UDAAP Council Weekly UDAAP Standards Report – 2/4/2015

Every week, courts around the United States issue decisions addressing aspects of civil UDAAP claims. In an effort to illuminate the UDAAP standards, below is a sampling of some of this week’s UDAAP decisions on the meaning of unfair, deceptive, and abusive.

Unfair

• A plaintiff’s claim that a debt collector violated the Fair Debt Collection Practices Act by attempting to collect a debt that had been discharged in bankruptcy was preempted by the Bankruptcy Code’s protections of debtors against violation of a discharge injunction. Garfield v. Ocwen Loan Servicing, LLC, United States District Court for the Western District of New York.

Deceptive

• Letters sent by a loan servicer to a debtor that allegedly contained incorrect information regarding the amount of her debt and misidentified the owner of the debt were not subject to the Fair Debt Collection Practices Act because the “animating purpose” of the letters was not to induce the debtor to pay the debt but to inform her about a change in her loan servicer and to respond to correspondence sent by the debtor. Goodson v. Bank of America, N.A., United States Court of Appeals for the Sixth Circuit.
• Borrowers stated a claim under the Texas Debt Collection Act where they alleged that their mortgage lender misrepresented the amount owed on their note, gave them conflicting payoff information and charged their escrow account for insurance the borrowers paid for personally. Forbes v. Wells Fargo Bank, N.A., United States District Court for the Southern District of Texas.
• Borrowers failed to state a claim under the Fair Debt Collection Practices Act where they alleged that their loan servicer represented it would report their loan as “Paid in Full” to credit reporting agencies if they paid a lesser amount in settlement, even though the loans would not be paid in full. The court found there was no requirement that loans actually be paid in full in order for servicers to report them as “Paid in Full” to CRAs. Kielty v. Midland Credit Management, United States District Court for the Southern District of California.
• A court granted summary judgment in favor of a mortgage lender and servicer on a borrower’s claim under Washington’s Consumer Protection Act where the borrower alleged that the lender and servicer deceptively foreclosed on her home while she was in a trial modification plan. The borrower could not prove that the alleged deceptive practices had an actual capacity to impact the public and did not prove that she was actually injured as a result of the alleged deception. Estes v. Wells Fargo Home Mortgage, United States District Court for the Western District of Washington.
• The court found that a genuine issue of fact existed as to whether a debt collector’s voicemail violated the Fair Debt Collection Practices Act where the debt collector did not identify herself as a debt collector or state that the call was an attempt to collect a debt. The court found that a voicemail may indirectly refer to a debt even without explicitly doing so, and therefore constitute a “communication” within the scope of the FDCPA. Lee v. Robinson, Reagan & Young, United States District Court for the Middle District of Tennessee.

Note that this Weekly UDAAP Standards Report serves to highlight only some of the many weekly developments in the law around these standards.

Please feel free to contact me for more information or to discuss these cases or any other UDAAP developments.