A New Jersey lawyer and his two affiliated Pennsylvania debt-collection companies have agreed to cancel $7.9 million in charged-off debts, delete records of the claimed debts from the credit reports of 1,922 consumers and pay $45,000 in refunds and consumer education costs, under a settlement with the West Virginia attorney general.Laurence Hecker and the collection agencies, PM Financial Solutions LLC and Account Portfolio Management LLC, were accused of using high-pressure tactics, including threats of litigation, in an attempt to collect outdated and inadequately documented debt, reports the Record.Hecker and APM also were not licensed and bonded as required under state law, the article says. It doesn’t include any comment from the lawyer or the companies.Said Attorney General Darrell McGraw: “I will not allow consumers facing dire financial circumstances to be crushed by abusive collection practices. My office will continue our vigorous efforts to enforce the law … [Read more...] about NJ Lawyer, 2 Affiliated Debt Collectors, Agree to $7.9M Settlement With AG of W.Va.
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Entities engaged in debt collection must be careful in seeking to collect on old debt – dunning letters could now be found misleading if the debtor has a statute of limitations defense. The Seventh Circuit, in McMahon v. LVNV Funding, LLC and Delgado v. Capital Management Services, L.P., 2014 U.S. App. LEXIS 4592 (7th Cir. March 11, 2014), held that collection letters, which do not disclose the debt as beyond the statute of limitations, violate the Fair Debt Collection Practices Act (FDCPA) even though they do not threaten litigation and merely seek to settle the debt. This result further confuses FDCPA application, creates a circuit split, and increases requirements upon creditors and the collection industry.FDCPA ProhibitionsThe FDCPA prohibits, among other things, the use of “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Section 1692e precludes practices such … [Read more...] about Seventh Circuit Adopts Strict Fair Debt Collection Practices Act (FDCPA) Interpretation
As we all know it takes more than legislation to shift a mindset away from business as usual. And by no means is the once overlooked world of consumer finance excepted from this truth. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), which seeks to change the corporate culture within American financial institutions, was just the start, but it cannot do it alone. This is where the regulators fit in. But are they rising to the challenge?Armed with four more years of President Obama’s administration, the Consumer Financial Protection Bureau (CFPB or Bureau), with the prudential regulators in tow, (e.g., Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve Board (FRB)) have been given the breathing room and the perceived electoral approval to address so called “deficient” compliance management systems (CMS)1 within the consumer finance space to ensure proper legal … [Read more...] about Are Compliance Management Systems the New Battlefront for the CFPB and Prudential Regulators?
His pro bono client’s life had been seized up in such fear that she pawned her wedding ring to feed the maw of a default judgment against her in Los Angeles County Superior Court, obtained by one of the nation’s biggest debt buyers.It was too late to undo the judgment, but Benshoof sued the debt buyer, alleging that its repeated phone calls to the woman were harassing and illegal. The company turned over phone recordings in discovery that showed the calls weren’t as heated as the woman thought.“I still think they crossed a line,” says Benshoof, a partner and big-firm commercial litigator in the Los Angeles office of Alston & Bird.The debt buyer settled, discharging the debt of $5,000, which included interest on the original $3,500 loan, and gave back $2,600 the woman had managed to pay on the judgment.But Benshoof remained curious. His client still insisted she’d never taken out a loan, though she once might have co-signed one. The bank that … [Read more...] about Debt-buying industry and lax court review are burying defendants in defaults
On July 28, the Consumer Financial Protection Bureau (CFPB) released a detailed summary of regulations it is considering imposing on third-party debt collectors.The CFPB’s proposals serve four purposes:Providing clarifications to the Fair Debt Collection Practices Act (FDCPA)Imposing heightened substantive restrictions on debt collectorsStrengthening initial written disclosures that debt collectors must provide when communicating with a consumerDirectly targeting the data integrity and continuity issues associated with the purchase and sale of delinquent debtThese proposals, once finalized, stand to potentially form the basis of significant “unfair, deceptive, or abusive acts or practices” (UDAAP) enforcement and regulatory actions against large bank and non-bank financial institutions that use third-party debt collectors to collect debts on their behalf or sell charged-off debt to third-party debt collectors.The CFPB has issued these proposals as an initial … [Read more...] about CFPB Previews Anticipated Debt Collection Regulations