Stephanie Strickler

MS Obtains Unanimous Jury Verdict in Favor of Clients in FDCPA Case

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On April 8, 2015, a jury of seven sitting in the Southern District of California determined that a law firm and its asset purchaser client did not violate the Fair Debt Collection Practices Act, 15 U.S.C. 1692 et seq. (“FDCPA”) by including a request for 10% interest in the prayer for relief of a state court collection complaint.  In Hadsell v. Mandarich Law Group, LLP and CACH, LLC, a consumer filed an FDCPA claim against the two companies alleging a myriad of false claims, including that the companies had disclosed the debt to third parties and failed to abide by a request to cease and desist. After success on motions to dismiss and summary judgment, the case proceeded to a jury trial on one sole issue: whether a request for 10% statutory interest in the prayer for relief of a state court complaint violates the FDCPA where the credit card contract in question provided for an 8.9% interest rate. Like many consumer law claims against law firms, this complaint was spurred from a state court collection action on the debt. In late 2011, Mandarich Law Group, LLP filed a state court complaint on behalf of CACH, LLC to collect on a defaulted Bank of America account.  The state court complaint had two counts, breach of contract and account stated.  In the prayer for relief, the complaint requested that the court find that a 10% interest apply under the account stated theory.

Approximately 30 days after the state court suit was filed, the consumer filed suit in the U.S. District Court for the Southern District of California, claiming that the collection action, among other activity, violated the FDCPA. Plaintiff was represented by the San Diego law firms of Hyde & Swigart and Kazerouni Law Group.

The Plaintiff’s focal point during the jury trial was that the defendants intentionally violated FDCPA § 1692(f) and (f)(1) by requesting 10% interest when they were aware of the 8.9% interest rate that was set by the initial contract between the consumer and creditor.  Defendants argued, in contrast, that there was a valid factual basis to pursue the account stated claim and for the Court to assess 10% interest--- the default rate under the California Code---- based on the final charge-off statement on the account.  Further, Defendants’ argued that asking the state court to decide the question of interest was not an attempt to collect an authorized amount as the court had the legal ability to award it under the facts.  The jury unanimously agreed and found that no violation of the FDCPA occurred.

Lead trial counsel for Defendants was Nicole M. Strickler of MS&S. For more information on this case or any other FDCPA related issues, contact her at nstrickler@messerstrickler.com or at 312-334-3442.

Second Circuit Adopts FDCPA Least Sophisticated Consumer Safe Harbor Approach Established by the Seventh Circuit

In Avila, et al. v. Riexinger & Associates, LLC, et al., Case No. 15-1584(L), the Second Circuit Court of Appeals applied the least sophisticated consumer standard of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”) to conclude that a consumer cannot be expected to know that a total debt provided in a given statement continues to increase interest or other fees.  The Second Circuit held that when a debt collector issues a notice to a borrower that includes a statement of the complete amount of their debt, the debt collector must either accurately inform the consumer that the amount of the debt stated in the notice will increase over time based upon interest or other fees, or clearly state that the holder of the debt will accept payment of the amount set forth in full satisfaction of the debt if payment is made by a specified date. In Avila, a consumer brought a putative class action against a debt collector for violation of § 1692e of the FDCPA alleging that the practice of disclosing in a collection notice only the “current balance” of the amount owed amounts to “false, deceptive, or misleading” collection practices under the statute.  The consumer alleged that the notice led them to believe that the amount owed was not increasing.  The Second Circuit agreed and held that the least sophisticated consumer could believe that payment in full of the current balance provided in the notice would satisfy the entire debt owed, and that a failure to mention the ongoing accrual of interest and fees was misleading. Further, the Court held that “the FDCPA requires debt collectors, when they notify consumers of their account balance, to disclose that the balance may increase due to interest and fees.”

The Second Circuit also held that Section 1692e requires additional disclosures to ensure that consumers are not misled into thinking that simply paying the “current balance” as listed on the collection notice will always result in full satisfaction of the amount owed. Accordingly, the Second Circuit adopted the “safe harbor” approach established by the Seventh Circuit in Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, & Clark, L.L.C., 214 F.3d 872 (7th Cir. 2000).  The “safe harbor” doctrine allows a debt collector to prevent liability under Section 1692e “if the collection notice either accurately informs the consumer that the amount of the debt stated in the letter will increase over time, or clearly states that the holder of the debt will accept payment of the amount set forth in full satisfaction of the debt if payment is made by a specified date.”

Although the Second Circuit declined to establish the exact language of any disclosure that a debt collector must use to sidestep a possible FDCPA violation, the Court expressed that the language proposed in Miller, 214 F.3d, at 876, would certainly qualify a debt collector for treatment under the newly-created safe-harbor.

Debt collection agencies, or those that act as debt collectors, should pay particular attention to the language of Miller that the Second Circuit suggests will satisfy the newly-recognized safe harbor provision. For information on revising statements to consumers to comply with the safe harbor language, or for other information regarding this topic, contact Stephanie Strickler at 312-334-3465 or at sstrickler@messerstrickler.com.

Debt Collector Succeeds with FDCPA Bona Fide Error Defense

The United States District Court for the Southern District of Alabama recently granted a Motion for Summary Judgment in favor of a defendant debt collection agency.  In Robert L. Arnold v. Bayview Loan Servicing, LLC, et al., the plaintiff filed suit against the collection agency for multiple FDCPA violations.  Arnold fell behind on his mortgage payments and declared bankruptcy in 2012, under which the judge granted a discharge for the mortgage.  In January 2013, Arnold received written notification that the mortgage loan servicing had been transferred to Bayview.  Bayview was well aware of the default and that the debt had been discharged in bankruptcy.  Upon receipt of the account, Bayview started the foreclosure process, and purchased the property for most of the amount of the outstanding principal on Arnold’s loan.  While the account was properly coded in Bayview’s system upon transfer, and no billing statements were produced, in December 2013, ten months after the transfer, two billing statements were sent to Arnold.  The statements reflected the outstanding balance; they did not reference the bankruptcy discharge, and they did not reference a credit for the foreclosure sale.

Bayview sought summary judgment based solely on the bona fide error defense.  To succeed on this defense, Bayview must show “a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such an error.”  This defense is not available for mistakes of law or misinterpretations of the FDCPA, but instead “to protect against liability for errors like clerical or factual mistakes.”  See Edwards v. Niagara Credit Solutions, Inc.

The court found Bayview sufficiently demonstrated that the December 2013 mailings were unintentional based on the following:

  1. Arnold’s loan had been coded with a foreclosure man code when Bayview assumed servicing responsibilities, effectively suppressing all billing statements;
  2. Bayview sent no billing statements to Arnold between February 2013 and November 2013;
  3. The Bayview employee who performed a pre-foreclosure review of Arnold’s loan was bound to follow a Bayview checklist that did not call for changing the man code or issuing billing statements;
  4. Nothing in the checklist or employee comments suggested that this individual intended to change the man code or reactivate Arnold’s loan;
  5. The man code was changed anyway, even though Bayview had no reason to do so in its pre-foreclosure review;
  6. Bayview ceased communications to Arnold when it discovered the error; and
  7. Bayview provides extensive, ongoing training to employees in the area of FDCPA compliance.

The Court also concluded that Bayview’s violation was in good faith in that it properly relied on the foreclosure code to suppress monthly statements to Arnold, and that it had no reason to believe that the man code would be changed during the pre-foreclosure review process.  Furthermore, Bayview had provided appropriate training and checklists to its employees concerning pre-foreclosure review.

Finally, the Court also concluded that Bayview maintained policies and procedures to avoid readily discoverable errors.  Bayview had general training procedures and specific procedures for pre-foreclosure review.  It also had ongoing FDCPA compliance training for its employees.

This case demonstrates the importance for debt collection agencies to have clear policies and procedures for FDCPA compliance, as well as ongoing training to reinforce the implementation of these policies and procedures.

For more information on this topic or questions regarding your FDCPA policies and procedures, please contact Stephanie Strickler at sstrickler@messerstrickler.com or at 312-334-3465.

Middle District of Florida Denies Class Certification in Time Barred Debt FDCPA Case Based on Ascertainability & Predominance

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The facts of the case were simple. Plaintiff received a collection letter offering to “settle” her time-bared debt for a reduction in the balance. She filed sued alleging 15 U.S.C. §1692 et seq. (“FDCPA”) violations as the letter did not disclose the debt’s time-barred nature. Plaintiff moved for class certification seeking to represent a class of similarly situated letter recipients. However, despite the simple nature of the alleged violation, complexities nevertheless prevented class certification.

The court first discussed the class action ascertainability prong that must be satisfied as part of Federal Rule of Civil Procedure (“FRCP”) 23(a). The court noted that only letters seeking to collect “consumer” debts (i.e. those incurred for personal, family, or household purposes) could be included in a class seeking relief under the FDCPA.  As such, an initial question that must be answered is whether plaintiff could ascertain whether the debts at issue were “consumer debts.” The court explained that a plaintiff could not establish ascertainability, a necessary requirement for a class action, simply by asserting that class members could be identified using defendant’s records. Plaintiff must actually establish that the records are in fact useful for identification purposes and that identification would be administratively feasible.

The issue for plaintiff was that she relied on her bare assertion that certain records would reveal the nature of the proposed class members’ debts without actually explaining those records. In contrast, defendants provided actual evidence to controvert this conclusion in the form of declarations attesting to the fact that defendant’s records did not show the reasons for which each proposed class member’s debt was incurred. Moreover, Plaintiff introduced no evidence that demonstrated how the original creditor’s records showed the nature of the debt or even whether the original creditor still possessed transactional information for the accounts.

The second barrier to class certification was in establishing the predominance prong of FRCP 23(b)(3). The court agreed that the debts of persons meeting the proposed class definition were not necessarily time-barred and such a determination would require an individualized inquiry into the statute of limitations on each debt.  The court explained that many factors must be considered when determining the expiration of a limitations period, such as the char-off date, tolling issues, revival issues, and any actions between the debtor and creditor that may have modified their original agreement. In short, the court found these inquiries too individualized and detailed to meet the predominance prong.

Recently, time-barred debt has been a “hot topic” with not only the consumer bar but also with federal and state agencies tasked with consumer financial regulation. For more information on this topic, and other consumer financial issues, contact Nicole Strickler at nstrickler@messerstrickler.com or direct at 312-334-3442.

Third Circuit Rules “Regular Users” of Residential Telephone Lines Can Sue under the TCPA

The Third Circuit Court of Appeals recently decided that a “regular user” of a residential telephone has standing to sue under the Telephone Consumer Protection Act (“TCPA”).  In Leyse v. Bank of America National Association, the plaintiff answered a prerecorded telemarketing call from Bank of America on a residential landline shared with his roommate.  The roommate was the telephone number subscriber and the intended recipient of the call. The Third Circuit reversed the lower court’s dismissal of the case disagreeing with the lower court judge’s finding that only the “intended recipient” of a robocall is a “called party” for purposes of the law.  Judge Fuentes of the Third Circuit wrote, “If the caller intended to call one party without its consent but mistakenly called another, neither the actual recipient nor the (uninjured) intended recipient could sue, even if the calls continued indefinitely.  We doubt Congress meant to leave the actual recipient with no recourse against even the most unrelenting caller.”

The TCPA restricts telephone solicitations and the use of telephone equipment.  The TCPA makes it unlawful “to initiate any telephone call to any residential telephone line using artificial or prerecorded voice to deliver a message without the prior express consent of the called party” except in emergencies or circumstances exempted by the Federal Communications Commission.

The plaintiff in Leyse still has the burden of proof to demonstrate that he answered the telephone when the robocall was received.  This ruling could greatly expand the scope of potential liability for errant calls.

For more information on this topic, contact Stephanie A. Strickler at 312-334-3465 or sstrickler@messerstrickler.com.

Employer Alert - To What Extent Do Employees Have the Right to be Accommodated with Respect to Their Religious Beliefs?

Employees refusing to do their job duties based upon religious beliefs have been a trending topic in the news recently.  For example, Kim Davis, a county clerk in Kentucky, gained national media attention when she refused to issue marriage licenses after the U.S. Supreme Court ruled that the right to marriage is guaranteed to same-couples by the Fourteenth Amendment. In the midst of the news stories surrounding the Kim Davis controversy, another employee filed a federal lawsuit based upon her employer placing her on administrative leave due to her religious beliefs inhibiting her ability to perform her job duties.  Charee Stanley, a Muslim flight attendant for ExpressJet Airlines, was recently placed on administrative leave after she refused to serve alcohol for religious reasons.  Stanley began her employment prior to converting to the Muslim faith.

Stanley asked her supervisor for a religious accommodation, i.e., having one of her colleagues serve the alcohol while she did another job duty.  The supervisor agreed.  The accommodation worked for a while, until one of her colleagues filed an internal complaint against Stanley claiming she was not doing her job because she refused to serve alcohol.  Subsequently, the airline revoked the religious accommodation and placed her on administrative leave without pay for 12 months - “after which her employment would be administratively terminated.”

Stanley is now seeking redress from the EEOC.  Stanley claims she was disciplined for following the direction of her employer and that her employer had no justification to revoke her religious accommodation.  Stanley’s position is that ExpressJet acknowledged serving alcohol was “not an essential duty or function of flight attendant” by granting the religious accommodation and the fact that the revoked the accommodation is in violation of Title VII of the Civil Rights Act of 1964.

While employers should be mindful and knowledgeable about their duties when it comes to accommodating employees based on religious beliefs, employers also need to be aware of their rights.  Title VII provides that an employer must reasonably accommodate an employee’s religious beliefs and practices unless doing so would cause “undue hardship on the conduct of the employer’s business.”  The U.S. Supreme Court has ruled that “undue hardship” means that an employer need not incur more than minimal costs in order to accommodate an employee’s religious practices.  The EEOC has interpreted “undue hardship” to mean that an employer can show that a requested accommodation causes it an undue hardship if accommodating an employee’s religious practices requires anything more than ordinary administrative costs, diminishes efficiency in other jobs, infringes on other employees’ job rights or benefits, impairs workplace safety, causes coworkers to carry the accommodated employee’s share of potentially hazardous or burdensome work, or if the proposed accommodation conflicts with another law or regulation.

Accordingly, religion is not an automatic ticket employees can use to avoid certain job duties.  There are limitations and employers need to be aware of their rights under Title VII.

For more information on this topic, contact Stephanie Strickler at 312-334-3465 or sstrickler@messerstrickler.com.

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Sixth Circuit Expands the Definition of “Person” Under the FDCPA

The Sixth Circuit recently made a ruling which expanded the definition of “person” under the FDCPA to include artificial entities such as corporations or limited liability companies for purposes of 15 U.S.C. § 1692k.  In Anarion Investments LLC v. Carrington Mortgage Services, LLC et al., the district court dismissed the complaint on the basis that plaintiff, a limited liability company, was not a “person” under the FDCPA and could not recover under the statute’s civil liability provision.  This provision states that a debt collector who fails to comply with the FDCPA “with respect to any person is liable to such person.”  On appeal, the Sixth Circuit decided that under this provision, the term “person” includes artificial entities and natural persons.  The Sixth Circuit relied on the federal dictionary for the definition of “person” which includes artificial entities unless the context indicates otherwise.  The Sixth Circuit clearly ignored the FDCPA’s statutory purpose as the FDCPA’s legislative history and purpose to protect natural persons from abusive debt collection practices clearly “indicates otherwise” so as to not include artificial entities. Despite expanding the definition of “person” under Section 1692k, the Sixth Circuit’s opinion is unlikely to make a large impact because the FDCPA only applies to consumer debts - those incurred for personal, family, or household purposes.  Nonetheless, this type of ruling is troublesome as it demonstrates the unpredictability of court’s interpretations of even those terms that are defined within the statute.

For more information on this topic, contact Stephanie A. Strickler at 312-334-3465 or at sstrickler@messerstrickler.com.

 

 

Request for Fees Not Yet Incurred In Complaint Violation of FDCPA

The Third Circuit Court of Appeals recently concluded that a demand for a specific amount of attorneys’ fees in a complaint before the fees have actually been incurred is an “actionable misrepresentation under the Fair Debt Collection Practices Act” (“FDCPA”).  In Dale Kaymark et al. v. Bank of America and Udren Law Offices PC, the plaintiff claimed that an itemized list of total debt in the foreclosure complaint improperly included $1,650 in attorneys’ fees, not all of which had been incurred. The district court dismissed the FDCPA claim on the grounds that legal pleadings were not subject to the section of the FDCPA at issue. On appeal, the Third Circuit was not persuaded that formal pleadings filed by attorneys are exempt from the FDCPA’s requirement that debt collectors must not use any "false, deceptive or misleading representation or means in connection with the collection of any debt." Instead, subject to very limited and express exceptions, "all litigation activities, including formal pleadings, are subject to the FDCPA." When drafting demand letters and complaints, creditors must be cautious when demanding fees from the debtor which the creditor has not yet incurred.  Although creditors are not barred from listing an estimate of anticipated fees in their demand letter or complaint, they must do so explicitly. Otherwise, the debtor might assume that the amounts listed as “due” are, in fact, due as of a particular date.

For more information on this topic, contact Stephanie Strickler at 312-334-3465 or sstrickler@messerstrickler.com.

Window to Apply for FCC’s Retroactive Solicited Fax Opt-Out Waiver Closing

On October 30, 2014, the Federal Communications Commission (“FCC”) released an Order requiring opt-out notices to be presented on all fax advertisements, conforming to the rules outlined in the FCC’s 2006 Junk Fax Order. To be in compliance with the Order, senders must satisfy all components listed within:

(1)       be clear and conspicuous and on the first page of the ad;

(2)       state that the recipient may make a request to the sender not to send any

           future ads and that failure to comply, within 30 days, with such request is

           unlawful; and

(3)       contain a domestic contact telephone number and fax number for the

           recipient to transmit an opt-out request. Fax ads sent pursuant to an

           established business relationship must also contain this opt-out information.

The opt-out notice must be included in all faxed ads, even those sent with prior express consent. However, the FCC is granting retroactive waivers for those who sent such solicited advertisements up until April 30th, 2015. These waivers are intended to provide temporary relief from past offenders and allow for more time for waiver recipients to come into full compliance with the Order.

Even if your company does not qualify for such a waiver, there are still numerous defenses that can be asserted in a lawsuit such as this. Contact Nicole Strickler at 312-334-3442 or nstrickler@messerstrickler.com for more information about applying for the FCC’s waiver and other consumer litigation compliance issues.

View the Order Here.

Federal Court Determines Voicemail Message and Return Phone Call with an Unintended Recipient Not in Violation of FDCPA

A federal court in New York recently decided that a voicemail message stating that the call was from a debt collector where the voicemail message’s intended recipient was disclosed to a third party who returned the call was not a violation of the Fair Debt Collection Practices Act (“FDCPA”).  In Abraham Zweigenhaft v. Receivables Performance Management, LLC, RPM left the following voicemail message:  “We have an important message from RPM.  This is a call from a debt collector.  Please call 1(866) 212-7408.”  Mr. Zweigenhaft’s son heard the message and returned the call.  He then had the following conversation with the RPM representative: RPM: Thank you for calling Receivables Performance Management on a recorded line. This is Michelle how can I help you?

Caller: Hi how are you? I received a message to call you, and I am just trying to figure out who you are trying to reach.

RPM: Okay and your phone number please, area code first.

Caller: (718) 258-9010

RPM: And is this Abra?

Caller: Is this who?

RPM: Abra Zweigenhaft?

Caller: Nope. It's not.

RPM: Okay let me go ahead and take your phone number off the list. The last four digits again please. 9010 or 7032?

Caller: 9010

RPM: Okay I'll take it off the list. You have a nice day.

Caller: Thank you.

RPM: Uh huh, bye bye.

Zweigenhaft filed suit against RPM alleging that the content of the voicemail message and the phone call together conveyed information regarding the consumer’s debt to a third party, Zweigenhaft’s son, in violation of FDCPA § 1692c(b).  The United States Court for the Eastern District of New York disagreed that this was a violation.  The court recognized the statute’s conflicting provisions.  Debt collectors are required by the FDCPA to meaningfully identify themselves when calling a consumer, but doing so may inevitably convey information about a consumer’s debt, which if overheard by a third party gives rise to consumer arguments that the debt collector violated the FDCPA.  In finding that the communications did not violate the FDCPA, the court stated that if it were to find that the contact was a violation of the FDCPA “would place an undue restriction on an ethical debt collector in light of our society’s common use of communication technology.”

For more information on this topic, contact Joseph Messer at 312-334-3440 or at jmesser@messerstrickler.com or Stephanie Strickler at 312-334-3465 or at sstrickler@messerstrickler.com.

 

Hang Up That Telephone: The Importance of Training Collectors to Properly Receive Attorney Information

Recently, United States Magistrate Judge David D. Noce created an important teaching moment for collectors in Istre v. Miramed Revenue Group, LLC et al, a case pending in the U.S. District Court for the Eastern District of Missouri. In Istre, after collection attempts, the plaintiff allegedly placed a call to the collection agency to inform it that he had retained counsel regarding his debts. At the beginning of the call, plaintiff told the agency that he had retained counsel. Instead of ending the call, however, the agency allegedly asked, “Why are you having a lawyer involved in this?” and, “So how are you going to go about this?” Only after plaintiff again stated that he had retained counsel regarding his debt did the agency request the attorneys’ contact information, which plaintiff immediately provided.

Upon these alleged facts, plaintiff alleged various violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692c(a)(2), d, e and f. Defendants filed a motion to dismiss, arguing that by initiating the call, plaintiff consented to the ensuing discussion about his debt. The court, however, agreed with plaintiff that the mere fact that plaintiff initiated the phone call was not conclusive that he thereby consent to the debt collector to the collection attempt. The court further held that without that consent, once notified of legal representation, defendants may only ask for the attorney’s contact information before ending the call. As a result, the court found that plaintiff properly stated a cause of action under 1692c(a)(2), d, and f. However, it granted the motion with respect to 1692e, finding that no misleading statement had been alleged in the complaint.

The decision shows the importance of dissuading collectors from continuing a telephone call after receipt of attorney information. For a full copy of the opinion, see http://scholar.google.com/scholar _case?case=14559722534209738563&q=istre+v.+miramed+revenue+group&hl=en&as_sdt=400006&as_vis=1.

For more information on this subject, and other consumer litigation compliance information, contact Nicole Stricler, 312-334-3442, nstrickler@messerstrickler.com.

Federal Judge Rules One Voicemail Message Is Not Enough to Sustain FDCPA Violation

In Hagler v. Credit World Services, Inc., a federal judge in Kansas decided that a debt collection agency was not in violation of the FDCPA by failing to identify itself as a debt collector in one voicemail message.  The judge explained that multiple calls must be made in order for “harassment” to occur.

Plaintiff was initially contacted by a Credit World Services employee to discuss the outstanding debt.  Plaintiff informed the employee that he would need to call him back.  After waiting about a month with no contact with Plaintiff, Defendant called Plaintiff and left the following voicemail:

“Hi, this message is for Charles.  Please call Bill Jackson at 913-362-3950 when you get a chance. 

 My extension is like 281.  Thank you.”

Plaintiff sued, arguing that Defendant’s voicemail violated several provisions of the FDCPA.  Specifically, Plaintiff alleges Defendant:

•Failed to disclose meaningfully the caller’s identity, in violation of 15 U.S.C. § 1692d(6);

•Failed to disclose that a debt collector had left the voicemail, in violation of 15 U.S.C. § 1692e(11); and

•Used misleading and deceptive language, in violation of 15 U.S.C. § 1692e.

Plaintiff also claimed that the voicemail message was otherwise deceptive and failed to comply with the provisions of the FDCPA.  Plaintiff and Defendant filed cross-motions for summary judgment on all four claims.

The judge agreed with the collection agency on all four counts.  The judge decided that the voicemail message did not provide a “meaningful” disclosure of the employee’s identity as a debt collector under § 1692d(6) as the employee only provided his name, which has no real meaning to the debtor.  The judge explained further that the employee must provide more about himself than his name to be a “meaningful” disclosure.  However, the judge ruled that a violation requires more than just one call.

Because the clear language of § 1692d(6) prohibits the placement of telephone “calls” without meaningful disclosure, the judge did not agree that this single voicemail message violated the FDCPA.  He supported this finding by citing other district courts who also focused on the plural usage of “calls” in the statute.  See Thorne v. Accounts Receivables Mgmt, Inc., 2012 U.S. Dist. LEXIS 109165 (S.D. Fla. July 23, 2012); Jordan v. ER Solutions, Inc., 900 F. Supp. 2d 1323 (S.D. Fla. 2012); Sanford v. Portfolio Recovery Assocs., LLC, 2013 U.S. Dist. LEXIS 103214 (E.D. Mich. May 30, 2013).

The judge also determined that the debt collector was not in violation of the FDCPA for failing to provide the “mini-Miranda” disclosure.  The judge noted that “in order to ‘convey information regarding a debt,’ a message must ‘expressly reference debt’ or the recipient must be able to infer that the message involved a debt.”  Since the employee did not mention the debt in the voicemail message, the judge did not consider it a debt collection communication under the FDCPA.

Finally, the judge disagreed that the message was misleading.  The employee merely left his name, phone number, and requested Plaintiff call him back.  The judge decided that nothing in the message was intended to mislead the Plaintiff.

For more information on this topic, contact Stephanie Strickler at 312-334-3465 or sstrickler@messerstrickler.com.

Employer Alert! New Illinois Law Requires Accommodations for Pregnant Employees

Effective January 1, 2015, Illinois employers will be required to provide reasonable accommodations to pregnant employees and new mothers.  Women in Illinois who are physically unable to perform certain tasks of their job because of pregnancy will be guaranteed reasonable accommodations.  This new law will cover full-time, part-time and probationary employees, and it will affect employers of all sizes. 

Employers will be required to make reasonable accommodations for conditions related to pregnancy, childbirth, and related conditions, unless the employer can demonstrate that the accommodation would impose an “undue hardship” on the ordinary operation of the employer’s business.  “Undue hardship” is defined by the law as an action that is “prohibitively expensive or disruptive” when considered in light of:  (1) the nature and costs of the accommodation; (2) the overall financial resources of the facility involved in the provision of the reasonable accommodation, the number of employees at the facility, the effect on expenses of the facility, or other impact on the facility; (3) the overall financial resources of the employer with respect to the number of employees and number, type, and location of its facilities; and (4) the type of operations of the employer.  Some examples of accommodations include limits on lifting, longer or more frequent bathroom breaks, access to places to sit, water breaks, private space for breastfeeding, and time off to recover from pregnancy, childbirth and related conditions.

Under the new law, employers will not be able to require an employee to take a leave of absence if another reasonable accommodation can be provided.  Additionally, employers cannot require the employee to accept an accommodation that the employee has not requested.  The laws will also prohibit employers from retaliating against an individual who “requested, attempted to request, used or attempted to use” a reasonable accommodation for pregnancy or childbirth.

This law dds to the existing federal laws Illinois employers are already required to follow providing for employee accommodations, such as the Family and Medical Leave Act, Americans with Disabilities Act and the Pregnancy Discrimination Act.  Illinois employers should take this time to review and revise employee handbooks or policy manuals to reflect the new law.

For more information on this topic, contact Stephanie Strickler at 312-334-3465 or sstrickler@messerstrickler.com

Illinois Enacts “Ban the Box” Law Impacting Private Employers

 

Earlier this year, we discussed the potential for the “Ban the Box” movement to impact private employers in Illinois in 2014.  On July 29, 2014, Illinois Governor Pat Quinn made the movement a reality when he signed into law the Job Opportunities for Qualified Applicants Act (the “Act”).  “Ban the Box” is a movement that eliminates questions about past criminal conduct on initial job applications.  The “box” refers to where an applicant is asked to answer “yes” or “no” about a criminal past on a job application.  The rationale for this movement is to avoid a potential early elimination for ex-offenders that may otherwise be qualified for a position. 

The Act, which will go into effect on January 1, 2015, will restrict the manner and timing of pre-employment inquiries by Illinois employers about a job applicant’s criminal past.  The Act states that an employer “may not inquire about or into, consider, or require disclosure of the criminal record or criminal history of an applicant until the applicant has been determined qualified for the position and notified that the applicant has been selected for an interview by the employer.”  If no interview will be conducted, the employer must wait to inquire about or into, consider or require disclosure of an applicant’s criminal history “until after a conditional offer of employment is made to the applicant by the employer…”.  The Act exempts certain positions, including positions where:

 Employers are required to exclude applicants with certain criminal convictions due to federal or State law;

 A standard fidelity bond or an equivalent bond is required and an applicant’s conviction of one or more specified criminal offenses would disqualify the applicant from obtaining such a bond; or

 Employers employ individuals licensed under the Emergency Medical Services (EMS) Systems Act.

The Act applies to private employers who have 15 or more employees in the current or preceding calendar year, any agent of the employer, and employment agencies.  The Act does not apply to public employers. 

Private employers that fall within the scope of this new Act are still permitted to notify applicants in writing of the specific offenses that will disqualify an applicant from employment in a particular position due to federal or State law or the employer’s policy.  Additionally, employers are still permitted to deny employment to applicants who have been convicted of certain offenses provided that the employer follows the proper rules for such inquiries and does not violate other state and federal laws, such as Title VII of the Civil Rights Act.

Since the Act does not go into effect until January 1, 2015, this is a perfect opportunity for private employers to reevaluate its hiring techniques to ensure compliance.

For more information on this topic, contact Stephanie Strickler at 312-334-3465 or sstrickler@messerstrickler.com.

 

Eleventh Circuit Imposes Liability on Autodialed Calls and Defines TCPA Language

The Eleventh Circuit Court of Appeals recently reversed a district court’s decision to grant summary judgment in favor of a debt collector in a Telephone Consumer Protection Act (“TCPA”) case.  In its decision, the Eleventh Circuit provided further clarification on the Act’s definitions of “prior express consent” and “called party” and stressed the importance of verifying cellular telephone ownership before contacting a person attempting to collect a debt.

In Osorio v. State Farm Bank, F.S.B., Clara Betancourt applied for a State Farm credit card and listed the cell phone number of her long-time partner Fredy Osorio in the application.  Later Betancourt failed to make timely minimum payments on her credit card account.  Subsequently, State Farm hired a debt collector to garnish the payments, who placed 327 autodialed calls over the six month period to Osorio’s cell phone number.  Osorio filed a lawsuit claiming that even though Betancourt was his girlfriend, she did not have the authority to consent on his behalf to receive debt collection calls on his cell phone number.  Moreover, if Betancourt had such authority, Plaintiff revoked that consent later during his telephone conversations with the debt collector.

The TCPA claims in this case were dismissed by the trial court, granting summary judgment in favor of State Farm.  Osorio appealed and the Eleventh Circuit Court reversed the trial court’s decision.

Below are several takeaways from Eleventh Circuit decision:

  1. Prior express consent must come from the called party.  The Eleventh Circuit addressed the meaning of the term “called party” and held that the term refers to the actual current subscriber of the cellular phone number.  In this determination the Court sided with the Seventh Circuit’s decision in Soppet v. Enhanced Recovery Company, LLC.  The Eleventh Circuit also agreed with the Seventh Circuit in that called party does not refer to the intended recipient of the phone call.  The Eleventh Circuit stated: “…we believe this really means that Betancourt had no authority to consent in her own right to the debt-collection calls to [Osorio] because one can consent to a call only if one has the authority to do so, and only the subscriber (here, Osorio) can give such consent, either directly or through an authorized agent.”
  2. Prior express consent may be given by the agent of the called party.  Even though the Court did state that one adult might authorize another to give consent to make calls to their cellular telephone number in some circumstances, the Court found that long-term relationship between Betancourt and Osorio was not sufficient to provide Betancourt an authority to give State Farm consent on behalf of Osorio to call his cell phone.
  3. Oral revocation of prior express consent by the called party is allowed.  The Court noted that even though the Fair Debt Collections Practices Act (“FDCPA”) requires a consumer to notify the debt collector in writing if they do not wish to be contacted by the debt collector, the TCPA does not contain the same language.  Also, the Eleventh Circuit agreed with the Third Circuit’s decision in Gager v. Dell Financial Services, LLC, which states: “in light of the TCPA’s purpose, any silence in the statute as to the right of revocation should be construed in favor of consumers.”
  4. TCPA violations can occur if a cell phone call has been placed- it is not necessary for a charge to incur.  The Eleventh Circuit held that a TCPA violation still occurs even if the call placed was not charged: “To state the obvious, autodialed calls negatively affect residential privacy regardless of whether the called party pays for the call.”  In support of its decision, the Court relied on the Act’s definition -- that it prohibits autodialed calls “to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any other service for which the called party is charged for the call.”  The Court was convinced that the phrase regarding charges is related to the previous phrase and not to the whole definition.

In light of this decision, debt collectors should verify the current ownership of all cellular phone numbers they are currently calling or are intending to call.  These actions will help protect debt collectors from TCPA liability risks that are related to calling shared cell phone numbers, recycled number or wrong telephone numbers.  For more information you may contact Joe Messer at (312) 334-3440 or at jmesser@messerstrickler.com and Stephanie Strickler at (312) 334-3465 or at sstrickler@messerstrickler.com.  

Alert! Debt Buyers and Debt Collectors May Need a License to Buy and Collect Debt in New Jersey

The United States District Court for the District of New Jersey recently denied a motion to dismiss a Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., claim against a debt buyer and a debt collector because the debt buyer failed to obtain a “consumer lender” license pursuant to the New Jersey Consumer Finance Licensing Act (“NJCFLA”).

In Veras v. LVNV Funding, LLC and MRS BPO, LLC, a New Jersey consumer filed a class-action FDCPA complaint against a debt buyer and debt collector alleging a violation of Section 1692e(10) of the FDCPA, which prohibits using a false representation of deceptive means to collect or attempt to collect consumer debt.  The debt collector sent a collection notice on behalf of the debt buyer in an attempt to collect a debt owed by the consumer.  The consumer alleged that the debt buyer and debt collector engaged in deceptive conduct because they attempted to collect consumer debt without obtaining a license under the NJCFLA.

The court determined that the debt buyer was considered a “consumer lender” under the NJCFLA because it “directly or indirectly engages…in the business of buying, discounting or endorsing notes…for compensation in amounts of $50,000 or less…”.  Therefore, the debt buyer was required to obtain a license under the NJCFLA.  Thus, even though the collection letter did not make any representation that the debt collector or debt buyer was licensed under the NJCFLA, the court still found that the allegations supported the FDCPA claim.

This case is interesting because New Jersey does not have a law expressly requiring debt collectors to obtain a license.  Instead, there are only bonding and registration requirements.  Thus, this court determined that the NJCFLA indirectly applies to debt collectors collecting in New Jersey because debt buyers are considered “consumer lenders” and are required to obtain a license in order to engage in collection activity.  

For more information on this case or the FDCPA, contact Stephanie Strickler at 312-334-3465 or sstrickler@messerstrickler.com

New Disclosure Requirement for Out-of-Statute Debts in West Virginia

New changes to the West Virginia Code will require debt collectors to update any collection notices that will be sent to West Virginia consumers on out-of-statute debts (i.e., debts beyond the statute of limitations for filing a legal action for collection).  2014 H.B. 4360, a recently enacted bill, amends and reenacts §46A-2-128 of the Code of West Virginia relating to consumer credit protection, and specifically to unfair and unconscionable means to collect a debt.

Effective June 6, 2014, the new legislation will require debt collectors pursuing out-of-statute debts to inform consumers in their initial written communication that the creditor or collector cannot report the debt to the credit reporting agencies as unpaid and cannot sue for it.  Below is an excerpt with the required disclosure language (emphasis added):

(1)When collecting on a debt that is not past the date for obsolescence provided for in Section 605(a) of the Fair Credit Reporting Act, 15 U.S.C. 1681c:

“The law limits how long you can be sued on a debt.  Because of the age of your debt, (INSERT OWNER NAME) cannot sue for it.  If you do not pay the debt, (INSERT OWNER NAME) may report or continue to report it to the credit reporting agencies as unpaid”; and

(2) When collecting on debt that is past the date for obsolescence provided for in Section 605(a) of the Fair Credit Reporting Act, 15 U.S.C. 1681c:

“The law limits how long you can be sued on a debt.  Because of the age of your debt, (INSERT OWNER NAME) cannot sue you for it and (INSERT OWNER NAME) cannot report it to any credit reporting agencies.”

The bill also reinstates that no debt collector may use unfair or unconscionable means to collect or attempt to collect any debt.  Besides not including the necessary disclosures stated above, the following conduct will also violate §46A-2-128 of the Code of West Virginia:

-          Seeking or obtaining any written statement in any form that specifies that a consumer’s obligation is incurred for necessaries of life if this obligation was not incurred for such necessaries;

-          Seeking or obtaining any written statement in any form containing an affirmation of any obligation by a consumer who has been declared bankrupt, unless the nature and consequences of such affirmation are disclosed, as well as the fact that the consumer is not legally obligated to make such affirmation;

-          Collection or attempt to collect any interest or other charge, fee or expense incidental to the principal obligation unless they are authorized by the agreement creating the obligation and by statute;

-          Any communication with a consumer whenever they are appeared to be or are represented by an attorney unless the attorney fails to return calls or answer correspondence;

-          Collection or attempt to collect from the consumer debt collector’s fee or charge for services rendered (see restrictions in the 2014 H.B. 4360 bill).

For more information on this new legislation, the Code of West Virginia or fair debt collection statutes for other states, you may contact Joseph Messer at jmesser@messerstrickler.com or at (312) 334-3440 or Stephanie Strickler at sstrickler@messerstrickler.com or at (312) 334-3465.