Nicole Strickler & Lauren Burnette Honored by Collection Advisor Magazine

Collection Advisor Magazine honored two Messer Strickler, Ltd. shareholders in its September/October issue. Nicole M. Strickler was honored as one of the "20 Most Powerful Women in the Collection Industry", mean to honor those who have found success in their organizations and used that influence to create positive waves of change in the industry. You can Nicole's full interview, along with that of other honorees, at HERE.

In the same issue, shareholder Lauren M. Burnette was honored as one of the "Top Attorneys in Collections". These attorneys were nominated by their peers for efforts to improve collections through legal collections, creditor defense and legal consultation. You can read Lauren's full interview HERE.

Messer Strickler, Ltd. sends its congratulations to Lauren and Nicole!

Messer Strickler, Ltd Welcomes Lauren Burnette as Shareholder

Lauren Burnette Take 2.jpg

Messer Strickler, Ltd. is pleased to announce that Lauren Burnette has joined our firm as a shareholder and will be heading our new office located in Jacksonville, Florida. Lauren concentrates her practice in the defense of litigation brought under the consumer protection laws, as well as compliance counseling.  Lauren is licensed to practice in federal and state courts in Florida, Maryland, and Pennsylvania, and will expand Messer Strickler, Ltd.’s practice coverage area throughout the East Coast.

With Lauren joining our team, Messer Strickler, Ltd. is well positioned to serve the legal interests of nationwide firms regulated under the consumer protection laws.  The attorneys at Messer Strickler are pleased that Lauren has joined our growing practice. Please contact Lauren at 904-201-9120.

Law Firm Sued For Allegedly Tricking Debtors in Carrasquillo v. Messerli & Kramer

Messerli & Kramer, a Minneapolis-based law firm, has been hit with a proposed class action in federal court by Marta Carrasquillo, a Wisconsin woman who alleges the firm, while acting as a debt collector, sent a deliberately misleading notice that gave the impression she had lost her case, including an allegedly forged signature from a judge or other court official. Carrasquillo alleged that Messerli & Kramer violated the FDCPA and Wisconsin Consumer Act by sending a financial disclosure form that closely resembles a standard form sent after a judgment has been entered against the debtor. Carrasquillo alleged that the form is in violation of both the FDCPA and the Wisconsin Consumer Act because it is both misleading and falsely represents that a judgment had been entered against Carrasquillo. The debt at issue dated back to May of 2018. At that time, Carrasquillo initially appeared in response to a claim in small claims court filed by Messerli over a Bank of America Credit Card debt she allegedly owed. About a month later, Carrasquillo claimed she received the form at issue. Carrasquillo alleged the firm intended to make consumers think they had lost their cases and now had to supply sensitive information, including Social Security numbers.

Messerli has been the subject of a lawsuit of several lawsuits in recent years; specifically, Messerli has been named in Minnesota federal court in over a dozen lawsuits related to debt collection and has also been accused of lying to a state court judge in a debt collection case, though the Eighth Circuit decided in 2012 that the statements were not lies. The complaint estimates that over 50 people in Wisconsin have been sent a financial disclosure form similar to the one Carrasquillo allegedly received.

At this point, these are merely allegations that have yet to be proved. The firm may still be successful in defense of these claims.

If you have questions regarding this case or FDCPA compliance in general, contact Joseph Messer for a free consultation.  Mr. Messer can be reached at (312) 334-3440 or

Can Debt Collectors Communicate with Consumers Via Text Message?

According to recent research, 264 million smartphone users collectively look at their phones some 12 billion times a day.[1] Further, millennials (those born between 1980 and 1996[2]) prefer texting over email, phone and social media to communicate with businesses.[3] Despite America’s love of texting, many businesses, including those in the credit and collection industry, do not utilize any text platform to communicate with consumers. One reason for the hesitance is confusion concerning the legality of utilizing text messaging as a method of communication. This article will explore the utilization of text messaging in the context of debt collection.

Fair Debt Collection Practices Act (“FDCPA”)[4]:   The Fair Debt Collection Practices Act does not prohibit collectors from using text as a method of communication. Texts are still subject to the same general prohibitions as all communications subject to the Act. For example, deceptive “door opener” text messages, which use a false pretense to get a consumer to return the collector’s call, are impermissible. In the past, at the FTC’s request, federal courts in New York and Georgia halted three debt collection operations that allegedly used text messages to falsely threaten to arrest or sue consumers, unlawfully contact third parties, and failed to identify themselves as debt collectors as required by the law. According to the FTC, the companies sent texts to trick consumers into calling them back using statements such as, “YOUR PAYMENT DECLINED WITH CARD ***-****-***-5463. . . CALL 866-256-2117 IMMEDIATELY, even though the consumers had never attempted to make any payment.[5] Notably, these messages would be impermissible under the Act whether sent by text message, by telephone, or in writing as unlawful misleading communications.

Deception aside, providing the disclosures required by the Act can be a struggle in text message. §1692e(11) of the Act requires disclosure in the initial communication with a consumer that the debt collector is attempting to collect a debt and that any information obtained will be used for that purposes. Further, all subsequent communications must include the disclaimer is from a debt collector. But, that is not all. Under Section 1692g(a) of the Act, within five days after the initial communication (unless the information is contained in that initial communication or the consumer has paid the debt), the debt collector must send the consumer a written notice containing--- the amount of the debt, the name of the creditor to whom the debt is owed, and a further disclosure stating:

Unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector. If the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector. Upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

The first question is whether a text can satisfy the “written notice” requirement of §1692g. As of the date of this article, there has been no case to consider whether a collector may satisfy its §1692g “written notice” obligations by text message. From a logical perspective, a text message is certainly a notice made in writing. As a practical matter, however, it would be impossible to fit all of the required §1692e(11) and §1692g(a) information in a single text message to a consumer. This begs the question of whether several text messages, sent in unison or consecutively, constitute a single communication or multiple communications under the Act. While the case law does not answer this question, certainly under basic logic a compelling argument can be made to suggest that a group of messages sent in unison constitutes a single, as opposed to multiple, communication.

The timing of text transmission is important for another reason. Under §1692c(a)(1), debt collectors are prohibited from contacting consumers at any unusual time or place or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that a convenient time for communicating with a consumer is after 8:00am and before 9:00pm, local time at the consumer’s location. But, what does this mean for a text message, which may be sent at a particular time but read much later than the time of transmission. According to the CFPB, which is currently developing debt collection rules, “[b]ecause an email or text message is generally available for consumer’s receipt when the debt collector sends it, the time of sending will be the determining factor--- not, for example, when the consumer sees or opens it. Using the time the message is sent will also provide greater certainty to collectors in determining if they are communicating at a presumptively inconvenient time.”[6] Given this proposed rule, it is fairly safe to assume that text messages will be treated similarly to voicemails in that the time the communication is sent, not received, will be the relevant inquiry for purposes of §1692c(a)(1).

Uniform Deceptive Acts & Practices (“UDAP”):

State laws, many times known as UDAP laws, also regulate debt collection activity. Accordingly, while misleading texts are a problem under the FDCPA, they also may be a problem under relevant state law. For example, N.M. Stat. Ann. § 57-12-2(D) generally prohibits the false or misleading oral or written statements made in connection with the collection of debts. In Duke v. Garcia[7], a court found that an automobile finance company violated N.M. Stat. Ann. § 57-12-2(D) by sending a consumer false text messages designed to collect a deficient auto loan. In Duke, the finance company’s employee transmitted multiple text messages to the consumer stating a “warrant had been filed for her arrest and something akin to ‘I hope you enjoy jail.’” However, no warrant was ever filed for the consumer’s arrest.[8] In granting summary judgment against the finance company, the court found that the texts were actionable even though the consumer was not actually deceived by the messages as they tended to “deceive or mislead a reasonable person.”[9]

The Telephone Consumer Protection Act (“TCPA”): The TCPA restricts the use of automatic telephone dialing systems (“ATDS”), artificial or prerecorded voices, and unsolicited faxes.[10] The FCC is charged with implementing regulations and providing guidance on the TCPA’s provisions. As to wireless or cellular telephone numbers, the TCPA places a broad ban on the use of an ATDS to place calls without the prior express consent of the called party. Importantly, for purposes of this article, is the uniform understanding that a text message is a “call” within the meaning of the TCPA.[11] In short, debt collectors may not send text messages to consumers using an ATDS without prior express consent[12].

The definition of ATDS under the TCPA has been the subject of much debate. The TCPA defines an ATDS as equipment which has the capacity to: (1) store or produce telephone numbers to be called, using  a random or sequential number generator; and (2) to dial such numbers. In 2015, the FCC issued a Declaratory Ruling and Order which clarified the definition of an ATDS includes systems with the present or future ability to store and produce, and dial, random and sequentially generated numbers.[13] According to the FCC’s ruling, whether or not a dialing system’s capacity to function as an ATDS is actually utilized to make the call is irrelevant.

Notably, this definition was recently successfully challenged in the United States Court of Appeals for the District of Columbia Circuit. On March 16, 2018, the Circuit vacated the Commission’s definition of ATDS finding that the Commission’s “most recent effort [to define ATDS] f[ell] short of reasoned decisionmaking in offer[ing] no meaningful guidance to affected parties in material respects on whether their equipment is subject to the statute’s autodialer restrictions.”[14] At a minimum, the Circuit’s rejection of the FCC’s definition leaves open a new opportunity to argue a more limited definition of ATDS given the plain language of the statute. Nonetheless, debt collectors still need to be aware of the capabilities of texting platforms as some undoubtedly do meet the definition of an ATDS.[15]

If the software meets the definition of an ATDS, it does not necessarily follow that text messages are prohibited. Consent, which may be obtained orally or in writing, transforms an unlawful call into a lawful one. However, a collector must take care to ensure that it documents and retains records on consent as the burden to prove consent is on the collector.[16] Moreover, consent may be revoked by the consumer at any time through different channels.[17] Accordingly, the debt collector must implement a system for recording both consent and revocation thereof.

State Specific ATDS Laws:

Some states, like New York, have no specific regulations concerning the use of auto dialers. Others specifically limit their regulations to telemarketing efforts.[18] Additional state laws specifically allow dialing systems to be employed for debt collection efforts but may add certain disclosure, registration or consent requirements.[19] Most confusing are those state laws which fail to provide clarity on their application to debt collection activity.[20] At a minimum, collectors should contact their legal counsel to assess and determine whether the states in which they operate regulate, or prohibit, the use of their chosen text platform.







[4] 15 U.S.C. §1692 et seq.


[6] (P. 29)

[7] 2014 U.S. Dist. LEXIS 48047, *16 (D. N.M. 2014).

[8] Id. at *3.

[9] Id. at *16.

[10] See, 47 U.S.C. §227(b).

[11] Gager v. Dell Fin. Servs., LLC, 727 F.3d 265, 269, n.2 (3d Cir. 2013) (alteration in original) (quoting Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 953 (9th Cir. 2009)). See also In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 18 FCC Rcd. 14014, 14115 (July 3, 2003).

[12] There is a limited exception for debts owed to or backed by the United States. See 47 U.S.C.A. § 227(b)(1)(B) (2012) as amended by Bipartisan Budget Act of 2015, Pub. L. § 301, 129 Stat 584, 588 (2015).


[14] ACA Int'l v. FCC, 885 F.3d 687, 701 (D.C. Cir. 2018) (internal citations omitted).

[15] Franklin v. Express Text, LLC, No. 17-2807, 2018 U.S. App. LEXIS 6102, at *2 (7th Cir. Mar. 12, 2018).

[16] Ruffrano v. HSBC Fin. Corp., No. 15CV958A, 2017 U.S. Dist. LEXIS 132674, at *45 (W.D.N.Y. Aug. 17, 2017).

[17] Legg v. Voice Media Group, Inc., 990 F. Supp. 2d 1351, 1354-55 (S.D. Fla. 2014) (finding that consumer's text message to "STOP ALL" was sufficient to plead revocation of consent); Munro v. King Broad. Co., No. C13-1308JLR, 2013 U.S. Dist. LEXIS 168308, 2013 WL 6185233, at *1, 3-4 (W.D. Wash. Nov. 26, 2013) (evidence of having texted "STOP" was sufficient to overcome the defendant's motion for summary judgment regarding revocation of consent)

[18] See, e.g., Thrasher-Lyon v. Ill. Farmers Ins. Co., 861 F. Supp. 2d 898, 2012 U.S. Dist. LEXIS 50560 (N.D. Ill. 2012) (Debt collector was entitled to dismissal of the claim against it under the Illinois Automatic Telephone Dialers Act, 815 ILCS 350/1 et seq., because nowhere in the complaint did the claimant allege that the messages she received were communications soliciting the sale of goods or services.); Md. Code Ann., Pub. Util. Co. § 8-204(c) (limiting restrictions to “sales or surveys”); Mich. Comp. Laws Ann. §§ 445.111- 445.111(a) (banning under any circumstances the use of recorded messages for a “home solicitation sale.”

[19] See, e.g., Iowa Code Ann. § 476.57(2)(b)(3) (allows auto dialer use for debt collection); Ky. Rev. Stat. Ann. § 367.461 (same); N.J. Stat. Ann. § 48:17-30 (same); N.C. Gen. Stat. § 75-104(a), (b)(3) (allows auto dialer use for debt collection but specifies that (a) no part of the call shall be used for telephone solicitation and (b) the person making the call must clearly identify the person’s name and contact information and the nature of the unsolicited telephone call); 16 Tex. Admin. Code § 26.125 (requires permit registration).

[20] Me. Rev. Stat. Ann. tit. 10 § 1498(1) (defining prohibited “solicitation calls” as those, the purpose of which is to “gather data or statistics or solicit information).


In the class action lawsuit Boucher v. Finance System of Green Bay, Inc., No. 17-2308 (January 17, 2018), the 7th Circuit Court of Appeals ruled when state law prohibits a collector from lawfully or contractually impose “late charges and other charges” the collector's letter indicating that those charges will be imposed violates the Fair Debt Collection Practices Act even when the letter uses the "safe harbor" language established in the 7th Circuit's decision Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, & Clark, LLC, 214 F.3d 872 (7th Cir. 2000).  The collection letter in this case contained the following language taken from Miller v. McCalla:

As of the date of this letter, you owe $[a stated amount]. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check. For further information, write to the above address or call [phone number].

The plaintiffs claimed that this language was false because under Wisconsin law because the collector could not  cannot lawfully or contractually impose “late charges and other charges.” Plaintiffs further alleged that the letter would cause unsophisticated consumers to incorrectly believe that they would avoid such charges, and thus benefit financially, if they were to immediately send payment. For these reasons, plaintiffs claimed that the letter was false, misleading, and deceptive in violation of § 1692e. Plaintiffs also claimed that the letter failed to properly state the amount of debt, as required by § 1692g(a)(1). 

The 7th Circuit agreed with the plaintiffs and held that by threatening to impose "late charges and other charges" the letter was impermissibly deceptive because such charges could not lawfully be imposed under Wisconsin law. Although the letter used the safe harbor language set forth in Miller v. McCalla, the 7th Circuit found that the collector could not immunize itself by using that language when it was not accurate under circumstances of the case.

FDCPA class action lawsuits based on collection letters are common since collection agencies can send tens of thousands of identical letters to consumers.  A class action lawsuit can put an agency out of business.  It is imperative that collection agencies have their collection letters reviewed for FDCPA compliance by qualified legal counsel.  If you would like to have your agency's letters reviewed, or if you have questions regarding this case or FDCPA compliance in general, contact Joseph Messer for a free consultation.  Mr. Messer can be reached at (312) 334-3440 or

New Illinois Law Strengthens Existing State Law on Workplace Sexual Harassment

On November 16, 2017, Governor Bruce Rauner signed new legislation into law to strengthen existing state law on workplace sexual harassment. The amendment required that all local units of government update their harassment policies by January 15, 2018. At minimum the updated policies must:

·         Prohibit sexual harassment

·         Provide details on how an individual can report an allegation of sexual harassment, including options for making a confidential report to a supervisor, ethics officer, Inspector General, or the Illinois Department of Human Rights.

·         Prohibit retaliation for reporting sexual harassment allegations and allow claims of retaliation to be filed under the Stat Officials and Employees Ethics Act, the Whistleblower Act and the Illinois Human Rights Act.

·         Detail the consequences of violating the prohibition against sexual harassment and knowingly making a false report.

The Illinois Human Rights Acts was also amended to require the Illinois Department of Human Rights to create a sexual harassment hotline by February 16, 2018. The hotline will provide individuals with a way to anonymously report sexual harassment. The hotline will also connect callers to counselors or other resources, assist in the filing of sexual harassment complaints and it may recommend that an individual seek the advice of an attorney.

If you have questions about this new Law and how it may affect you call Joe Messer at 312-334-3440 or write Joe at   Joe will be glad to discuss the matter with you at no charge.  


Debtor Notices - The Latest FDCPA Entrapment Mechanism for Collection Agencies and Law Firms

Questions to and answers from Joe Messer regarding Debtor Notices and how to deal with them.


We’ve heard that notices from debtors are creating real problems for collection agencies and law firms.  Fill us in on what’s happening.

Consumer attorneys are always looking for ways to nab defendants.  Many consumer firms are “mills”, which are looking for a steady diet of lawsuits. Over the years they’ve come up with ways to supply themselves with new claims. Historically consumer firms have given scripts to debtors to try to get collectors to say things which violate the Fair Debt Collection Practices Act (FDCPA).  This has become known as “call baiting”.  For example, the debtor would ask “Could I go to jail if I don’t pay”? “Could I lose my house?” “Will I get sued if I don’t pay?” etc.

The latest trend is written notices, sent on behalf of debtor clients, or prepared by the attorneys and sent by the debtors.  These are the trickier notices since alarms usually go off when attorney letters are received, but not necessarily when letters come from debtors.


What types of notices are your clients receiving?

The age old trick is the one liner from a consumer:  “I refuse to pay”.  Or sometimes those words are buried in a long letter with gobble gook text.  The problem with this one is that it triggers Section 1692c, which requires collectors to cease communications.  Section 1692c reads in relevant part:

If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except—

(1) to advise the consumer that the debt collector’s further efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or

(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.

This one is a little easier for a collection law firm to respond to because the firm can respond by sending the debtor notice that they intend to file suit, provided they would normally do so on such an account.  The collection law firm should then file suit.  But if they wouldn’t normally do so – say because the debt was too small - it could be risky to take the course of action.

Another letter that we’ve seen (orchestrated by the RC Law Group) comes from the debtor and reads as follows:

To Whom It May Concern:

I dispute the [insert name of law firm] collection account on my credit report that has a balance of $2075.00 and an open date of 4/26/2016 and refuse to pay this account.

This one sets up a § 1692c claim by stating that the debtor refuses to pay the account.  But more importantly if the law firm has reported the account to a credit reporting agency it sets up a possible “false, deceptive or misleading representation” claim under § 1692e(8).  That section reads in relevant part:

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

RC Law Group will then have the debtor check their credit report and file a lawsuit if the law firm hasn’t reported the debt as disputed.  This one is like shooting fish in a barrel. 

There are various variations on this, all available online.  Just Google “letter to stop debt collectors” and you will find one that states in relevant part:

Dear Collector: I am writing to request that you stop calling me. The federal law requires you to cease all communication with me after being notified in writing that I no longer wish to communicate with you (Fair Debt Collection Practices Act [FDCPA] Section 805(c): CEASING COMMUNICATION). I demand that you stop calling me at home, at work, on my cell phone and at any other location.

This one clearly triggers § 1692c, which requires the collector to cease communications.   

But what if it said only “I demand that you stop calling me at work and on my cell phone”, but doesn’t demand that you stop calling them.  Can you call them at home? Yes, if the letter doesn’t contain any other cease and desist language.  What if they don’t have a home number and only a cell phone?  This is dicey.  To be safe I’d stop calling them and file a collection lawsuit.

Buried in another letter is the statement:

“Do not call me at work.”

This could be an attempt to set up a claim under §1692c(a)(3), which states in relevant part:

Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt—

(3) at the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.

Personally I don’t think “Do not call me at work” would trigger liability for a collector who called the debtor’s place of employment.  But a letter which states “I’m not allowed to take personal calls at work. Do not call me at work” would trigger liability under §1692c(a)(3) for a collector who called the debtor’s place of work after receiving such a letter.

Notices triggering liability under §1692c(a)(3) don’t need to be in writing.  Once the collector learns that the debtor’s employer prohibits the debtor from receiving calls at work – however they learn that – the collector will have liability for making such a call.


What are Plaintiff’s attorneys trying to achieve?

A constant stream of claims which allows them to make $3,000 to $5,000 or more per hit, with very little effort on their part.


Is there a way to spot these notices?

 Centralize your incoming mail and train a smart person who will read all letters thoroughly how to spot trick letters and bring them to the attention of those in your organization who know how to respond to them. There should be at least one back up for this person so the wheels don’t fall all when they are on vacation or out sick.

Try to reduce the various ways debtors can communicate with your organization.  Do you really need a general email?  For some reason faxes are problems.  They end up in “scan files” and don’t roll off the machines like they used to.  So they get missed.  If you are going to keep fax lines your people need to religiously police them for incoming notices.


What should our member law firms be doing about them?

Obviously respond appropriately, but share the notices you are regularly receiving with other member firms.  Or maybe let NARCA know about them so they can announce the problem.  It’s not uncommon for one of our clients to receive 15 to 20 identical letters a day.  Obviously these are being orchestrated by a consumer law firm.  Wouldn’t it be nice to have a heads up ahead about these letters ahead of time?  If they were to be announced on a NARCA listserve this might be helpful.


What if a law firm misses a notice?  Is there a way to avoid FDCPA liability?

Yes. That’s where the FDCPA’s bona fide error defense comes in.  Under §1692k(c):

A debt collector may not be held liable in any action brought under the FDCPA if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.


Have there been any important case law developments in this area?

Yes.  Recently the U.S. District Court for the Eastern District of Virginia ruled in favor of the collector in Keonte Gathers v. CAB Collection Agency, Inc. 3:17-cv-261-HEH. The plaintiff, represented by RC Law Group, had sent the collector a dispute letter and subsequently examined her consumer report and found that the collector hadn’t reported the debt as disputed.   Following Spokeo the Court held that the Plaintiff had failed to allege a concrete injury-in-fact sufficient to confer Article III standing.  The Court dismissed the complaint with leave to re-plead.

Also in Gebhard v. LJ Ross Associates, Inc. (Case No. 15 -2154 U.S. Dist. Ct. New Jersey) the court ruled in favor of a debt collector who received a cease and desist letter at 9:58am, and hadn’t processed the letter before a collector called the debtor at 10:10am that same day.   Obviously this is a unique situation, but a case that may help collectors in similar “close call” situations.


Can you give us a road map for trying to avoid these problems?

Limit points of outside contact.

Have good, well trained people respond to letters.

Give them the authority to follow-up to make sure the agency is properly responding.

Implement written, well thought out procedures for processing and reacting to notices so in case a mistake is made the agency can assert the bona fide error defense.

If you are dead in the water don’t waste time.  Settle the case as quickly and inexpensively as possible.  If, however, you should win, don’t pay ransom to settle the lawsuit.  Otherwise you can expect to be sued time and time again on the same type of claim. 

Colorado Fair Debt Collection Practices Act Expands to Cover Debt Buyers

The Colorado Fair Debt Collection Practices Act (FDCPA) has been extended until Sept. 1, 2028, and debt buyers will be classified as collection agencies under Colorado law S.B. 216.

The revised law will apply to debt buyers for consumer debts sold or resold on or after Jan. 1, 2018. Debt buyers, which were previously undefined in the state act, will now be classified as “a person who engages in the business of purchasing delinquent or defaulted debt for collection purposes, whether it collects the debt itself, hires a third party for collection, or hires an attorney for litigation in order to collect the debt.” Debt buyers remain exempt from the act’s bond requirements so long as the debt buyer does not provide third-party collection services.

The law also establishes requirements for any legal actions on purchased debts. A debt collector or collection agency is now required to attach “a copy of the contract, account-holder agreement, or other writing from the original creditor or the consumer evidencing the consumer's agreement to the original debt.” A copy of a redacted itemization of charges must be attached for medical debts.

If no written evidence is available, the debt collector is required to attach to the complaint a copy of the document provided to the consumer while the account was active, demonstrating that the debt was incurred by the consumer or, for a credit card debt, the most recent monthly statement recording a purchase transaction, payment, or balance transfer.

A debt collector or collection agency must also attach a copy of the assignment or other writing establishing that the debt buyer is the owner of the debt, and a complete chain of title for debts that were assigned more than once.

The revised law also requires a plaintiff to file evidence with the court satisfying the state's evidentiary rules. An affidavit is insufficient to meet the new documentation requirements for legal actions. The evidence must establish the amount and nature of the debt, including the original account number and creditor at charge-off; the amount due at charge-off; an itemization of post charge-off interest (if any); the date of the last payment or transaction; and the date the debt was incurred (unless the account is a revolving credit account).

Additionally, the new law clarifies that a two-year statute of limitations applies to administrative actions to enforce liability and a one-year statute applies to private actions by consumers


U.S. Supreme Court Declines Time-Barred Debt Appeal

On May 22, 2017, the U.S. Supreme Court declined an appeal by Domick Nelson regarding a dismissed suit against debt collector Midland Funding, LLC.

Nelson filed for Chapter 13 bankruptcy protection in February 2015. The following month Midland filed a proof of claim seeking payment of $751.87 in unpaid credit card debt. The credit card had not been used since November 2006, almost a decade earlier, and was outside the statute of limitations for debt collection in Missouri. Nelson filed a class action suit against Midland in April 2015, accusing it of violating the Fair Debt Collection Practices Act by seeking collection on time-barred debts. The  District Court dismissed the lawsuit that August.

Nelson appealed the decision with the Eight Circuit, but it was affirmed in September of 2016. Nelson then appealed the Eight Circuit’s decision to the Supreme Court, citing a conflict between the consumer protection and bankruptcy law, but the Supreme Court declined to take up the case.

Supreme Court Rules That Filing An Out-Of-Statute Proof Of Claim in a Bankruptcy Case Does Not Violate the FDCPA

Reversing the Eleventh Circuit Court of Appeals decision in Midland Funding, LLC v. Johnson, No. 16-348, the U.S. Supreme Court ruled 5-3 on May 15, 2017, that a debt collector does not violate the FDCPA by filing a proof of claim on a debt that is barred from collection by the statute of limitations. The question in Midland Funding was whether a debt collector’s filing of a proof of claim indicating the limitations period has run out is a prohibited act under the Fair Debt Collection Practices Act.  The high court concluded it is not, holding “[t]he filing of a proof of claim that is obviously time barred is not a false, deceptive, misleading, unfair, or unconscionable debt collection practice within the meaning of the Fair Debt Collection Practices Act.” 

Justice Stephen Breyer, writing for the Court’s majority, explained that, “[t]he law has long treated unenforceability of a claim (due to the expiration of the limitations period) as an affirmative defense.”  Accordingly, the court concluded that there is “nothing misleading or deceptive in the filing of a proof of claim” that follows the structural features of the bankruptcy claims resolution process, including the trustee’s objection for a claim’s untimeliness as an affirmative defense.  The Court also pointed out that the filing a time-barred claim is not “unfair” or “unconscionable” under the FDCPA because the protections in a bankruptcy proceeding serve to minimize risk to debtors.  

Justices Sotomayor, Ginsburg and Kagan, filed a dissenting opinion.  Justice Neil Gorsuch did not participate in the decision because he was not on the Supreme Court when oral arguments were held in January. 

Class Action Lawsuit Against Employment Background Screening Firm Highlights Compliance Concerns for Consumer Reporting Agencies

A recent class action Fair Credit Reporting Act lawsuit filed against the employment screening service firm InfoMart Inc. highlights important compliance concerns for Consumer Reporting Agencies.  The lawsuit is Robert Mills II v. Infomart Inc., filed in the U.S. District Court for the Northern District of West Virginia as case number 3:17-cv-00048.

Defendant Robert Mills claims he was denied a job because of false information provided by pre-employment screening service InfoMart Inc.  Mills says that when he applied for a job in 2015, InfoMart reported a civil judgment that had been entered against him in 2010 when he was on active military duty, but failed to mention in the report that it had been vacated. He further claims InfoMart Inc. also reported a criminal record belonging to a different Robert Mills. 

The FCRA requires consumer reporting agencies to (a) notify job applicants if they report adverse public records to an employer to give the applicant time to correct false information, or (b) maintain strict procedures designed to ensure that the information is always complete and up-to-date.  Mills claims InfoMart did neither of these things.

“Defendant failed to comply with the contemporaneous notice requirement ... because it sent plaintiff no notice when it reported this information,” Mills wrote. “And defendant entirely failed to report the complete up-to-date criminal and civil-judgment records — it did not and systemically does not obtain full personal identifiers with its criminal records and does not obtain up-to-date dispositions for its civil record.”

Mills applied for the job in early 2015, and says he was denied the job soon after InfoMart completed the background check in late April of that year. Mills claims he then wrote to InfoMart in December and asked for his file which is when he found out about the allegedly erroneous information.

Under the FCRA consumer reporting agencies are required to disclose the sources of the information they report.  Mills claims InfoMart failed to comply, acting as if they had gathered the information themselves when in fact it actually was acquired from TransUnion.

Mills alleged “Defendant is aware of its obligations under the FCRA, but chooses not to comply because the costs of compliance would harm its bottom line and impair its business model”. “Discovery will show that defendant routinely fails to reveal its true sources of public-record information, like TransUnion, in its FCRA file disclosures. It makes this choice despite the clearly worded requirement in the FCRA that [consumer reporting agencies] reveal the sources of the information they report.”

This lawsuit points out two compliance issues for consumer reporting agencies:

1.  CRAs who issue reports for employment purposes need to have systems in place to (a) notify job applicants if they report adverse public records to an employer to give the applicant time to correct false information, or (b) maintain strict procedures designed to ensure that the information is always complete and up-to-date.  In our experience the second alternative is problematic since it is can be difficult to establish and prove.

2.  All CRAs need to disclose the sources of the information they report when making file disclosures to consumers. 

For more information or to discuss FCRA compliance issues contact Joe Messer at (312) 334-3440 or

Supreme Court Justices Struggle With Terms In Case Which Will Decide If Debt Buyers Are Regulated As Debt Collectors Under The FDCPA

On April 18, 2017 the U.S. Supreme Court heard oral arguments in a case that could determine whether banks that purchase defaulted debt are regulated as debt collectors under the Fair Debt Collection Practices Act. The case is Henson et al. v. Santander Consumer USA Inc., case number 16-349, in the Supreme Court of the United States.

Santander was accused in a 2012 class action of violating the FDCPA by misrepresenting its authority to collect the debt, the amount of the debt owed and by communicating directly with consumers it knew were represented by counsel.

Santander moved to dismiss the case on the grounds that it did not qualify as a debt collector under the statutory definition because it had purchased the defaulted debt it was seeking to collect.  The district court agreed. The Fourth Circuit upheld the dismissal, and the consumers filed their petition for a hearing before the Supreme Court soon after. The consumers argue that Santander should be considered a debt collector even though it purchased the defaulted auto loans. Santander argues that because it owns the debts it should be treated as the original creditor and thus be exempt under the FDCPA.  

The FDCPA provides an exemption from its consumer protections, including restrictions on when third-party collectors can contact people to collect on debts, for banks that collect on loans that they issue. The Plaintiffs' attorney argued, however, that a debt buyer is like a debt servicer to whom a debt has been assigned for collection which Congress intended to be treated as a debt collector when it obtained that assignment after the debt was in default.

Justice Samuel Alito was skeptical of this reading of the FDCPA, stating that the statute’s language saying that its protections apply to third-party firms that collect on debt “owed or due another” clearly argued for Santander and similar firms to be exempted.  “You’re really going uphill on that. You need something really strong to overcome that, I would say,” Justice Alito said. 

Justice Elena Kagan, had similar trouble with the Plaintiffs' argument, given the the use of the word “owed” in the statutory exception to classification as a debt collector. “My problem when I think about this word is that I can never get it to mean what you want it to mean, no matter ... how I construct a sentence,” Justice Kagan said.

Chief Justice John Roberts conceded that Congress could not have contemplated the changes that have come to the debt collection industry when it wrote the FDCPA, seeming to indicate that that would be something that he would weigh.  “The industry has evolved in a way that has — has raised these sorts of questions,” he said. “This is not something that Congress was addressing.”

While the Plaintiffs' attorney spent much of his time trying to explain how the debt collection industry has changed, the Defendant's attorney argued that the FDCPA includes an exception for servicers that applies to debt that has not yet defaulted, and that should apply to servicing of loans that were transferred to another owner while in default.

But Justice Kagan had a problem  with that argument, asking: “What happened in between the time when your client serviced the debt and the time when your client purchased the debt that in any way changed its relationship with the borrower such that Congress wouldn’t be concerned any longer with its behavior?” 

We will monitor the Supreme Court's docket and update this blog when the Court issues its decision.  


CFPB Sues Ohio Law Firm for Illegal Debt Collection Practices

The Consumer Financial Protection Bureau filed a lawsuit April 17, 2017 against Ohio law firm Weltman Weinberg & Reis Co., LPA for allegedly engaging in illegal debt collection practices in violation of the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The case is Consumer Financial Protection Bureau v Weltman Weinberg & Reis Co, LPA, case number 1:17-cv-00817, in the U.S. District Court for the Northern District of Ohio.

The CFPB alleged that Weltman sent collection letters and made phone calls falsely implying that lawyers had reviewed a consumer’s account to determine that the debt was actually owed. The letters were sent on firm letterhead that included the phrase “ATTORNEYS AT LAW,” and included Weltman Weinberg & Reis on the signature line along with a detachable slip indicating that payments should be sent directly to the firm. The CFPB argued that these representations gave the false impression that the debt was being reviewed by an attorney, despite the vast majority being created through an automated process. According to CFPB director Richard Cordray, “Debt collectors who misrepresent that a lawyer was involved in reviewing a consumer’s account are implying a level of authority and professional judgement that is just not true.” The CFPB also alleged that this misrepresentation was occurring when Weltman identified itself as a law firm while making collection calls.

Weltman Weinberg & Reis disagree that any of their practices are in violation of the FDCPA or Dodd-Frank. Scott Weltman, the law firm’s managing partner, was quoted in a legal publication as saying that the lawsuit “is the result of our firm’s refusal to be strong-armed into a consent order.” “We are a law firm that is legally allowed, under federal and state law, to provide collection and legal services,” Weltman said in a press release. “We are being truthful with consumers and factually accurate when we use our name and our company’s letterhead for proper debt collection activity.”

The National Creditors Bar Association (“NARCA”) has issued the following statement regarding the CFPB’s lawsuit against the Weltman firm: “The absence of clear rules by the Bureau that align with state bar and judiciary requirements creates inherent conflicts between what we are required to do as attorneys and what the CFPB believes the rules should be. Regulation of the practice of law through enforcement activities ineffectively addresses the improvement of communications between consumers and attorneys”.

At Messer Strickler, Ltd. we agree that the CFPB’s practice of rulemaking through litigation is unreasonable and unfair.  We commend the Weltman firm for taking a stand and defending their collection practices.  Contact Joe Messer with any questions or comments.

Federal District Court in Illinois Applies “Discovery Rule” to FDCPA Claim

On March 27, a Federal District Court in Illinois denied a motion to dismiss a Fair Debt Collection Practices Act (FDCPA) case in which the defendant argued that the lawsuit had been filed after the expiration of the FDCPA's one year statute of limitations.  In the case Skinner v. Midland Funding, LLC (Case No 16-4522, U.S. District Court, ND, IL) the Court held that the “Discovery Rule” applied and that the statute of limitations didn't begin to run until the plaintiff “discovered” the alleged violation, rather than from the date the activity which was alleged to have violated the FDCPA had occurred. A copy of the Memorandum and Order can be found here.

Plaintiff, Lisa Skinner, filed a complaint against Midland Funding, LLC and Midland Credit Management, Inc. on April 21, 2016. Skinner alleged that her debt had been sold to Midland Funding. Between March 2014 and January 2015 Midland charged interest on the debt. Beginning in February 2015, Midland stopped charging interest, but continued to charge for the interest that it had previously applied. Skinner alleged that Midland had violated the FDCPA by charging interest, and that it misrepresented the amount and character of the debt to credit reporting agency Equifax.

Midland argued that Skinner’s claims were barred by the FDCPA's one-year statute of limitations because the interest charges had been appliedin 2014 and early 2015. Skinner responded by arguing that she didn’t discover the FDCPA violations until August 2015, less than a year prior to filing of the suit.

Judge Alonso of the U.S. Court for the Northern District of Illinois found there was no precedent indicating that the discovery rule did not to apply to claims brought under the FDCPA. Judge Alonso found that although there is no explicit evidence of when Skinner became aware of the alleged inaccurate debt reporting, it could be inferred from an August, 2015 credit report that she became aware of the report then. Accordingly Judge Alonso denied the motion to dismiss by Midland Funding, LLC and Midland Credit Management.

Collection Law Firm Which Served Consumer Represented by Attorney Does Not Qualify For FDCPA Bona Fide Error Defense

A Federal District Court ruling on March 24, 2017 barred a debt collection law firm from raising the bona fide error defense when it served legal documents on a consumer whose attorney had not filed a notice of representation with the court.  The case is Holcomb v. Freedman Anselmo Lindberg, LLC (U.S. Dist. Ct. N.D. IL Case # 15 C 1129).  The consumer’s attorney had written a letter informing the debt collection law firm that he represented the consumer; appeared twice in court on behalf of the consumer; and was noted in the debt collection law firm’s notes as the consumer’s attorney. The court held that the debt collection law firm knew the consumer was represented by an attorney and intentionally sent the court filings to the consumer. 

This decision shows how important it is for collectors to have systems in place to flag the accounts of consumers represented by attorneys and to thereafter only communicate with those consumer's attorneys.  For more information or to discuss FDCPA compliance contact Joe Messer at (312) 334-3440 or 

7th Circuit Rules Collector Misled Consumer About Time Barred Debt

On March 29, 2017, the Seventh Circuit Court of Appeals in Pantoja v. Portfolio Recovery Associates, LLC (case number 15‐1567) affirmed a ruling that debt collector Portfolio Recovery Associates had violated the Fair Debt Collection Practices Act in its efforts to collect an old consumer debt, finding the letter it sent to the debtor failed to clearly communicate that the debt was time barred (i.e., past the statute of limitations). 

In this precedential ruling, the three-judge appellate panel found that the lower court was correct to grant summary judgment in favor of Manuel Pantoja, who sued Portfolio Recovery Associates after receiving a collection letter seeking payment on a 20-year-old debt which Portfolio Recovery had purchased from Capital One.  The FDCPA prohibits collectors of consumer debts from using any “false, deceptive, or misleading representation to collect debts,” including those like the one incurred by Pantoja, which had a statute of limitations for recovery that had long since expired.

In January of 2015 an Illinois district judge ruled that the letter sent by the debt collector was deceptive or misleading because it did not tell Pantoja that the company could not sue on the time‐barred debt, and it didn’t inform the consumer that if he made or agreed to make a partial payment on the debt he could restart the clock on the expired statute of limitations.  The Seventh Circuit panel agreed. 

“This letter is an example of careful and deliberate ambiguity,” the panel ruled. “The carefully crafted language, chosen to obscure from the debtor that the law prohibits the collector from suing to collect this debt or even from threatening to do so, is the sort of misleading tactic the FDCPA prohibits.”  The only reason to use such “carefully ambiguous language,” the panel continued, “is the expectation that at least some unsophisticated debtors will misunderstand and will choose to pay on the ancient, time‐barred debts because they fear the consequences of not doing so.”

The panel also faulted Portfolio Recovery for not making it clear to Pantoja that if he agreed to settle the debt by paying a portion of it off  he would lose the protection of the statute of limitations. "We assume that a few consumer debtors, even if they know the debt can never be collected in a lawsuit, might choose to pay an asserted debt based on a sense of moral obligation," the panel stated. "But we believe the FDCPA prohibits a debt collector from luring debtors away from the shelter of the statute of limitations without providing an unambiguous warning that an unsophisticated consumer would understand."

Although the Seventh Circuit did not prescribe exact language for debt collectors to use when writing such letters, the panel did advise that the language should be "clear, accessible, and unambiguous to the unsophisticated consumer," a standard that it concluded that Portfolio Recovery had not met. 

In his lawsuit, Pantoja alleged that he had applied and was approved for a credit card from Capital One in 1993, but he never activated the account or used it for any purpose. Despite the lack of action, Capital One still assessed annual fees, late fees and activation fees against Pantoja’s account, which Pantoja never knew about and never paid.

Portfolio Recovery Associates purchased the debt from Capital One and unsuccessfully attempted in 1998 to collect the debt by phone. Portfolio Recovery renewed these efforts in April 2013, when it sent a collection letter to Pantoja claiming he owed $1,903.15. The letter, which offered several partial payment options that would settle the debt "for good,"  included the disclosure that "because of the age of your debt, we will not sue you for it and we will not report it to any credit reporting agency."

The debt collector claimed that this disclosure was enough to put Pantoja on notice that his debt had expired and he would not be brought to court. But the Seventh Circuit ruled that the language was deceptive and misleading because "it gives the impression that Portfolio Recovery has only chosen not to sue, not that it is legally barred from doing so." The panel noted that the "carefully worded sentence" appeared to have come from a 2012 consent decree between the Federal Trade Commission and debt collector LVNV Funding. Under this decree Portfolio Recovery was required to say “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it.”  But while the second sentence was included in Portfolio Recovery's letter, the panel pointed out that the first wasn't, making its disclosure "vaguer" and ultimately misleading. 

The panel ruled: "The reader is left to wonder whether Portfolio has chosen to go easy on this old debt out of the goodness of its heart, or perhaps because it might be difficult to prove the debt, or perhaps for some other reason." 

This decision creates new law for the states covered by the 7th Circuit (i.e., Illinois, Indiana and Wisconsin) and makes clear how important it is for collectors to have a qualified attorney review their collection letters for compliance before putting them to use.  For further information or have your collection letters reviewed contact Joseph Messer of Messer Strickler, Ltd. at (312) 334-3440 or

Northern District of Illinois Judge Allows Lawsuit Against Vitamin Manufacturer Nature’s Way to Proceed

An Illinois federal judge ruled Tuesday that a class action lawsuit filed against vitamin manufacturer Nature’s Way could proceed. Angel McDonnell alleges that she suffered damages from Nature’s Way misrepresentation of its product as “made in the USA” although the pills contain Vitamin C from primarily foreign sources. The case is McDonnell v. Nature’s Way Products LLC, case number 1:16-cv-05011, in U.S. District Court for the Northern District of Illinois.

District Judge Sara L. Ellis found McDonnell’s claim that she paid a premium for the “made in the USA” label because she is a “patriotic American” was enough to proceed on charges of violations of Illinois’s Consumer Fraud and Deceptive Business Practices Act. Although she did throw out the claim under Illinois’s Uniform Deceptive Trade Practices Act because the law requires proof of continuing harm. This is highly unlikely due to McDonnell now being aware of the alleged misrepresentation by Nature’s Way. Judge Ellis also tossed the claim by McDonnell that Nature’s Way misrepresented other products because she didn’t actually purchase any of those products.

The suit was filed in May after McDonnell says she became aware of the false advertising on Nature Way’s “Alive! Women’s Energy Supplement.” She had purchased the pills in 2013 and 2014, in part because of the “made in the USA” label. The complaint cites a 2015 survey by Consumer Reports that concludes nearly “80 percent of Americans are willing to pay more for American-made goods.” Nature’s Way moved to have the case dismissed in December, arguing that her allegations were overly broad and she suffered no actual damages. Judge Ellis found enough proof was provided by McDonnell, and she has agreed to let the case proceed with a jury trial.

California Fair Employment and Housing Council Rule on the "Consideration of Criminal History in Employment Decisions"

The California Fair Employment and Housing Council (FEHC) has finalized the "Consideration of Criminal History in Employment Decisions" regulation (the "Rule"). The Rule, which is scheduled to take effect on July 1, 2017, will impact employers and consumer reporting agencies. You can review the Rule on the Council's website

The Rule expands items employers are prohibited from considering. Existing prohibitions include:

  • an arrest or detention that did not result in conviction;
  • referral to or participation in a pre-trial or post-trial diversion program;
  • a conviction that has been judicially dismissed or ordered sealed, expunged or statutorily eradicated pursuant to law;
  • arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while a person was subject to the process and jurisdiction of a juvenile court law;
  • any non-felony conviction for possession of marijuana that is older than two years;

The Rule also states that if an employer is considering adverse action, prior to taking final adverse action (i.e. during pre-adverse action) the "employer must give the impacted individual notice of the disqualifying conviction and a reasonable opportunity to present evidence that the information is factually inaccurate." This requires the employer to list the specific criminal conviction(s) that was the disqualifying item(s), differing from the FCRA requirement. This notice is mandated regardless of whether the employer has a bright line assessment, in which there is a specific policy stating that a certain conviction history automatically disqualifies all candidates, or an individualized assessment, in which the employer considers the criminal background of a candidate in concert with all other aspects of the candidate. 

As noted above, the final rule is expected to take effect on July 1. In the meantime, FEHC has scheduled a hearing on March 30 on proposed regulations related to use of criminal background checks in the context of tenant screening.