Defending ARM Businesses Against Consumer Litigation
We represent creditors, collection agencies and other service providers in the accounts receivable management (ARM) industry. The credit and collection industry is heavily regulated. Numerous consumer protection laws allow a private right of action for violations of the law. The Fair Debt Collection Practices Act (FDCPA), Telephone Consumer Protection Act (TCPA), Electronic Fund Transfer Act (EFTA) and Fair Credit Reporting Act (FCRA) all are common areas of law for consumer litigation. Our firm defends creditors and collection agencies involved in litigation with FDCPA, TCPA, EFTA and FCRA matters.
The TCPA, EFTA, FDCPA, and RFDCPA, place onerous compliance requirements on credit and collection professionals. Even when every effort is taken to follow the letter of the law, consumers can bring claims under their strict-liability provisions for a mere technical violation. Litigating TCPA, FDCPA, EFTA and related claims burden resources. We understand your unique challenges from a business-operational standpoint and legal standpoint. Our goal is aligned with your business – efficiently resolve the litigation and prevent future occurrences.
When defending consumer protection lawsuits, our firm has a solid understanding of operational considerations and the need to avoid future litigation. When undertaking representation of matter, we will explore defense strategies unique to your business and seek to achieve the common goal of avoiding future litigation.
- State and Federal Court Actions: In California, it is common for consumers to bring claims for violations of the state’s Rosenthal Fair Debt Collection Practices Act (RFDCPA). Our firm defends against RFDCPA claims, whether it is in the Superior Court for the State of California, or in the United States District Court under its supplemental jurisdiction. After advice and counseling by our firm, some clients decide to remove matters from California’s state court to the federal system. However, most cases start in the federal system. Regardless, our firm will represent clients in federal and state court, defending against FDCPA, RFDCPA, TCPA, FCRA and other consumer protection laws.
- Counterclaims & Cross Complaints: Our firm is also able to serve collection law firms and attorneys that have been sued for FDCPA and/or RFDCPA matters under a counterclaim or California’s cross complaint. Whether the attorney or law firm is looking for associate counsel or to augment internal support, research, motions or the like, our firm offers solutions to efficiently defend the subject action.
- Government Regulatory Actions: The Consumer Financial Protection Bureau (CFPB) has rule making authority over the Electronic Fund Transfer Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act and numerous other consumer protection laws. The CFPB also takes enforcement action against ARM businesses. This may start with an investigation and lead to prosecution. Sometimes government actions are initiated at a local level. For example, California’s Attorney General may investigate an ARM business following a consumer complaint. Our firm will represent your business in defense of government regulatory actions.
Avoiding lawsuits requires compliance programs, policies and procedures to run your business in a risk-averse fashion. Our vast ARM-industry experience brings value beyond general legal services. Our firm has experience with credit and collections in numerous industries including credit cards, medical debt, homeowners’ association, real property, student loans, municipal fines, landlord-tenant, taxes, and consumer lending.
Our compliance services will add value to your operations with high-level policies and procedures. We can help reduce lawsuit risks with letter reviews, script reviews, compliance management systems, client contracts and the like. We also advise and counsel our clients on an ongoing basis with new developments and changes in the law.
Advice & Counseling
Consumer protection laws change by legislation and are interpreted by our court systems. New precedents are published regularly, which makes navigating the compliance environment challenging. Interpreting consumer protection laws without the advice and counsel of a qualified attorney may have damaging consequences. It’s not what the law states, but more importantly, it’s what the law means. Our firm advises clients regarding the current regulatory climate and counsels ARM businesses to enable informed decisions making. The end result is risk mitigation and added value to the overall business model.
Debt-collection letters present their own unique risks. They are mass publications. One technical error is replicated and republished to numerous consumers – making collection letters ripe for class litigation. They must be reviewed regularly for compliance with consumer protection laws. We provide thorough letter-review services to identify key threats before letters go into production. Again, the end result is added value to your business model. Our review will identify red flags under the FDCPA and RFDCPA. We will advise and counsel your business on issues to avoid litigation at later time. The cost and expense of protracted litigation outweighs the fractional cost of a thorough letter review. It’s an investment that provides peace of mind before publishing your letter for the world.
Script review set the procedures for your agents when communicating with consumers by phone. Additionally, scripts are commonly demanded during discovery and government actions. Like letters it is crucial to review debt-collection scripts on a regular basis for regulatory issues. If a consumer lawsuit can be avoided, it starts with your operations. Scripts are on the front line of operations and should be carefully crafted to provide clear guidance to debt collectors when communicating with consumers as well as to create a defensible claim (e.g. bone fide error defense) under the FDCPA. Our firm carefully reviews debt-collection scripts for production and counsels clients on legal concerns and provides best-practices solutions.
Policies, Procedures, CMS
Every ARM organization must have proper policies, procedures, and a compliance management system. Clients demand it; the government demands it; and, it the sets the foundation for effective compliance with operations. Our firm will add value to your organization with crafted policies, procedures and compliance management systems (CMS) to efficiently operate your ARM business. Our policies, procedures, and CMS add value to your business on multiple levels. They are designed to support client demands, while supporting a defense under consumer law matters and government actions.
Contract Drafting & Review
Compliance includes much more than regulatory compliance. There is contractual compliance. Client and vendor contracts must be carefully drafted and reviewed to protect your business from unforeseen contract disputes. For example, indemnification and insurance clauses are common under client contracts and must be carefully drafted. Improper indemnification clauses can have severe consequences when a consumer protection suit is filed against a collection agency and its client. A collection agency may be required to indemnify its client, but the agency’s insurance carrier may exclude defense of the agency’s client. Other issues that are common under vendor contracts include warranties, representations, and limitations of liability. All such clauses should be carefully reviewed or drafted by a qualified attorney. Our firm has unique experience representing ARM businesses with contract-law matters. Our contract drafting and review services offer value to ARM businesses by protecting their interests created by contract.