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.
Appeals Court Says BK Stay Lapsed When Debtor Neither Reaffirmed Nor Redeemed in Time
The Court of Appeals for the Fifth Circuit has affirmed that a Chapter 7 debtor lost the automatic stay protecting her vehicle, and any chance to redeem it, after she did not reaffirm or redeem the debt within the window the Bankruptcy Code allows. More details here.
WHAT THIS MEANS, FROM CHUCK DODGE OF HUDSON COOK: The Fifth Circuit made short work of the debtor’s arguments on appeal in this case, for good reason. The debtor had a chance to file a reaffirmation agreement, and then an extended opportunity to comply with the bankruptcy redemption rules. The court correctly held that the automatic stay terminated, based on the creditor’s motion, when the parties did not file a reaffirmation agreement and the debtor did not make the redemption payment before the deadline. Who knows if the debtor was just trying to string the case out and keep the car? Ultimately, that did not matter because the Fifth Circuit did not need to trouble itself with the procedural issues the debtor raised on appeal. The court correctly concluded that because the debtor missed the reaffirmation and redemption deadlines, the automatic stay terminated as a matter of law. The deadlines are there to ensure an orderly and timely administration of the bankruptcy estate – so this decision should be the final say on the debtor’s claims.
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Judge Strikes Down State Law Barring Medical Debt From Credit Reports
A District Court judge in Texas has ruled that a state law barring consumer reporting agencies from listing certain out-of-network medical debts on credit reports is preempted by the Fair Credit Reporting Act. More details here.
WHAT THIS MEANS, FROM COOPER WALKER OF FROST ECHOLS: In an important ruling for the industry, a federal court judge in Texas has found that the State of Texas cannot implement a law that puts more limitations on what can be credit reported than federal law has already put in place. Specifically, the Court held that “[it] finds that the best interpretation of § 1681c and § 1682b is that Congress intended to preempt States from passing legislation more protective of consumers in relation to adverse information on their consumer reports . . . Congress determined that the cost of State-by-State restrictions on what adverse information could be reported would be detrimental to the ‘national uniform system.’ See 149 Cong. Rec. H12217 (Nov. 21, 2003).” Consumer Data Industry Association v. Texas, No. 1:19-cv-00876, 2026 WL 2322668, at *10 (W.D. Tex. Aug. 10, 2026).
While this is a well-reasoned opinion, I believe there is a decent chance this ruling may be taken up on appeal as a similar issue was brought before the First Circuit a few years ago with a different result.
CFPB to Stop Publishing Consumer Complaint Narratives in Public Database
The Consumer Financial Protection Bureau said Friday it will stop publishing consumer complaint narratives and related data visualizations in its public Consumer Complaint Database, reversing a transparency policy in place since 2015. More details here.
WHAT THIS MEANS, FROM JOHN CULHANE OF BALLARD SPAHR: The decision is particularly noteworthy because the CFPB’s Consumer Complaint Database has long been one of the Bureau’s most visible sources of publicly available information. The database has been used by consumers, journalists, researchers, consumer advocates, regulators, and financial institutions to identify and analyze complaints involving financial products and services.
The CFPB is now concluding that the benefits of publishing individual narratives do not outweigh the problems inherent in making unverified, one-sided allegations publicly available
Appeals Court Affirms Dismissal of FDCPA, FCRA Suit Against Auto Lender
The Court of Appeals for the Third Circuit has affirmed the dismissal of a consumer’s lawsuit accusing an auto lender of violating the Fair Debt Collection Practices Act and the Fair Credit Reporting Act, after finding the plaintiff’s appeal came too late to reach the order that dismissed his claims. More details here.
WHAT THIS MEANS, FROM JESSICA KLANDER OF BASSFORD REMELE: This case supports the argument that the FDCPA does not apply when a creditor or servicer begins handling an account before default. Later collection efforts do not necessarily make it a “debt collector.” What matters is its role and the account’s status when acquired or placed for servicing. Because the defendant stepped into the role of loan servicer via a third-party contract right at the beginning—long before any missed payments—they were legally classified as a loan servicer/creditor rather than a debt collector. The underlying dismissal remains intact, although the Third Circuit did not reach the merits because the pro se party’s appeal of that dismissal was untimely. The takeaway is clear: documenting when and how an account was acquired or placed for servicing may be determinative as to whether the FDCPA applies.
FTC Puts Businesses on Notice Over Personalized Pricing, Opens Comment Period
The Federal Trade Commission yesterday issued a proposed enforcement policy statement on personalized pricing and opened it for public comment, warning that businesses using consumers’ personal data to set individualized prices could face enforcement under Section 5 of the FTC Act if they fail to disclose the practice. More details here.
WHAT THIS MEANS, FROM HEATH MORGAN OF MARTIN GOLDEN LYONS WATTS MORGAN: The FTC’s Proposed Enforcement Policy Statement on Personalized Pricing targets businesses that use consumer data to set individualized prices without disclosure. While this statement is aimed primarily at retail and e-commerce, it’s broad framing applies to “any other commercial conduct,” which means debt collection practices are not excluded.
Collection agencies, creditors, and law firms that use consumer data, analytics, or propensity-to-pay models to calibrate settlement offers, payment terms, or collection demands on a consumer-by-consumer basis could face scrutiny under this framework, particularly where they exploit consumer vulnerability, fail to disclose the data-driven basis of individualized offers, or use third-party data collected without adequate consumer consent.
While this is a proposed rule, there are several action items ARM companies can take:
- Audit any settlement offer algorithms and propensity models for whether they constitute “personalized pricing” under this framework
- Review collection communications for language that implies uniform or standard settlement offers when they are actually data-driven and individualized.
- Evaluate data sourcing and consent for any third-party data used to calibrate collection terms.
- If companies have any areas that may be affected by this rule, submit comments directly to the FTC.
- Finally, companies should consider proactive disclosure language in settlement communications that identifies when offers are based on individualized consumer data.
The comment period provides the industry an opportunity to weigh in on how debt collection should be treated differently from retail pricing.
Judge Rules on Competing Summary Judgment Motions in FDCPA Case
A District Court judge in Washington has granted partial summary judgment to a plaintiff on his Fair Debt Collection Practices Act claims, ruling that a debt collector’s letters claiming to enclose “validation” of a debt were misleading and unfair when the collector knew the original creditor had never provided proof the debt existed. More details here.
WHAT THIS MEANS, FROM ANDREW SCHWARTZ OF MESSER STRICKLER BURNETTE: Plaintiff was alleged to have owed a balance on a residential lease. Defendant furnished a derogatory tradeline on Plaintiff’s credit report. In the course of validating the dispute, Defendant issued two validation letters stating that the lessor provided proof of the debt. Unfortunately, the Defendant’s account history indicated that the lessor did not provide proof. Defendant later conceded that the lessor was unable to provide proof of the debt (to the Department of Licensing). In a last ditch attempt, the Defendant introduced the ledger and move-out statements without “proper foundation” rendering these records inadmissible hearsay. In granting Plaintiff’s partial summary judgment, the Court found that Defendant’s conduct violated Sections 1692e and 1692f. Of note, the Court denied Defendant’s motion as to the claim of outrage finding that a reasonable jury could find the Defendant’s conduct was so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.
Washington AG Releases First Data Privacy Report
Washington Attorney General Nick Brown released the state’s first Data Privacy Report last week, urging lawmakers to establish baseline privacy protections and warning that residents have little control over how their personal information is collected, retained, and sold. More details here.
WHAT THIS MEANS, FROM KIM PHAN OF TROUTMAN PEPPER LOCKE; On August 14, 2026, Washington State Attorney General Nick Brown released the first-ever Washington State Attorney General’s Data Privacy Report. The report identifies four recurring concerns in the modern data economy: (1) over-collection and secondary use of personal information; (2) weak consent requirements and deceptive design; (3) the collection and sale of sensitive data; and (4) a lack of transparency in the data-broker industry. To address these concerns, the report recommends action in the following areas: strengthening baseline protections for personal data, bolstering privacy enforcement and institutional capacity, and raising the baseline of digital literacy in Washington.
Judge Denies Motions to Dismiss FDCPA, Bankruptcy Stay Claims
A District Court judge in Pennsylvania has denied motions to dismiss a consumer’s lawsuit accusing a university and its in-house attorney of violating the Fair Debt Collection Practices Act and other consumer protection statutes while trying to collect an unpaid tuition balance. More details here.
WHAT THIS MEANS, FROM COLIN WINKLER: In 1841, Ralph Waldo Emerson wrote about 4,500 words on the virtue of prudence. Cases like one this remind us of that principle and, as Emerson suggested, that not every action which may be putatively lawful or technically possible should be regarded as right, let alone wise. One need only read the six short paragraphs of the factual background in this opinion on Drexel University’s motion to dismiss to see the court shine a harsh light on the imprudent actions Drexel undertook throughout its interaction with its former student.
Even if much of what Drexel did may not have violated any black-letter statutory prohibitions — and there’s a lot to digest in that regard here — it adds up to an invitation for this lawsuit. Put it all in front of a judge with a progressive bent and an education background, and the denial of this 12(b)(6) motion feels almost assured. Now, Drexel faces an imminent discovery deadline and will have its next shot to dispose of the consumer’s claims at summary judgment — but not before incurring additional expense and headache, all of which might have been avoided with a bit of prudence.
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.
