The New York State Department of Financial Services announced recently revised debt collection regulations, culminating more than a year of proposals and comments. While the new regulations provide clarity and consumer protection in some areas, they are fraught with ambiguities and overlap existing laws in several key aspects. Attorney John Rossman and Mike Poncin examine some of the more salient difficulties with the revised New York debt regulations in the current episode of the Debt Collection Drill.

The Third Circuit Court of Appeals ruled recently in Douglass v. Convergent that a collector’s envelope, which disclosed a collection agency account number through the window in the envelope, raised privacy concerns and violated the FDCPA. The Court in Douglass held that the collection agency account number-visible through the window on the envelope presumably for return mail sorting purposes was a piece of information capable of identifying Douglass as a debtor. In analyzing the claim in Douglass, the Court examined the FDCPA, and specifically Section 1692f(8) which prohibits:

Using any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.

Since the Douglass ruling, filings of similar cases against debt collectors have been brisk, especially in Pennsylvania and New York. In the latest episode of the Debt Collection Drill, attorneys John Rossman and Mike Poncin discuss the Douglass decision and some specific legal theories upon which debt collectors may defend similar claims.

The enactment of the FDCPA in 1977 began long-standing debate regarding what information a debt collector must produce to a consumer in response to a request for validation.  The FDCPA itself is vague, stating that after receiving a request for validation, “the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt . . .”  Nowhere in the FDCPA is the term “verification” defined.  The legislative history of the FDCPA, however, provides some guidance where it states: 

This provision will eliminate the recurring problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid.

A recent Sixth Circuit Court of Appeals Case, Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC, examined the issue of what constitutes adequate verification in the context of multiple requests for validation by the consumer focused on a specific portion of a debt.  While it has been argued that the Haddad case requires a debt collector to provide itemized statements whenever any request for validation is received, this interpretation is not borne out by a careful reading of the case and other applicable precedent. 

Attorney John Rossman and Mike Poncin examine the practical implications of Haddad and provide specific information necessary for debt collectors to respond to requests for validation in the latest episode of The Debt Collection Drill podcast.

Numerous recent FDCPA lawsuits challenge the ability of debt collectors to assess interest to accounts. These cases focus on a number of factors including whether collection letters need to disclose the accrual of interest and also interest on purchased accounts. Most recently, a California Court held that interest could only be assessed in certain circumstances after a judgment had been entered.

In this recent episode of the Debt Collection Drill podcast, Attorneys John Rossman and Mike Poncin tackle the intricate issues involved with collection agencies assessing interest and provide an assessment of strategies to comply with the law.

The CFPB recently began a more aggressive approach to the debt industry, bypassing the larger market participant examination process and issuing Civil Investigative Demands (CIDs) to a number of debt collectors directed at specific complaints and alleged practices. In a special episode of the Debt Collection Drill, John Rossman hosts special guest, attorney Mark Peterson. Mr. Peterson is a shareholder with Moss & Barnett, P.A. and has experience in assisting members of the debt industry in responding to CIDs. During the podcast, Mr. Rossman and Mr. Peterson explain the CID process, what a company should expect when a CID is received-including the cost of defending and the difficulties with a CFPB hearing.

In this episode of the Debt Collection Drill, attorneys John Rossman and Mike Poncin discuss specific tactics to avoid issues involving CFPB complaints, leaving messages and concerns regarding the TCPA.

Most FDCPA lawsuits are resolved without a Court ruling on the merits.  Further, debt collectors win a surprising number of these out-of-Court resolutions, obtaining dismissals of the cases without paying anything to settle.  In this episode of the Debt Collection Drill, Attorneys John Rossman and Mike Poncin discuss specific strategies debt collectors use to prevail without going to Court including public records investigations of the Plaintiff, negotiations with opposing counsel and examining the actions of the Plaintiff during the debt collection process.  If your agency has begrudgingly paid to settle a questionable FDCPA case in the past year, this is an episode you will not want to miss.

Most consumers advocates and collectors agree that the validation language contained in the FDCP A is stilted and obscure. However, the validation notice is a foundational document of the debt collection process. Two recent Court of Appeals cases examined questions about the wording of specific validation notices and have caused concern for collectors about the language used. Attorneys John Rossman and Mike Poncin examine these recent rulings in the latest episode of the Debt Collection Drill and provide tips and language to use for validation notices.

Two substantial debt collector victories in FDCPA cases at the end of 2013 – both of which were won by Moss & Barnett attorneys – may set the tone for many lawsuits in 2014, especially as they relate to the "least sophisticated consumer" standard.  In both cases, Courts rejected claims by the consumers and found that the collection agency had acted within the scope of the law.  Attorneys John Rossman and Mike Poncin discuss these recent cases and the impact they will have on every collection agency during their most recent episode of the Debt Collection Drill.