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Will Hunstein Require a Reset? | Smith Debnam Narron Drake Saintsing & Myers, LLP


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Last month, the entire ARM industry was caught by surprise when the Eleventh Circuit held that a debt collector’s transmittal of information to a third-party letter vendor violated Section 1692c(b) of the FDCPA. 
Hunstein v. Preferred Collection and Management Services, Inc., 2021 U.S. App. LEXIS 11648, 994 F.3d 1341 (11
th Cir. 2021).
 While the case will continue to be contested in the Eleventh Circuit, collection agencies and others who rely upon third party vendors have been left to contemplate what comes next.  This article will examine the decision, its immediate impacts, and considerations for the industry as it moves toward implementation of the debt collection rule. ....

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Finding Shelter in the Storm: Using the Bona Fide Error Defense with the Final Debt Collection Rule | Smith Debnam Narron Drake Saintsing & Myers, LLP


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The FDCPA provides a bona fide error defense for debt collectors who can show by a preponderance of the evidence that their violation was not intentional
and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.  15 U.S.C. §1692k(c).  Historically, debt collectors have been judicious in its use.  While it is a powerful tool, it shines a bright light on a debt collector’s policies and procedures and therefore, the stakes are high.  If a debt collector’s policies are adjudicated to be lacking, it can expose the debt collector to liability not only in the present action, but potentially to a swarm of further litigation. On the other hand, if the debt collector can safely navigate the defense with robust policies and procedures, it may fend off the present action, as well as future litigation.  ....

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CFPB Proposes Delay to Implementation of Its Debt Collection Rules | Bradley Arant Boult Cummings LLP


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Yesterday, the CFPB issued a proposed rule that would extend implementation of both parts of its debt collection rule by 60 days from November 30, 2021, to January 29, 2022. The debt collection rule, which we have discussed here in detail, addresses numerous topics related to debt collection, including debt collection call volume, restrictions on certain communication mediums under certain circumstances, a prohibition on bringing or threatening to bring legal action to collect time-barred debt, restrictions on certain forms of consumer credit reporting, and rules for electronic communications. The rule also contains various safe harbors. ....

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Picking Apart the Validation Notice Requirements Under the Debt Collection Rule | Smith Debnam Narron Drake Saintsing & Myers, LLP


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While it remains to be seen what, if any, changes a change in leadership in the CFPB will bring to the Debt Collection Rule, for now collection agencies should begin readying themselves for a November 30
th effective date. Now that the Rule has been fully published, this article will explore the Rule’s center piece, Section 1006.34 (Debt Validation Notices), and five traps for the unwary.
Trap Number 1:

For purposes of debt validation, the Rule  makes clear that if the debt collector knows or should know that the consumer is deceased, and if the debt collector has not previously provided the validation notice to the deceased consumer, the debt collector must provide the debt validation notice to a person authorized to act on behalf of the deceased consumer’s estate. Under the CFPB’s interpretation this would include executors, administrators and personal representatives. Debt collectors the ....

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CFPB Issues Small Entity Compliance Guide on Debt Collection Rule | Troutman Pepper


On January 21, the CFPB issued a
Small Entity Compliance Guide summarizing the October 2020 Debt Collection Rule. The Debt Collection Rule amends Regulation F, 12 CFR Part 1006 and becomes effective on November 30, 2021. The Debt Collection Rule governs the activities of debt collectors under the Fair Debt Collection Practices Act (FDCPA).
The guide does not address the December 2020 final rule addressing and clarifying the consumer disclosure requirement, required actions prior to furnishing, and prohibition regarding the collection of time-barred debt. Eventually the CFPB will update the guide to include the December final rule, but there is no expected release date at this time. ....

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