WHAT TO DO AND NOT DO WHEN COLLECTING YOUR DEBT Karel Rocha Esq Partner Thomas Prenovost Partner Prenovost Normandin Bergh amp Dawe 2122 N Broadway Suite 200 Santa Ana CA 92706 714 ID: 776460
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Slide1
FAIR DEBTCOLLECTION PRACTICES
WHAT TO DO AND NOT DO WHEN COLLECTING
YOUR DEBT
Karel Rocha,
Esq., Partner
Thomas Prenovost, Partner
Prenovost, Normandin, Bergh & Dawe
2122 N. Broadway, Suite 200
Santa Ana, CA 92706
(714)
547-2444 ~
www.pnbd.com
2019
Update
Slide2About the Materials
These program materials are intended to supplement discussion at the seminar. Although every effort has been made to ensure these materials are accurate, current, and reasonably thorough, they are not designed to be used independent of the seminar, to present an independent, thorough treatment of the subject, or to take the place of legal advice.
Not Legal Advice
Great effort has been made to ensure that the information provided during this program is accurate, current, and reasonably thorough.
However, attorneys provide legal advice to clients based on a variety of factors, including, but not limited to, applicable law, the facts and circumstances of the case, the client's tolerance for risk and for legal expenses, and the attorney's opinions or beliefs concerning whether the court that would hear the particular case is likely to be easily convinced of the attorney's analysis of the law or is likely to be difficult to convince. All of these issues must be considered, and many may change periodically as courts interpret the applicable law. This program is intended to provide only a portion of that information.
As a result, participants should use this seminar as an opportunity to learn about applicable laws and possible strategies, but should always consult with an attorney who is familiar with the exact facts of the specific case taking a course of action. Participants should recognize that fact situations and examples discussed during this seminar are included for illustrative purposes, and are not intended to provide specific advice concerning how any particular credit union should act under any particular circumstances.
Slide3Slide4Litigation Trends2018
FDCPA
complaints are at their lowest point since 2008, when there were 6117 lawsuits
.
13.2% reduction over 2017
Slide5Litigation Trends
Slide6Litigation Trends
Slide7Litigation Trends
Slide82019 Cases
Obduskey v. McCarthy
Holthus
(US Supreme Court Case
)
3/20/2019 – US Supreme Court rules unanimously that a business engaged in
non-judicial foreclosure
is NOT subject to all the requirements and prohibitions applicable to debt collectors
Slide92018 Cases
Tepper
v. Amos Fin., LLC (3
rd
Circuit)
Debt
buyers (i.e., entities collecting, on their own behalf, consumer debts they acquired when the debts were in default),
CAN
qualify as "debt collectors" under the Fair Debt Collection Practices Act (FDCPA)
Slide102017 Cases
Green v. Specialized Loan Servicing (11
th
Circuit)
Court rejected a consumer’s claim that his monthly mortgage statement constituted an “attempt to collect a debt”
Slide112017 Cases
Henson v. Santander
On June 12, 2017, the Supreme Court held that a company may collect debts that it purchased for its own account
without
triggering the statutory definition of “debt collector” within the Fair Debt Collection Practices Act.
Slide122017 Cases
Midland Funding v. Johnson
On May 15, 2017, the Supreme Court held that a creditor’s proof of claim that made clear that the statute of limitations to collect the debt had run was not “false, deceptive, or misleading” and did not use any “unfair or unconscionable means” to collect a debt under the Fair Debt Collection Practices Act (the “Act”).
Slide13Arbitration Agreements
Slide14CA Statutory Update
Debt collectors must provide notice when collecting on time barred debt
CCP 337 amended to prohibit lawsuits that would be past the statute of limitations
Slide15CA Statutory Update
If the debt collector may still report the debt, then the debt collector must send the following notice:
The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, [name of debt collector] may [continue to] report it to the credit reporting agencies as unpaid for as long as the law permits this reporting
.
If the debt is too old to be reported, then the debt collector must send the following notice:
The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency.
Slide16CA Statutory Update
In either case, the statement must appear in the first written communication (including email or fax) that the debt collector sends to the debtor after the debt becomes time-barred.
Slide17Laws Apply To Consumer Debts
a. What is a “Consumer Debt”
Debt incurred
by an individual primarily for a personal, family, or household purposes
Slide18Laws Apply To “Debt Collectors”
a. Debt Collector Activity Regulated
b. FDCPA Definition
c. Rosenthal Definition
Slide19Prohibited Conduct Under FDCPA and Rosenthal Act
The FDCPA and Rosenthal both prohibit certain types of "abusive and deceptive" conduct when attempting to collect debts, including the following:
Slide20Contacting Debtors At Inconvenient
Or Prohibited Times
Slide21Failure To Cease Communication
Upon Written Request
Slide22Telephone “Harassment”
Identification of Caller
Slide23Contact At Debtor’s Employer
Slide24Contact With Represented Debtor:
Different Debts
Communication with consumer’s attorney distinguished
Non-lawyer with Power of Attorney Distinguished
Slide25Debt Validation Violation:
PRACTICE POINTER:
While the Rosenthal Act generally incorporates the Federal
FDCPA requirements, Civil Code 1788.17 exempts original
creditors
from complying with the debt validation requirements and also exempts those creditors from having to identify themselves as “debt collectors.”
Slide26Misrepresentation or Deceit
Slide27Collection of Incorrect Or Improper Amounts
Slide28Improper Threats
Slide29Debtor Abuse
Slide30Third Party Communications
Location Information Allowed
Third Party Communications Where Debtor Represented By Attorney
Voicemail Messages Not Recommended
Employment Verification Allowed
Slide31False or Misleading
Debt Reporting
Slide32Proper
Venue
For Lawsuits
Slide33Threats of Imprisonment or Property Seizure
Slide34Improper Application of Payments Received
Slide35Penalties For Violations
a. Actual Damages
b. Statutory Damages
c. Incorporation of Federal FDCPA
Slide36Attorney Fees and Costs
Prevailing debtor fees
Prevailing creditor's fees
Slide37Defenses to Liability
a. Curing the violation
b. Proof of Unintentional Violation
Slide38CONTACT US!
Karel Rocha, Esq
.
Tom Prenovost, Esq.
(714) 547-2444
krocha@pnbd.com