Jackson v. Countrywide Home Loans, Inc., Dist.

Court, MD Alabama 2012

In the Court's first Memorandum Opinion and Order dismissing Plaintiff's Complaint with leave to re-file, the Court was unable to conclude, based upon Plaintiff's pleadings, whether Defendants qualified as "debt collectors" for purposes of the FDCPA. (Mem. Op. 6-8.)

Kaltenbach v. Richards, 464 F. 3d 524 - Court of Appeals, 5th Circuit 2006

We therefore hold that a party who satisfies 1692a(6)'s general definition of a "debt collector" is a debt collector for the purposes of the entire FDCPA even when enforcing security interests. The district court did not consider whether Richards fits the general definition of a debt collector. We therefore REVERSE the district court's dismissal and REMAND the case for proceedings not inconsistent with this opinion.

Williams v. WELLS FARGO BANK, NA, Dist. Court, WD Washington 2012

On January 10, 2012, the Court dismissed all claims, except for the Fair Debt Collections Practices Act ("FDCPA") claim against Wells Fargo. Dkt. 65.[1] In denying Wells Fargo's motion to dismiss the FDCPA claim ("First Motion"), the Court rejected the argument that Wells Fargo was not a "debt collector" under the FDCPA. Id. at 10-13. The Court explained that Plaintiffs, who stopped making payments on the loan in or about May 2009, had been in default for more than a year at the time that MERS assigned the deed of trust to Wells Fargo in June 2010. Id. Because Plaintiffs had been in default at the time that Wells Fargo acquired the deed of trust, the Court ruled that the FDCPA treated Wells Fargo as a debt collector (and not a creditor). Id. In the instant motion, Wells Fargo again moves to dismiss the FDCPA claim relying primarily on the same argument that it is not a debt collector under the statute. Dkt. 69. But, unlike last time, Wells Fargo now contends that it acquired the loan not in July 2010 after Plaintiffs' default, as it previously argued, but in June 2007 before Plaintiffs stopped making payments on the underlying loan. Id. at 5; Dkt. 77 at 5. Wells Fargo argues that the so-called "new evidence" i.e., that it serviced the loan at issue from June 2007 through Plaintiffs' default causes it to fall outside the statutory definition of "debt collector" and discharges any potential liability under the FDCPA. Id.; Dkt. 69 at 5. Separately, Wells Fargo argues that, notwithstanding whether or not it is a debt collector, Plaintiffs have failed to submit any evidence in support of their FDCPA claim.

Clark v. Capital Credit & Collection Serv., 460 F. 3d 1162 - Court of Appeals, 9th Circuit 2006
Most important, because the FDCPA is a remedial statute aimed at curbing what Congress considered to be an industry-wide pattern of and propensity towards abusing debtors, it is logical for debt collectorsrepeat players likely to be acquainted with the legal standards governing their industryto bear the brunt of the risk.[6] As we have oft repeated, it does 1172*1172not seem "unfair to require that one who deliberately goes perilously close to an area of proscribed conduct shall take the risk that he may cross the line." FTC v. Colgate-Palmolive Co., 380 U.S. 374, 393, 85 S.Ct. 1035, 13 L.Ed.2d 904 (1965); see also Swanson, 869 F.2d at 1228. Other than as permitted by 1692c(c), a debt collector who has received a cease communications order from a debtor must not contact the debtor unless it has received a clear waiver of that order.

Mahon v. Credit Bureau of Placer County Inc., 171 F. 3d 1197 - Court of Appeals, 9th Circuit 1999
We conclude the evidence established, without a genuine dispute of any material fact, that the Notice sent to the Mahons on September 21, 1995 was received by them shortly thereafter. They did not request verification of the debt to Dr. Bowen until June 5, 1996, almost nine months later. For their request to have been effective, it had to be made within 1203*1203 thirty days from the date they received the Notice from the Credit Bureau. 15 U.S.C. 1692g(a)(3). The Mahons' tardy request for verification of the debt, therefore, did not trigger any obligation on the part of the Credit Bureau to verify the debt. Even if it did, however, the Credit Bureau, when it received the June 5, 1996 request, promptly contacted Dr. Bowen's office, verified the nature and balance of the outstanding bill, learned that monthly statements had been sent from Dr. Bowen's office to the Mahons for over two years, and established that the balance was still unpaid. The Credit Bureau then promptly conveyed this information to the Mahons, along with an itemized statement of the account. Although the Mahons did not request verification of the debt within the time provided by the statute, the Credit Bureau properly verified the debt anyway. The Mahons failed to request verification of the debt within thirty days following their receipt of the Notice, but when the Credit Bureau received their tardy request, it promptly verified the debt anyway, just as the statute would have required had the Mahons made a timely request. The goal of every collection agency is to reduce the risk of being sued or, for that matter, the risk of being threatened with a possible suit. In my mind, the best way to avoid the threat of litigation is to set up your agencys practices and procedures so that they are designed to prove your compliance with the law. Designing your policies in this way not only makes it tougher for a debtor to sue you in the first place, but it also provides you with a powerful defense bona fide error- if you do make a mistake and are sued. A good example of how an agency can set up its policies and procedures to defeat a debtors claim was demonstrated in a recent case wherein I defended the agency. (Mahon v. Credit Bureau of Placer County, 171 E.3d 1197 (9th Cir. 1999).) The Mahons had incurred a debt for medical services rendered in 1993. The doctors office continued to send monthly bills to the Mahons for more than two years with no response. Eventually, the doctors office assigned the collection to the Credit Bureau. The agency used a computerized collection tracking and filing system. The computerized system automatically generated collection letters, and it also acted as an electronic filing system for each collection account, recording all collection activities, including which notices were sent, to whom, and when. Prior to mailing, the agencys employees would invariably count the number of outgoing notices against the number of accounts assigned for mailing in that days outgoing batch

of letters. The collection notices were then automatically addressed, stuffed, and posted by another machine that also noted the number of letters handled. After mailing, the agency monitored each account, routinely noting whether an envelope was returned undelivered. On September 21, 1995, the Credit Bureaus computer software generated its first written collection letter, and the letter was mailed pursuant to the procedures outlined above. Second and third notices subsequently were mailed according to the above policies and procedures. No notation was made in the agencys records that any of the three letters had been returned. Likewise, no notation was found in the computerized collection notes which indicated the Mahons responded to the letters, either orally or in writing. The testimony from the Credit Bureau was that if a response had been received, it would have been invariably noted in the collection notes. In January of 1996, after receiving no response from the Mahons, the Credit Bureau reported the Mahons delinquent collection account to the major credit reporting agencies. This triggered a response, and on September 20, 1996, the Mahons field suit in federal court alleging violations of the FDCPA, including the Credit Bureaus purported failure to send a written validation of debt notice. The Mahons argued, among other things, that they had not received any of the three letters and that the Credit Bureau could not prove that the Mahons had been sent the letters, much less that they had actually received them.

From The Frontline: By Mark Ellis

http://www.ellislawgrp.com/article06frontline.html Based upon the information provided to me by the Credit Bureau about its policies and procedures, I moved to dismiss the Mahons lawsuit. I maintained that the Credit Bureaus computerized records, as well as the sworn testimony of the employees, provided ample evidence that, under the Bureaus regular policies and procedures, the validation had to have been mailed and it was not returned. Based upon this evidence, I argued the Mahons must have received the validation of debts letter and thus the Credit Bureau must have complied with the FDCPA. The Mahons argued that their testimony was sufficient to prevent summary judgment in favor of the Credit Bureau, and that it created a genuine dispute as to whether the validation letter had actually been sent. The Federal District Court, however, disagreed and threw their case out of court. The Mahons appealed, but the Ninth Circuit Court of Appeals upheld the dismissal. Referencing the Credit Bureaus standards procedures, the court wrote: The Mahons offered no evidence that the Credit Bureau failed to follow it ordinary business procedure in sending them the Notice. They simply say they did not receive the Notice. . . We conclude there is no genuine dispute of the fact that the Credit Bureau sent the required Validation of Debt Notice to the Mahons. . . (Mahon, at p. 1202.) As you know, debtors often will allege anything to get out of paying their debts or

as a basis for bringing a suit. Policies and procedures which faithfully are followed and faithfully documented by your agency help prove what really happened. While you cannot prevent anyone from suing you, your procedures and prevent them from winning. Make your agencys policies and procedures are seamless, as the Credit Bureau in Mahon did, and help defeat the claim before it is even brought. Equally important, after a lawsuit is filed, your agencys well-documented policies and procedures will give your attorney the evidence he or she needs to win your case. . . on the front line. Under the FDCPA, the bona fide error defense is found at 15 U.S.C. 1692k(d); under Californias Rosenthal Fair Debt Collection Practices Act, the bona fide error defense is found in Civil Code 1788.30(e)

Blick v. JP Morgan Chase Bank, NA, Dist. Court, WD Virginia 2012 D. The Fair Credit Reporting Act
In their Prayer for Relief, Plaintiffs ask the Court for an order requiring Defendants to "remove any derogatory reporting of the debt from all credit reporting agencies." Compl. 21. I liberally construe Plaintiffs' request as a claim arising under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. 1681 et seq. Plaintiffs' claim, however, fails. As Defendants have noted, the FCRA does not provide a private right of action for a credit furnisher's alleged failure to report accurate information. Rather, a furnisher only faces liability if a complaint alleges that a furnisher failed to conduct a reasonable investigation of a consumer's dispute after being notified of a dispute directly by a credit reporting agency. See 15 U.S.C. 1681s-2(b)(1)(B); Chiang v. MBNA, 620 F.3d 30 (1st Cir. 2010) (holding a notice of disputed information provided directly by a consumer to a data furnisher does not trigger a furnisher's investigation duties under the FCRA). Plaintiffs' Complaint fails to allege that any Defendant received notification from a credit reporting agency regarding Plaintiffs' dispute, and to the extent alleged, the FCRA claims fail. Finally, to the extent Plaintiffs' claims regarding derogatory reporting are construed to be assert state law claims, then those claims are expressly preempted by 15 U.S.C. 1681t(b)(1)(F). "[Plaintiff's state law claims], in the main, are preempted by . . . the FCRA's preemption provision." Ross v. F.D.I.C., 625 F.3d 808, 810-15 (4th Cir. 2010). The Fourth Circuit, in Ross,thoroughly discussed the FCRA and preemption, touching on some provisions of the FCRA that expressly authorize state law claims [5]; however, Plaintiffs' cursory mention of credit reporting in the Complaint cannot be read to implicate any of the exceptions discussed in Ross.