An appeals court has ruled that monthly statements attempting to induce payment on a debt are covered by both the Truth in Lending Act and Fair Debt Collection Practices Act.
The CFPB affirmed that “convenience” fees charged by debt collectors for payments made through certain means are unlawful unless expressly permitted by law. Trade groups are concerned about the possible impact on mortgage servicers.
Monthly mortgage statements that contain language suggesting they are attempts to induce payment on a debt can be construed as a debt-related communication under the Fair Debt Collections Practices Act.
The Ninth Circuit overturned a lower court’s decision that CitiMortgage had accurately responded to a consumer’s dispute over furnished loan information and conducted a reasonable investigation.
While affirming a district court ruling against CashCall, a three-judge panel of the Ninth Circuit Court of Appeals said the California-based lender’s behavior was reckless and justified higher penalties.
A new report shows that medical debt is the most common collections tradeline on consumer credit reports and out of every 100 Americans, between 18 and 35 people have medical debt in collections.
Industry attorneys believe new guidance issued by the CFPB on the debt collection rule that takes effect at the end of the month could end up causing more stress for servicers.
So far this year, the CFPB has brought 44 enforcement actions, with five against debt collectors. The bureau is currently juggling 30 cases, one of the largest litigation dockets in its history.
The final rule outlines the steps collectors must take to inform borrowers about an existing debt and prohibits vendors from bringing legal action over time-barred claims. But neither industry nor consumer groups are happy.
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