insideARM Weekly Recap – Week of August 26th, 2024

It can be hard to keep on top of all the developments in the ARM space, but we have you covered with our weekly recap of some top stories. 

On Tuesday, we highlighted an analysis of Q2 data from the Federal Reserve on credit card charge-offs and delinquencies. The 2024 numbers from the second quarter still indicate an increase in charge-offs and delinquencies, marking a 12-year high. This is the kind of information that can allow you and your business to plan for what is coming. With an estimated 9-12 months between charge-off and litigation, this data can help collectors know when to expect an increase in volume. 

On Wednesday, we shared how a Pennsylvania federal judge sanctioned two attorneys from J.P. Ward & Associates, LLC, for having employees draft falsified dispute letters on behalf of clients in debt collection cases. U.S. District Judge Cathy Bissoon found dispute letters, written by firm staff, were filled with nonsensical and irrelevant content. The attorneys admitted to drafting the letters, claiming client permission, but Bissoon rejected the explanation. She ordered the attorneys to pay all defendant fees, write apology letters to their clients, and attach her memorandum detailing their misconduct to any future debt defense cases they file in her court. 

This serves as a reminder that drafting dispute letters, signing the consumer’s name to the letter and adding other personal information is simply not allowed, even with permission from the consumer. Especially when you add the ‘weirdly worded and oddly specific scripts’.  It being attorneys that performed this violation gives the industry something else to consider when they receive dispute letters like this case. The dispute letter must come from the consumer.  

Finally, on Thursday, we reported the U.S. Court of Appeals for the Seventh Circuit upheld a lower court’s decision favoring a credit reporting agency, ruling that it did not report inaccurate information. The consumer discovered the disputed information when a mortgage bank obtained a “tri-merge” report from a third party, not directly from the agency being sued. Although the plaintiff had settled her delinquent mortgage through a short sale, the report accurately reflected her delinquency. The court found that the credit reporting agency could not be held liable for a report it neither prepared nor sent. This case highlights the importance of accurate data in FCRA lawsuits, which are on the rise, and underscores that derogatory information must accurately reflect a consumer’s credit performance, even if inconvenient for the consumer. 

As always, we thank you for reading the weekly recap to stay on top of this ever-changing industry! For a breakdown of the week of August 19th, click here. 

Have a question about how your company should react to the news above? We have a group for that! The weekly peer call hosted by insideARM’s Research Assistant is the perfect place to ask a question and get advice from industry colleagues who are facing the same challenges you are. Not sure if it is for you? Try it on for size with our 1-month free trial. Click here to learn more!