the defendant’s letter. Alternatively, the defendant might simply move for summary judgment on the grounds that the letter did not violate the FDCPA.
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.
