Archives for September 2023

EDMONTON, Canada — MetCredit, a national collection agency serving many of Canada’s largest telecommunications firms, financial institutions, retailers, and B2B organizations, is pleased to announce the appointment of Christen Rumbles as its new Chief Financial Officer (CFO). Christen brings a wealth of financial expertise and strategic leadership to the organization.

Founded in 1973, MetCredit has consistently delivered outstanding accounts receivable solutions to a diverse portfolio of clients. The company’s commitment to excellence and innovation has made it a trusted partner in the Canadian business landscape.

Christen Rumbles, a seasoned financial executive holding designations of both CPA and CA, has an impressive track record of driving financial growth and optimizing corporate operations. As CFO, she will play a pivotal role in guiding MetCredit’s financial strategy and ensuring the company’s continued success in a dynamic and rapidly evolving industry.

“MetCredit is at the forefront of accounts receivable management in Canada, and I’m excited to join such an exceptional team,” says Ms. Rumbles. “I look forward to collaborating with my new colleagues to further strengthen MetCredit’s financial foundation, drive growth, and deliver exceptional value to our clients.“

Prior to joining MetCredit, Christen held key financial leadership positions in prominent Canadian companies: as Financial Leader at Kimberley Homes, as Controller and later Director of Finance at the Edmonton Chamber of Commerce and Senior Accountant at Deloitte — roles in which she showcased her ability to navigate complex financial landscapes and drive sustainable growth. 

“We are thrilled to welcome Christen Rumbles as our new Chief Financial Officer,” said Brian Summerfelt, CEO of MetCredit. “Her experience and financial acumen will be invaluable as we continue as innovation leaders and provide unparalleled services to our clients Canada-wide. I am confident Christen will contribute significantly to our continued growth and tradition of success.”

About MetCredit

With offices in Vancouver, Edmonton, Toronto and Montreal, MetCredit is one of Canada’s top-performing national collection agencies. The company is licensed and bonded to collect consumer and commercial debt in all Canadian provinces and territories, and in the United States through MetCredit USA. MetCredit is dedicated to providing innovative and effective solutions that help clients recover outstanding debts while maintaining strong client relationships.

For media inquiries, please contact: 

Brian Summerfelt President & CEO, 

Email: bsummerfelt@metcredit.com; Toll-free:1 (888) 797-7727 ext 2377

For more information about MetCredit, please visit metcredit.com.

It can be frustrating when a consumer files a Fair Debt Collection Practices Act (FDCPA) lawsuit in federal court despite the existence of a previous or ongoing state court action to collect the debt at issue. Recently, however, the 10th Circuit Court of Appeals sided with a debt buyer, agreeing that a consumer’s federal FDCPA lawsuit could not proceed because the consumer should have raised his concerns in a previous state court action regarding the debt. 

In McMurray v. Forsythe Finance, Case No. 21-41014, a debt collector filed a suit against the consumer in state court over a deficiency balance from the repossession and sale of a vehicle. The consumer answered the state court complaint, but the collector was granted a default judgment after the consumer failed to respond to the debt buyer’s motion for summary judgment.

The consumer subsequently filed a lawsuit in federal court alleging that the debt buyer violated the FDCPA by failing to have a debt collection license when it filed the state court lawsuit to collect the debt. In response, the debt buyer argued that if the original action caused the injury, then the consumer’s claims should have been brought during the original state court action. (Editor’s Note: Utah recently updated is licensing requirements, see here for details.)

The court agreed with the debt buyer, stating that since the alleged improper failure to have a license existed before the state court lawsuit was filed and arose from the same transaction as the state court claims (i.e., the attempt to collect the debt through the state court suit), the consumer could and should have raised his claims in the original state court action. Further, the Court noted that the consumer’s claims against the debt buyer were precluded since the results in the federal FDCPA action would nullify the previous state court judgment.    

insideARM Perspective

Creditors, debt collectors, and debt buyers are certainly familiar with the situation where a consumer does not respond to any attempts to contact them, does not answer, or appears after a suit is filed, and only pops up when they notice their wages are being garnished. This type of consumer can be extremely frustrating as they try to undo months or years of work and instead claim the debt collector did something wrong.

While it may not be the exact same scenario in every case, and state civil procedure laws may differ, this case still provides a boost to those collectors dealing with litigious pro se consumers or those who obtain legal counsel after a judgment has been entered. 

On August 18, a judge in the U.S. District Court for the Western District of New York granted the plaintiff’s motion for class certification for alleged violations of the Fair Debt Collections Practices Act (FDCPA) relating to an allegedly improper debt assignment notification.

In McCrobie v. Palisades Acquisition XVI, LLC, the plaintiff incurred a credit card debt, which was later assigned to a new creditor. In 2007, the new creditor commenced an action to recover the debt and obtained a default judgment against the plaintiff. The plaintiff claimed that because the summons and complaint had been mailed to an old address, he had no knowledge of the action or the default judgment. The default judgment was later assigned to Palisades Acquisition.

In 2014, an attorney from defendant Houslanger & Associates signed an income execution on behalf of Palisades Acquisition representing that it had the right to execute upon the judgment. Palisades Acquisition subsequently recovered $572.45 by executing on the plaintiff’s income.

In 2015, the plaintiff contacted Houslanger & Associates and requested the chain of title that proved Palisades Acquisition had the right to enforce the default judgment. Houslanger & Associates provided a copy of the bill of sale of the portfolio, which did not reference the plaintiff or the default judgment. Based on this information, the plaintiff filed a motion to vacate the judgment, which was granted. The garnished money was returned to the plaintiff, but the vacated judgment was later reinstated because the motion had been untimely. The plaintiff never repaid the garnished money.

In 2015, the plaintiff filed suit asserting that Palisades Acquisition and its attorneys’ enforcement of the default judgment violated the FDCPA. The plaintiff argued that Palisades Acquisition did not take the steps required to enforce the judgment. Specifically, the plaintiff argued that for an assignment of a judgment to take effect, the assignor must notify the judgment debtor of the assignment. While an employee of Palisades Acquisition testified that when it purchases a new debt portfolio, it will typically send an introductory letter to the debtors, the employee did not know whether Palisades Acquisition’s predecessors in interest sent a notice of assignment to the plaintiff.

The plaintiff moved to certify a putative class consisting of debtors included in the debt portfolio at issue who were subject to allegedly unlawful collection efforts by Houslanger & Associates and had money taken from them through either an income execution or a bank account garnishment. The defendants objected. After the magistrate judge heard oral argument, the parties submitted additional briefing to address whether the plaintiff has standing in light of TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). The magistrate judge issued a report & recommendation finding that the plaintiff had standing and the class should be certified. The defendants again objected. After briefing, the district court judge adopted the magistrate judge’s report & recommendation.

Both the magistrate and district judges found that the plaintiff had standing because the defendants allegedly deprived the plaintiff of more than $500 for several months by enforcing a default judgment in a manner that allegedly violated the FDCPA and state law. Further, the plaintiff alleged that the defendants still claim that they have a right to enforce that judgment if they so choose. The district court judge also agreed that the proposed class satisfied the requirements for class certification.

MIAMI, FL – The law firm of Pollack & Rosen, P.A., is proud to announce that Gregory Straub has joined the firm as Executive Vice President.

Greg has been involved with the credit and collection industry for over 30 years, having held many executive level positions with top performing employers.

Prior to Pollack & Rosen, Greg was President and CEO of Persolve Legal Group, LLP, a California based debt purchaser.

Greg is also an attorney and President of Elmbrook Law, a Wisconsin-based creditors rights law firm.

Greg is a well-known authority in the field of receivables management and has developed a significant understanding of inventory management, performance, and compliance processes.

Greg earned his law degree in 1990 from Creighton University Law School, Omaha, Nebraska, and a BA in psychology from Marquette University in Milwaukee, Wisconsin.

President Joseph Rosen said “we are excited that Greg has joined the firm. I am confident that he will contribute at a high level by bringing a multitude of experience and industry knowledge to the table, which will benefit the firm and the clients we serve.”

Greg will play a major role in the organization by providing structural insight and participating with Gateway Portfolio Services as a network law firm in Wisconsin and California.

About Pollack & Rosen, P.A.

Headquartered in Miami since 1995, the firm is well positioned as an experienced and compliant partner dedicated to providing credit originators across the financial industry with exceptional Receivables Management expertise, along with superior Litigation Strategies for its clients.

Greg can be reached directly at (305) 448 0006 x294 or via email at GSTRAUB@POLLACKROSEN.COM.

The CFPB filed a proposed stipulated judgment and order—which will take effect if approved by the federal district court—including $2.66 billion for consumer redress and $64 million in civil penalties. The companies neither admitted nor denied the CFPB’s factual allegations, but they agreed to the settlement and stipulated to the entry of an order that will ban them from engaging in any activities relating to the telemarketing of credit repair services for ten years.

Case Summary:

In May 2019, the CFPB initially sued six associated companies for allegedly violating the Consumer Financial Protection Act’s prohibition against deceptive practices and the Telemarketing Sales Rule (“TSR”). Among other things, the Bureau alleged that the companies’ practice of billing clients in advance for credit repair services violated the TSR’s prohibition on charging fees “for telemarketed credit repair unless it has been six months since the company achieved the promised results.” On March 10, 2023, the district court granted partial summary judgment on TSR liability in the Bureau’s favor. Following that ruling, according to the Bureau, the companies filed for Chapter 11 bankruptcy protection and closed the vast majority of their business. On August 28, 2023, the parties filed a proposed stipulated final judgment to resolve the Bureau’s claims.

In order to resolve the case, the companies agreed to the following remedial measures as outlined in the consent order, which still needs court approval:

• The companies are enjoined for a period of ten years against direct or indirect participation in telemarketing of credit repair services, or offering any credit repair services that are advertised, promoted, or sold through telemarketing.
• The companies will provide notice of the settlement to affected consumers.
• The companies will be ordered to pay $2.66 billion for consumer redress.
• The court will impose more than $64 million in civil money penalties against two of the companies.

Resources:

You can review all of the relevant court filings and press releases at the CFPB’s Enforcement page.

Proposed Stipulated Judgment and Order

CFPB’s Amended Complaint

CFPB Press Release

In Guthrie v. PHH Mortgage, Case No. 22-1248 (4th Cir. Aug. 18, 2023) an Appellate court concluded that the mere fact a business’ call center agent told a consumer an “autodialer” was used to make a call was not sufficient to win a TCPA case.

The Defendant had allegedly placed collection calls to the Plaintiff without express consent using an autodialer. The Defendant moved for summary judgment arguing that–after Facebook–its system could not be treated as an Automatic Telephone Dialing System (ATDS).

The Plaintiff failed to gather evidence regarding the capabilities of the dialer–most importantly, whether it could store or produce numbers using a Random Or Sequential Number Generator (ROSNG)–and, instead, opposed the motion only with a statement from a rep that the calls had been made by an autodialer.

Noting that not every autodialer is an ATDS the Appellate Court held the lower court correctly granted judgment to the defense:

“Guthrie’s sole evidence that PHH used an automatic telephone dialing system to contact him comes from his own testimony, in which he states that two callers from PHH told him they used an “auto dialer” to reach him. However, in response, a PHH representative testified that “PHH never used a random or sequential number generator to generate and then dial a telephone number when calling Plaintiff or any other individual in connection with the Loan.” J.A. 1638. And the evidence offered by Guthrie failed to create a genuine issue of material fact that references to “auto dialer” referred to an “automatic telephone dialing system.” Guthrie has provided no evidence that PHH used an “automatic telephone dialing system” as defined in the TCPA. So, even construing the evidence in his favor, a reasonable jury could not conclude that PHH violated the TCPA. Thus, we affirm the district court’s summary judgment on this claim.”

Now it is important to note that PHH’s evidence only looked at using a ROSNG to “generate and then dial” a phone number–but that is NOT the test. Again the test is whether a number is STORED or produced using an ROSNG. PHH touched on production but not on storage. So the Court easily could have reversed on this ground.

But I think the Court was ultimately correct here because it was Plaintiff’s burden to prove ATDS usage, not vice versa. Even though PHH’s showing was insufficient to win it did not have the burden of proof. And since Plaintiff could not demonstrate the functionalities of the system–he loses.

This might be the best case to date on the impact of representative admissions regarding dialer usage. Keep it in mind!

A panel of the U.S. Court of Appeals for the Ninth Circuit recently held that because of the timing of a filing in a collection action against a student loan borrower, his claim that debt collectors violated the Fair Debt Collection Practices Act (FDCPA) was not time-barred, reversing the lower court’s dismissal. 

In Brown v. Transworld Systems, Inc., the panel affirmed in part and reversed in part the lower court’s dismissal, for failure to state a claim, of a lawsuit in which  Brown, a student loan borrower who had received a bankruptcy discharge, alleged that the collectors’ attempts to collect discharged debts violated the FDCPA.  In pertinent part, the panel held that as long as the date of the action is easy to determine, the FDCPA one-year statute of limitations begins to run when a collection attorney takes the last action that could independently violate the statute.  The panel also held that the determination of whether a lawyer’s conduct or communications made during a collection lawsuit violates the FDCPA is a fact-intensive inquiry that requires a case-by-case examination.

From 2003 to 2007, Brown took out ten student loans.  The purchaser of the loans hired Transworld System, Inc. to collect on the defaulted loans and Transworld subsequently filed a series of collection lawsuits in state court on behalf of the purchaser.  In support of these collection efforts, the collector filed two separate affidavits purporting to establish the purchaser’s ownership of the debts, with the second affidavit intended to replace the first affidavit after it was questioned by Brown in his summary judgment motion. The state court ruled that the second affidavit declaring that the purchaser owned the underlying student loan debts was hearsay and excluded it.  Because the purchaser could not prove its ownership of the debt, the state court granted summary judgment in favor of Brown.

On April 6, 2020, Brown filed a putative FDCPA class action in state court alleging that defendants filed “a knowingly meritless debt collection lawsuit.”  The lawsuit was removed to a Washington federal district court which dismissed the action, concluding that the FDCPA claim was time-barred “because more than one year had elapsed between when Defendants served Brown with their debt collection suit and when Brown filed his FDCPA claim.”  On appeal, the Ninth Circuit panel reversed the dismissal of the FDCPA claims based on the running of the statute of limitations.

The Ninth Circuit panel confirmed that there is no continuing violation doctrine in the FDCPA context, although a plaintiff can still sue for discrete FDCPA violations.  For consumer debt collection lawsuits, to determine whether there has been an independent violation of the FDCPA, which triggers a new statute of limitations period, the panel held that a court must consider (1) the debt collector’s last opportunity to comply with the FDCPA and (2) whether the date of the alleged violation is easily ascertainable.  The Ninth Circuit panel made clear that the debtor must allege “specific actions taken by the debt-collector that show more than another attempt to argue that a violation arising from the filing of a debt-collection suit continues as long as the suit remains pending.”  The panel reasoned that “to plausibly allege that a litigation act is a violation of the FDCPA, the debtor must aver sufficient facts to show that the debt collector’s act is a new violation of the FDCPA.”  (emphasis provided.)  The panel drew a distinction between litigating a case and committing independent FDCPA violations in the course of that litigation.

The panel held that the debtor had plausibly alleged an independent violation of the FDCPA during the litigation that fell within the one-year limitations period—submitting a second affidavit in the litigation to prove ownership of the debt.  According to the panel, “[b]y filing a new affidavit that attempted to show that the [purchaser] owned the debts, Defendants did more than ‘reaffirm’ the original complaint.  Rather, they presented a new basis—not contained in the complaint—to show that the [purchaser] owned the debts.”  By ceasing to rely on the first affidavit and moving forward with the second one, the panel found that a discrete event occurred that created a “last opportunity to comply” with the FDCPA.  Further, the filing date of the affidavit was easily ascertainable.  Accordingly, given that the filing of the affidavit constituted a discrete violation, Brown’s FDCPA claim based on the affidavit was not barred by the FDCPA statute of limitations.

Importantly, in reaching its decision, the panel also considered the distinction between service and filing.  Rejecting Tenth Circuit precedent, the panel held, 2 to 1, that when service occurs before filing, filing can constitute an independent violation of the FDCPA, reasoning that service is not a debt collector’s “last opportunity to comply” with many FDCPA prohibitions.  In the majority’s view, because filing requires an additional act that can cause new harm to the debtor, filing is the debt collector’s last opportunity to comply.  Therefore, “while service alone can constitute an FDCPA violation, the final step of filing presents a ‘last opportunity’ to comply with the FDCPA when the alleged violation is the bringing of a knowingly meritless lawsuit.” 

The majority concluded that service and filing can constitute separate FDCPA violations, each with its own one year statute of limitations.  Accordingly, the majority upheld Brown’s claim that the debt collector committed an independent FDCPA violation when it allegedly filed a knowingly meritless collection lawsuit.  (Concurring in the judgment, the other member of the panel wrote that this was an “unnecessary conclusion and failed to anticipate the intricacies” that could arise in future cases.)

Notably, while concluding that Brown had sufficiently “alleged a violation” in its reversal, the Ninth Circuit panel emphasized that it did not address the actual merits of his FDCPA claims.  This ruling highlights that ongoing collection litigation activity may, by itself, trigger independent violations of the FDCPA that can renew the statute of limitations under the FDCPA and extend well beyond the date a collection lawsuit is filed.

STERLING, Ill. — VeriFacts, a leading data provider for the financial services industry, showed their support for their local Sauk Valley, Illinois community as well as active duty military this July. The team distributed Minor League Baseball tickets to the community at no cost to attend a baseball game themed around local Sauk Valley area businesses, thereby supporting local baseball and local businesses at once. The event was a hit, providing not just support for the community but also a team-building outing for VeriFacts employees and their families. 

Also in July, VeriFacts held a Dessert Auction to celebrate “Christmas in July” and raise funds to begin preparations for military care packages that will be sent to active-duty military during the holidays. 

Baseball for Business – Sauk Valley Area

“We always try to find creative ways to stay engaged in supporting our local community. We’re a more rural area so our local businesses are very important to the local economy. This was a fun way to have a good time out of the office and raise awareness for our local minor league baseball team as well as businesses in the area that deserve our patronage and support,” commented Stephanie Clark, CEO at VeriFacts. 

Dessert Auction for Military Care Packages

As part of their holiday giving, VeriFacts creates care packages for military or long-term hospital patients to receive while they are away from home during the holiday season. This year, they are preparing funds to purchase care package items that will be gathered to send to US soldiers stationed overseas during the holiday season. The team will begin to gather the items over the next couple of months to have plenty of time to pack and ship the packages to their destinations. 

Showing Hometown Spirit & Support

The spirit of VeriFacts is deeply rooted in caring for the community where its leadership and employees are planted and actively expressing gratitude for the opportunity to build and grow careers in the local area. VeriFacts is headquartered in a farming area of Illinois, west of Chicago. The team works in-office and resides in the local surrounding areas. They believe in empowering their employees and fellow citizens to continue to thrive where they are and support their families and communities despite changing national economic conditions or other circumstantial challenges that rural areas commonly face. 

About VeriFacts

VeriFacts, LLC is the top employment location and verification service for the receivables management industry. Having been in business for over 30 years, they are committed to offering guaranteed customer location and employment verification services to creditors across the nation. The VeriFacts brand has become synonymous with high-quality service and a positive customer experience. Over the years, their services have expanded into residential location information, data verification, and unique data aggregation. VeriFacts is proud to be a Certified Women-Owned Business by the WBENC.

A United States district court in Kentucky recently granted defendants’ motion to dismiss a case arising under the Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA) for lack of personal jurisdiction.

In Reid v. Tenant Tracker, Inc., the plaintiff rented an apartment in Kentucky. When she moved out, the apartment complex retained her security deposit and claimed she owed an additional $330 for cleaning costs. Later, when the plaintiff obtained a copy of her consumer report she found a tradeline furnished by Tenant Tracker in connection with the alleged apartment debt. On July 14, 2022, the plaintiff sent a dispute letter to Tenant Tracker. On July 20, 2022, defendant TT Marketing responded stating: “this account has been validated by the property and referred to another collection agency.”

The plaintiff filed suit and the defendants moved to dismiss citing lack of personal jurisdiction as their “only contacts with the [p]laintiff in Kentucky were in response to written inquiries initiated by the [p]laintiff and the responses were informational only.” Specifically, TT Marketing was engaged by the apartment manager to collect the debt and Tenant Tracker reported the debt to the national consumer reporting agencies. Both defendants and their employees were based in Texas.

The court analyzed whether Kentucky’s long-arm statute extended to the defendants under the “transacting business” prong. The plaintiff argued that TT Marketing’s purported dunning letters sent to her in connection with the debt constituted transacting business in the state. The court disagreed finding all but one of the letters sent to the plaintiff were in response to the plaintiff’s inquiries. As for the one letter not in response to the plaintiff’s inquiries, the court found that letter did not form the basis for the action as it was sent two years prior to the filing of the complaint.

The plaintiff next argued that jurisdiction was proper under FCRA because: 1) the defendants furnished credit information to the national consumer reporting agencies in an attempt to collect a debt from her in Kentucky; and 2) the credit information provided was defamatory and defendants knew the information “would be republished in Kentucky and harm [the plaintiff] in the Commonwealth.” The court disagreed. “The plaintiff fails to point to which provision of the Kentucky long-arm statue this conduct would fall under” and fails to cite to recent caselaw supporting her theory.