At a glanceFriday, February 18, 2022

Collection Industry News At A Glance - February 18, 2022
Friday February 18, 2022
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Articles

 
Responding to Automatic Stay Violations: A Cautionary Tale for Overzealous Debtors’ Attorneys

The filing of a bankruptcy petition under any chapter of the Bankruptcy Code creates the ‘automatic stay,’ which prevents creditors from taking any further action against either the debtor or the debtor’s assets during the bankruptcy. Seasoned bankruptcy attorneys know that a violation of the automatic stay is a serious matter and, because of this, appropriately advise their clients on complying with, or enforcing, the stay.

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The U.S. Department of Education has suspended the seizure of tax refunds, Social Security and other government payments to satisfy defaulted student loans until November, the agency said.

The U.S. Department of Education has suspended the seizure of tax refunds, Social Security and other government payments to satisfy defaulted student loans until November, the agency said.

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CFPB Steps Up Scrutiny of Student Loan Servicers Who Deceive Borrowers About Public Service Loan Forgiveness

Washington, D.C. – Today the Consumer Financial Protection Bureau (CFPB) released a bulletin detailing student loan servicers’ obligation to halt unlawful conduct regarding borrowers’ eligibility and benefits under the Public Service Loan Forgiveness (PSLF) Waiver. The bulletin recommends actions servicers should consider taking to ensure they do not misrepresent borrower eligibility or make deceptive statements to borrowers about the PSLF program and the Waiver.

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FTC Takes Action to Combat Bogus Money-Making Claims Used to Lure People into Dead-end Debt Traps

The Federal Trade Commission launched a proceeding to challenge bogus money-making claims used to lure consumers, workers, and prospective entrepreneurs into risky business ventures that often turn into dead-end debt traps. If finalized, a rule in this area would allow the Commission to recover redress for defrauded consumers, and seek steep penalties against the multilevel marketers, for-profit colleges, “gig economy” platforms, and other bad actors who prey on people’s hopes for economic advancement.

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What Do You Do If a Debtor Defaults on Its Confirmed Bankruptcy Plan?

A recent opinion from the Michigan Court of Appeals explained that when a debtor defaults under a confirmed chapter 11 bankruptcy plan, a creditor can enforce its rights in state court, and perhaps also in the bankruptcy court.

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CFPB to Examine Colleges’ Direct Lending Practices

On January 20, 2022, the CFPB announced that it will examine post-secondary, for-profit colleges, that lend directly to students.  The CFPB will examine specific actions that these colleges take against their students who are late or delinquent on private student loans.  These practices include: placing enrollment restrictions on students, withholding transcripts from students, improperly accelerating payments, failing to issue refunds, and maintaining improper lending restrictions. 

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District Court Grants Interlocutory Appeal in CFPB Enforcement Action against Student Loan Trusts and Stays Case Pending Appellate Review

On February 11, 2022, the U.S. District Court for the District of Delaware granted a motion for interlocutory appeal in Consumer Financial Protection Bureau v. The National Collegiate Master Student Loan Trusts filed by defendants The National Collegiate Student Loan Trusts (the “Trusts”) and certain interveners in the action.1  The district court certified two questions for review by the U.S. Court of Appeals for the Third Circuit: (1) whether, under the Consumer Financial Protection Act (“CFPA”), the Trusts are “covered persons” subject to the CFPB enforcement authority; and (2) whether, after Collins v. Yellen, the CFPB was required to ratify the enforcement action before the three-year statute of limitations ran out.2

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FCC Chairwoman proposes ruling declaring ringless voicemails subject to TCPA autodialer prohibition

Although several court decisions have held that ringless voicemails to a consumer’s cell phone constitute “calls” subject to the Telephone Consumer Protection Act (TCPA) autodialer prohibition, the Federal Communications Commission (FCC)  has not yet officially weighed in on the question.  In 2017, a marketing company filed a petition with the FCC seeking a declaratory ruling that the technology was not subject to the TCPA but the petition was withdrawn.

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After TransUnion, Lower Courts Grapple With Article III Standing in Data Breach Lawsuits

In a data breach lawsuit, a plaintiff will sue a company that suffered a data breach in which the plaintiff’s personal information was stolen by cyberattackers. The plaintiff will claim that the breach has exposed the plaintiff to an increased risk that criminals will steal their identity at some point in the future. A recurring issue in these lawsuits is whether such an allegation is a sufficiently “concrete” injury such that the plaintiff has standing to bring their claims. Lately, courts have begun to consider the Supreme Court’s recent decision in TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). 

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Reverse mortgage complaints to CFPB accelerate during pandemic

The amount of consumer complaints to the Consumer Financial Protection Bureau (CFPB) related to the reverse mortgage product category appear to have accelerated since the beginning of the national emergency stemming from the COVID-19 coronavirus pandemic, RMD has learned.

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The Eastern District of Pennsylvania is the most recent federal district court to adopt Hunstein v. Preferred 

The Eastern District of Pennsylvania is the most recent federal district court to adopt Hunstein v. Preferred Collection and Mgmt. Svcs., Inc., 17 F.4th 1016 (11th Cir. 2021) by holding that the transmission of information to a vendor was a “communication” to a “person,” satisfying the “in connection with the collection of any debt” prong of Section 1692c(b) of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et. seq.

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Year-End Report Reveals Continuing Trend of Increased FCRA Filings in 2021

According to a recent year-in-review report by WebRecon, Fair Credit Reporting Act (FCRA) filings continued their upward trajectory throughout 2021. This stands in contrast to filings under the Fair Debt Collection Practices Act (FDCPA) or the Telephone Consumer Protection Act (TCPA), which decreased from the previous year. Meanwhile, complaints filed with the CFPB increased substantially from 2020.

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Education Department Approves $415 Million in Borrower Defense Claims Including for Former DeVry University Students

Nearly 16,000 borrowers will receive $415 million in borrower defense to repayment discharges following the approval of four new findings and the continued review of claims. This includes approximately 1,800 former DeVry University (DeVry) students who will receive approximately $71.7 million in full borrower defense discharges after the U.S. Department of Education (Department) determined that the institution made widespread substantial misrepresentations about its job placement rates. These are the first approved borrower defense claims associated with a currently operating institution, and the Department will seek to recoup the cost of the discharges from DeVry. The Department anticipates that the number of approved claims related to DeVry will increase as it continues reviewing pending applications.

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FTC Enforcement Action Leads U.S. Dept. of Education to Forgive $71.7 Million in Loans for Students Deceived by DeVry University

The Federal Trade Commission announced today that its years-long investigation into DeVry University continues to benefit consumers, as the U.S. Department of Education will forgive $71.7 million in federal student loans for students deceived by the for-profit university, based in part on the FTC’s prior action.

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Massachusetts Legislature Evaluates Its Own Comprehensive Consumer Privacy Law

The Massachusetts Information Privacy and Security Act (MIPSA) continues to advance through the state legislative process, and is now before the full legislature. While the Act has several hurdles to clear before becoming law, its notable for two reasons. First, the comprehensive nature of the MIPSA exemplifies the direction state data protection laws are heading in the absence of a comprehensive federal consumer data protection law. Second, given the borderless nature of e-commerce, the most robust state consumer data protection law will likely become the de facto national consumer data protection law, and the MIPSA may take that title. This post highlights significant portions of the current version of the Act.

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Education Department suspends seizure of tax refunds, Social Security for overdue student loans until November

The U.S. Department of Education has suspended the seizure of tax refunds, Social Security and other government payments to satisfy defaulted student loans until November, the agency said.

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New York Lowers Statutory Interest Rate on Money Judgments for Consumer Debts Pursuant to the Fair Consumer Judgment Interest Act

For the first time since 1981, New York will lower the interest rate on money judgments based on consumer debts from nine percent (9%) per annum to two percent (2%) per annum. Governor Kathy Hochul signed the bill, S5724-A, referred to as the Fair Consumer Judgment Interest Act (“FCJIA”), into law on December 31, 2021.

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Consumer Financial Protection Bureau Launches New Way for the Public to Petition the Agency for Action

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today made it easier for the public to meaningfully engage with the agency and request regulatory changes. Starting today, members of the public can submit petitions for rulemaking directly to the CFPB. The petitions will be posted on public dockets for review and comment.

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CFPB issues warning on use of prepaid cards to pay government benefits

The Consumer Financial Protection Bureau warned financial services companies Tuesday about a longstanding prohibition on using prepaid debit cards as the sole method for distributing government benefits.

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NEW – CBA URGES CFPB TO SUPERVISE FINTECH SMALL BUSINESS LENDERS

In a new letter sent yesterday to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra, Consumer Bankers Association (CBA) President & CEO Richard Hunt urged the Bureau to extend its supervisory authority over small business fintech lenders, who operate outside the regulatory purview of the Bureau and do not abide by the same federal oversight requirements as traditional banks.

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Consumer Financial Protection Bureau Launches New Way for the Public to Petition the Agency for Action

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today made it easier for the public to meaningfully engage with the agency and request regulatory changes. Starting today, members of the public can submit petitions for rulemaking directly to the CFPB. The petitions will be posted on public dockets for review and comment.

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EDPA Finds Alleged Transmission of Consumer Information to Letter Vendor States Claim Under FDCPA’s § 1692c(b)

The U.S. District Court for the Eastern District of Pennsylvania on Feb. 7 handed down a decision finding that the mere use of a letter vendor is sufficient to allege a violation of 15 U.S.C. § 1692c(b) of the Fair Debt Collection Practices Act by transmitting information to the letter vendor.

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Most Consumers Expect Digital Banking to Be Personal Banking

Thanks to the acceleration of digital interactions during the pandemic, consumers now expect more than half of their banking business — 61% — to be digital-only by 2024. But that still leaves another 39% of banking they expect will involve direct human assistance. Even as banks see an increase in customers relying solely on ATMs and mobile channels at the expense of access physical branches and drive up tellers, branches won’t entirely vanish from customer expectations.

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CFPB hopes to reverse court decision that handed Ocwen a win last year

Nearly a year after a federal judge dismissed the Consumer Financial Protection Bureau‘s mortgage servicing misconduct suit against Ocwen Financial Corp., the watchdog agency is hoping to overturn the decision.

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Colorado AG Issues Guidance on Data Security Best Practices

The Colorado AG recently issued guidance on practices companies should consider to safeguard consumer data. This guidance was issued in response to companies asking what “reasonable” security means. While noting that the standard is a flexible one and calls for case-by-case determinations, the AG highlighted activities it will weigh when making a decision on whether companies are acting reasonably to safeguard information.

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Seventh Circuit issues decision on FDCPA standing and bona fide error defense

A new decision from the U.S. Court of Appeals for the Seventh Circuit in two consolidated cases analyzes the requirements for Article III standing in a FDCPA case.  It also addresses what a debt collector must show to establish that it maintained procedures reasonably adapted to avoid an error as required by the FDCPA’s bona fide error defense.  Under the bona fide error defense, a debt collector is not liable for a FDCPA violation if it shows by a preponderance of the evidence that (1) the violation was not intentional, (2) the violation resulted from a bona fide error, and (3) it maintained procedures reasonably adapted to avoid the error.

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U.S. FORECLOSURE ACTIVITY IN JANUARY 2022 HIGHEST SINCE BEGINNING OF COVID-19 PANDEMIC

IRVINE, Calif., Feb. 10, 2022 /PRNewswire/ -- ATTOM, licensor of the nation's most comprehensive foreclosure data and parent company to RealtyTrac (www.realtytrac.com), the largest online marketplace for foreclosure and distressed properties, today releasedits January 2022 U.S. Foreclosure Market Report, which shows there were a total of 23,204 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — up 29 percent from a month ago and 139 percent from a year ago.

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CFPB Takes Action to Halt Prepaid Card Providers Siphoning Government Benefits

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) is taking action to halt prepaid card providers illegally siphoning money away from Americans through exclusive government benefit contracts. The CFPB issued a compliance bulletin today outlining the existing prohibitions against prepaid cards being the sole method for distributing government benefits. The bulletin underscores rules intended to protect market competition and to protect people’s right to have a choice in how they receive their money under the Electronic Fund Transfer Act (EFTA).

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CFPB Bulletin 2022-02: Compliance Bulletin on the Electronic Fund Transfer Act’s Compulsory Use Prohibition and Government Benefit Accounts

Section 913 of the Electronic Fund Transfer Act (EFTA) provides, among other things, that no person may require a consumer to establish an account for receipt of electronic fund transfers with a particular financial institution as a condition of receipt of a government benefit. The Consumer Financial Protection Bureau (CFPB) is issuing this Compliance Bulletin to reiterate that this prohibition in EFTA applies to government benefit accounts.

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3-year personal loan rates dip, still hovering near 2022 record low

Borrowers with good credit seeking personal loans during the past seven days prequalified for rates that were slightly lower for 3-year fixed rates and slightly higher for 5-year fixed rates compared to the previous seven days’ fixed-rate loans.

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CFPB hopes to reverse court decision that handed Ocwen a win last year

Nearly a year after a federal judge dismissed the Consumer Financial Protection Bureau‘s mortgage servicing misconduct suit against Ocwen Financial Corp., the watchdog agency is hoping to overturn the decision. During oral arguments in Miami before the U.S. Court of Appeals for the Eleventh Circuit, Lawrence DeMille-Wagman, CFPB’s attorney, argued that a consent agreement from 2013 did not excuse the mortgage servicer from future violations and that Ocwen is on the hook for alleged wrongdoings.

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FTC to VoIP Providers: Turn over Information for Robocall Investigations or Prepare to be Sued in Federal Court

At the request of the Federal Trade Commission, federal courts in California ordered two Voice-over-Internet Protocol (VoIP) service providers to turn over information that the agency is seeking as part of ongoing investigations into potentially illegal robocalls. Companies that fail to comply with such federal court orders can be held in contempt.

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FCC Targets “Ringless Voicemails” for Robocalling Enforcement

The Federal Communications Commission (FCC) is considering opening another front in robocalling enforcement by declaring “ringless voicemails” subject to consumer consent and other requirements under the Telephone Consumer Protection Act (TCPA). Ringless voicemails deliver messages directly to wireless users’ voicemail boxes without ringing their devices. Proponents of the technology have long argued that such messages fall outside the TCPA because no “call” actually is made to the consumer

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CFPB highlights changes in VA medical debt credit reporting practices as precedent for broader healthcare industry

In a blog post, the CFPB reported that the Department of Veterans Affairs (VA) has announced a change to when it will report information on outstanding medical bills to consumer reporting companies.

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VA Changes Debt-Reporting Procedure

Veterans who owe money to the Department of Veterans Affairs will have a better chance to avoid having their debt reported to consumer reporting agencies (CRAs). VA has amended its procedures for reporting these debts until all available efforts to collect them have been exhausted and they are classified as not collectible. Also, catastrophically disabled and low-income veterans’ debts will not be reported to CRAs at all, with the understanding that these veterans are entitled to free VA care.

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Report illustrates how the big three credit reporting companies are giving consumers the runaround

he nationwide consumer reporting agencies (NCRAs), including the Big Three—Experian, Equifax, and TransUnion—play an outsized role in Americans’ economic lives. The companies cover more than 1.6 billion credit accounts for over 200 million adults every month. But inaccurate reports can inflate the cost of credit and severely limit opportunities for Americans looking to buy their first home, start a small business, or even reenter the workforce. A recent Consumer Financial Protection Bureau (CFPB) report reveals that the NCRAs are failing to substantively respond to most consumer complaints filed with the CFPB—and harming consumers and businesses in the process.

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Portfolios For Sale

 
$4,997,095.17 Credit Cards
BAL Financial LLC

(617) 595-5794

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$364,000,000 Credit Cards
Capital Debt Solutions, LLC

(866) 305-5102

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Profiles

 

   Agency 

POM Recoveries, Inc.

(631) 761-1028

   Skip Tracing 

Found Them! Inc. / Wage Garnishment.info

(855) 924-3427

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Industry Events

 
AFCC 2022 Spring Conference

American Fair Credit Council

Four Seasons Hotel
New Orleans , LA
March 27 - 29 , 2022

(888) 657-8272

Collection and Recovery Solutions 2022

Resource Management Services, Inc.

Our live Collection and Recovery Solutions event will be held May 25 – 27 at the Four Seasons in Las Vegas. We hope you can join us! Watch for updates at www.crs2022.com. For more info, our team can always be reached at crs@resourcemanagement.com

May 25 - 27 , 2022

562-906-1101