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
- The Consumer Financial Protection Bureau's (CFPB) suit against a for-profit college for violation of the Consumer Financial Protection Act (CFPA) alleged that it committed "unfair" and "abusive" acts or practices. The college argued that "unfair" and "abusive" are undefined and "standardless" terms that fail to give notice of what is prohibited. The court disagreed, finding that the body of authority regarding the "unfair" standard under the Federal Trade Commission Act provides a century's worth of guidance on its meaning, and that the CFPA's "abusive" standard provides "at least the minimal level of clarity" that due process requires. The court noted, however, that it was not deciding whether the "abusive" standard might be unconstitutionally vague when applied in other contexts. Consumer Financial Protection Bureau v. ITT Education Services, Inc., United States District Court for the Southern District of Indiana.
- A debtor's allegation that a debt collector continued to call him in the evenings despite his request that it not do so stated a claim under Section 1692c(a)(1) of the Fair Debt Collection Practices Act (FDCPA). The debtor's claim that the debt collector continued to call him after he disputed the debt stated a claim under Section 1692g(b) of the FDCPA, and the debtor's allegations regarding frequent evening calls, using an automatic dialing system that hung up on the debtor, were sufficient to state a claim under Section 1692d of the FDCPA. However, the debtor's claim for unfair conduct under Section 1692f was dismissed, because the section is a catch-all for conduct not addressed elsewhere in the FDCAP, and the debtor did not allege any unfair conduct beyond that alleged with respect to its other claims. Petri v. Valarity, LLC, United States District Court for the Eastern District of Missouri.
Deceptive
- Inclusion of request for attorneys' fees in pre-suit demand and prayer for relief in complaint by debt collector against debtor did not conclusively constitute deceptive conduct under the Fair Debt Collection Practices Act. While Ohio law prohibits recovery of attorneys' fees by debt collectors with respect to consumer debts, the contract at issue was governed by Utah law, which allows such recovery. The appellate court remanded to the district court for further fact-finding regarding which state's law should apply. Wise v. Zwicker & Associates, P.C., United States Court of Appeals for the Sixth Circuit.
- Voicemail messages left by a debt collector, but which did not identify the debt collector as such, violated Sections 1692e(11) and 1692d(6) of the FDCPA. Though the voicemails did not directly convey information about the debt, the debt collector indirectly did so by stating that the debtor could resolve her debt by returning the call. Rhodes v. Olsen Associates, P.C., United States District Court for the District of Colorado.
- A borrower alleging that a loan servicer's filings in a foreclosure suit included forged signatures on certain loan documents, as well as other misrepresentations, failed to state a claim under the FDCPA and state UDAP statutes, where it was undisputed that the borrower obtained a mortgage and loan and was in default. Accordingly, any misrepresentations were immaterial. Willis v. Green Tree Servicing, LLC, United States District Court for the District of Maryland.
- A debt collector's use of an abbreviated name in correspondence and telephone communications did not constitute deceptive conduct under Section 1692d of the FDCPA, as the debt collector provided "meaningful disclosure" of its identity in all communications. The debt collector's inaccurate identification of the creditor in one communication also did not violate the FDCPA, as the debtor had received prior communications from the debt collector correctly identifying the creditor. Everage v. National Recovery Agency, United States District Court for the Eastern District of Pennsylvania.
- A debtor stated a claim for deceptive conduct under the FDCPA where it alleged that a debt collector's dunning letter implied that interest would accrue on the debt, even though the letter indicated that no interest was due. The ambiguity of the statements could lead the least sophisticated consumer to be confused whether he or she must pay interest in order to satisfy the debt. Howell v. Eagle Accounts Group, Inc., United States District Court for the Southern District of Indiana.
Note that this Weekly UDAAP Standards Report serves to highlight only some of the many weekly developments in the law around these standards.