Firm Alerts

On December 10th, the Consumer Financial Protection Bureau (CFPB) entered into a consent order with CareCredit LLC. CareCredit agreed to refund up to $34.1 million to borrowers who were allegedly subject to deceptive credit card enrollment practices. Prompted by consumer complaints, the CFPB’s investigation focused on enrollment practices at health care providers’ offices for deferred interest credit card plans. The CFPB allegedly found incidences where health care providers: (i) orally misrepresented that the plan has no interest for 12 months as distinct from a deferred interest promotion,...

JPMorgan Chase Bank, N.A. and certain affiliates (“Chase”) entered into orders with the Office of the Comptroller of the Currency (“OCC”) and Consumer Financial Protection Bureau (“CFPB”) for alleged unfair billing of certain add-on identity theft products, which included credit monitoring and credit report retrieval, and unsafe and unsound practices in connection with the bank’s non-home loan debt collection litigation practices and non-home loan compliance with the Servicemembers Civil Relief Act (“SCRA”). Read More

The Federal Trade Commission recently released .COM DISCLOSURES, HOW TO MAKE EFFECTIVE DISCLOSURES IN DIGITAL ADVERTISING, updating its 2000 staff guidance DOT COM DISCLOSURES. The FTC has authority to enforce general consumer protection laws that prevent advertisements from being deceptive, unfair or otherwise in violation of FTC rules and to require disclosures to be presented clearly and conspicuously. According to the FTC, whether a disclosure meets this standard is measured by performance — that is, how consumers actually perceive and understand the disclosure in the context of the...

An Illinois Appellate Court has held that a collection agency had standing to sue a debtor in its own name under Illinois law but that the collection agency’s complaint was deficient because it failed to include documents evidencing the debt’s assignment as required by Illinois law. Unifund CCR Partners v. Shah, No. 1-10-0855, 2011 WL 477725 (Ill. App. Ct. Feb. 1, 2011). In Unifund, a credit card issuer sold a delinquent credit card debt. The purchaser sold the debt to another third party who assigned a legal interest in the debt to another entity for purposes of collection while retaining...

The notice of assignment requirement under the Florida Consumer Collection Practices Act (“CCPA”) has recently been amended. The CCPA provides that it does not prohibit the assignment, by a creditor, of the right to bill and collect a consumer debt. However, the assignee now must give the debtor written notice of such assignment as soon as practical after the assignment is made, but at least 30 days before any action to collect the debt. The assignee is a real party in interest and may bring an action to collect a debt that has been assigned to the assignee and is in default. Fla. Stat. Ann....

The Appellate Court of Illinois, First District, recently held that a credit card agreement was an unwritten contract subject to Illinois’ five-year statute of limitations, rather than its 10-year statute of limitations. Portfolio Acquisitions, L.L.C. v. Feltman, No. 1-07-3004, 2009 WL 1444791, at *8 (Ill. App. Ct. May 20, 2009). In Portfolio Acquisitions, a debt buyer sued a consumer in 2005 for a credit card debt charged off in 1999. The debt buyer’s second amended complaint indicated that the consumer applied for a credit card and agreed to pay for amounts charged, but failed to make...

House Bill 209, a bill aimed at further restricting the payday lending industry, was introduced in the Ohio House of Representatives on June 3. This bill, introduced by Representative Matt Lundy (D-Elyria) and co-sponsored by Representatives Foley, Murray, Hagan, Phillips, Skindell, Stewart, Harris, Fende, Newcomb, Okey, Celeste and Harwood, is designed to close so-called “loopholes” that were allegedly not addressed by previous attempts to regulate payday lending. This bill was introduced exactly one year after the Short Term Loan Act, another payday lending bill capping interest rates at...

The Ohio Supreme Court held that a provision in a residential mortgage contract requiring a defaulting borrower to pay a lender’s reasonable attorneys’ fees as a condition of terminating pending foreclosure proceedings on a defaulted loan and reinstating the loan is not contrary to Ohio statutory or case law or against Ohio public policy. Wilborn v. Bank One Corp., Slip Opinion No. 2009-Ohio-306 (Ohio Feb. 3, 2009). Under Ohio common law, contracts for the payment of attorneys’ fees upon the default of a debt obligation are void and unenforceable. The Ohio Supreme court explained that older...

DEBT COLLECTION ON HOLIDAYS With the holidays fast approaching, debt collectors should keep in mind potential restrictions on making debt collection calls during this time. The federal Fair Debt Collection Practices Act (“FDCPA”) does not specifically prohibit collecting during the holidays. However, the FDCPA prohibits communicating with a consumer in connection with the collection of any debt “at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer.” 15 U.S.C. § 1692c(a)(1). A number of states also have similar provisions. These...

The United States Court of Appeals for the First Circuit has recently decided two cases regarding the meaning of a “firm offer of credit” under the Fair Credit Reporting Act (“FCRA”). In Sullivan v. Greenwood Credit Union, — F. 3d —, 2008 WL 726135 (1st Cir., Mar. 19, 2008) and Dixon v. Shamrock Financial Corp., — F.3d —, 2008 WL 902200 (1st Cir., Apr. 3, 2008), the court affirmed the lower courts’ decisions in favor of the creditors, which held that the creditors had extended firm offers of credit. The FCRA generally prohibits a creditor from obtaining a consumer’s credit information...