Failure to Warn of Increase in Debt

Federal Courts Divided On Whether Failure to Warn Consumer of Expected Increase in Debt Amount May Violate FDCPA

Recently, the United States Court of Appeals for the Second Circuit vacated the dismissal of a complaint alleging a violation of 15 U.S.C. § 1692e when a debt collector that notified consumers of their account balance failed to disclose that the balance may increase due to interest and costs.  Avila v. Riexinger, 2016 WL 1104776 (2d Cir. March 22, 2016).  The Second Circuit oversees Connecticut, New York and Vermont.

Evidentiary Standard Relaxed for Power-Of-Sale Foreclosure

The Court of Appeals, in In re Lucks, 2016 WL 1321155 (N.C.App. April 5, 2015), affirmed that the evidentiary standards applicable to a secured creditor seeking to establish its right to foreclose a property secured by a deed of trust in a power-of-sale proceeding are less rigorous than they would otherwise be in ordinary civil litigation.  While the decision is unremarkable, the Court took the opportunity to address the evidentiary burden the creditor must meet, hence reviewing the decision is a valuable educational exercise.

Significant Recent Opinions Impacting FDCPA Liability

Recently, the United States Court of Appeals for the Second Circuit vacated the dismissal of a complaint alleging a violation of 15 U.S.C. § 1692e when a debt collector that notified consumers of their account balance failed to disclose that the balance may increase due to interest and costs.  Avila v. Riexinger, 2016 WL 1104776 (2d Cir. March 22, 2016).  The Second Circuit oversees Connecticut, New York and Vermont.

Purchaser of Defaulted Debt Acts as Creditor

Purchaser of Defaulted Debt Not Subject to FCPA Liability Because it Acts as Creditor, Not Debt Collector

The United States Circuit Court for the 4th Circuit, which governs Delaware, Maryland, North Carolina, South Carolina, Virginia and West Virginia issued a significant published opinion favorable to creditors in Henson v. Santander Consumer USA, Inc., No. 15-1187 (4th Cir. March 23, 2016).

Role Reversal – Law Firms to Audit Servicers?

On 28 December 2015, the Consumer Financial Protection Bureau and a large Atlanta debt collection law firm, Frederick J. Hanna & Associates, P.C. (including several individual attorney defendants), entered into a Stipulated Final Judgment and Order (“Order”) with respect to Hanna’s debt collection lawsuit practices that the CFPB alleged violated the Fair Debt Collection Practices Act.

Lender Prepping & Mailing Loan Mod: Unauthorized Practice of Law?

Lender Preparing & Mailing Loan Modifications Not Engaging in Unauthorized Practice of Law

The increase in foreclosures after the 2008 financial crisis led to an increased response from lenders to assist borrowers. The most common form of aid provided to borrowers since that time has been the use of a loan modification. A large number of loan modifications have been entered into between lenders and borrowers in states across the county and South Carolina is no different.