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The Eleventh Circuit Calls Into Question the use of Letter Vendors as Violative of the FDCPA /

The Eleventh Circuit Calls Into Question the use of Letter Vendors as Violative of the FDCPA

The Eleventh Circuit in Hunstein v. Preferred Collection and Management Services, Inc. issued an opinion yesterday that confronted an issue of first impression, namely, whether a debt collector can use a third party vendor to send collection letters without violating the Fair Debt Collection Practices Act (“FDCPA”).  The facts were simple.  The defendant/debt collector used a third party letter vendor to send an initial “dunning” letter to the plaintiff/consumer.  In doing so, the defendant provided the vendor with the plaintiff’s name, his outstanding balance, the fact that his debt resulted from his son’s medical treatment, and his son’s name.  The plaintiff filed a lawsuit alleging that the defendant violated the FDCPA by disclosing his personal information to the third-party vendor.

Three Quick Steps to Help Prepare Your Business for Cyber Threats

Nearly Half of all Businesses hit by Cyber Attacks in 2020

43% of businesses in the United States and Europe were hit with a cyber attack in 2020, an increase of 5% from 2019 which was 38%, according to Hiscox’s Cyber Readiness Report. Businesses cannot ignore this threat and must face it head-on. All businesses should now have an operational and maturing cyber risk management program in place that is led by their trusted cyber legal counsel.

Wyoming Legislature Authorizes Suits Against Colorado and Other States

The Prospective Claims: States “Impermissibly” Impede the Export of Wyoming Coal and Force Closure of Coal-Fired Power Plants

Colorado (as only one example of many states) is working to reduce its reliance on coal and other fossil fuels for its electricity and transportation needs.  Colorado plans to transition to 100 percent clean electricity generation by 2040 and rapidly expand the electrification of vehicles.

Products Containing PFAS may Soon Require California Proposition 65 Warnings

Manufacturers, suppliers, retailers, and other entities in supply chains for consumer products sold in California might soon need to provide warnings regarding certain per- and polyfluoroalkyl substances (PFAS) in their products.  California’s Office of Environmental Health Hazard Assessment (OEHHA) recently announced its intent to further regulate and study certain per- and polyfluoroalkyl substances under California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65.  Proposition 65 prohibits companies from knowingly exposing California consumers to chemicals “known to cause cancer or reproductive toxicity” (i.e., “listed chemicals”) in consumer products without first providing a “clear and reasonable warning.”  (Although not the focus of this article, Proposition 65 also addresses occupational and environmental exposure to listed chemicals.)

New Kansas City, Missouri Affordable Housing Ordinance Goes Into Effect

Developers Need to Consider New Affordable Housing Requirements Materially Impacting Project Feasibility

As demand for affordable housing continues to grow throughout the country, municipalities are increasingly faced with decisions of how best to structure and incentivize affordable housing development.  Recently, Kansas City, Missouri passed Ordinance No. 201038 (“Ordinance”) on January 28, 2021 which sets forth requirements for residential development projects seeking incentives to require affordable housing components. It took effect on April 8, 2021.  The Ordinance provides in part that projects “seeking economic incentives in the nature of the capture and redirection, abatement or exemption of taxes or other City financing contain an minimum number of affordable housing units” to qualify for those incentives.  Only projects that have not submitted an application by April 8, 2021 (the “Effective Date”) seeking incentives (as defined below) will be impacted, although projects that have applied earlier will be subject to the Ordinance if the project takes longer than three years from the Effective Date to receive final approval.

The Third Circuit Explains That the ‘Least Sophisticated Consumer’ is Presumed to Have a Willingness to Read Collection Letters With Care

In the recent Third Circuit opinion rendered in Moyer v. Patenaude & Felix, A.P.C., the plaintiff brought a putative class action alleging that Patenaude & Felix violated the Fair Debt Collection Practices Act (“FDCPA”) by sending her a single collection letter. The letter advised the plaintiff that her debt had been assigned to the firm and stated: “If you wish to eliminate further collection action, please contact us at 800-832-7675 ext. 8500.”  The letter then went on to advise the plaintiff of her validation rights under §1692g.  Resolution of the alleged class action claims required the Third Circuit to decide whether the inclusion of the single sentence inviting a call would confuse the least sophisticated consumer.

The Minnesota Supreme Court Determines Retailer Cannot Claim a Sales Tax Offset Based on Uncollectible Debts

The Minnesota Supreme Court recently ruled that a large home improvement retailer cannot claim a sales tax offset based on uncollectible debts from purchases made on its private label credit card, in the case Menard, Inc. v. Commissioner of Revenue, case number A20-0241. The home improvement retailer, attempted to offset its sales tax liability pursuant to Minnesota Statues § 297A.81, subd. 1 that allows a taxpayer to offset against its current sales tax liability taxes “previously paid as a result of any transaction the consideration for which became a debt owed to the taxpayer that became uncollectible during the reporting period.”

COBRA Changes Under the American Rescue Plan Act of 2021

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (“ARPA” or “the Act”) into law.  Among the Act’s many provisions is a temporary subsidy for COBRA coverage that will undoubtedly be a significant benefit for individuals who lost health coverage during the pandemic, but which is just as certain to be a tremendous administrative burden for employers and group health plans.

The Impacts of the Upcoming Beneficial Owner Disclosure Requirement on Real Estate Owners

As part of the National Defense Authorization Act for fiscal year 2021, Congress inserted a section titled the Corporation Transparency Act (the “CTA”) in order to combat money laundering and terrorism by creating a federal registry of the beneficial owners of limited liability companies, corporations, and other similar entities. The Financial Crimes Enforcement Network (“FINCEN”) of the Department of Treasury will keep the registry confidential, but is authorized to share the information with governmental, law enforcement, and foreign authorities.

After CFPB Refuses to Change FDCPA’s Strict Liability, Ninth Circuit Permits Bona Fide Error Defense for Statute of Limitations Mistake

The Consumer Financial Protection Bureau (CFPB) recently considered eliminating strict liability for one category of claims under the Fair Debt Collection Practices Act (FDCPA): claims asserting that a debt collector brought or threatened to bring legal action to collect a time-barred debt. The proposed revision to Regulation F would have required consumers to show that a debt collector knew or should have known the debt was outside the statute of limitations. Advocates for the change argued that strict liability was inappropriate because a debt collector can reach the wrong conclusion about a state’s application of the statute of limitations even after a thorough investigation and a consumer can raise the issue as an affirmative defense if he/she disagrees with the collector’s conclusion.  Debt Collection Practices (Regulation F), 86 FR 5766-01 (Jan. 19, 2021).

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