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 or Deceptive
A debtor alleged that a debt collector’s representation through its counsel in a collection case that it was entitled to 25 percent of the judgment as compensation for its fees violated Sections 1692e and 1692f of the Fair Debt Collection Practices Act, where the court used that representation to award 25 percent of the judgment as fees without proof that counsel had actually performed work justifying the fees. The Fourth Circuit affirmed the district court’s dismissal of the debtor’s claims, finding that the debtor’s contract authorized the debt collector to recover fees in an amount up to 25 percent of the debt and where the debt collector’s counsel was entitled under state court procedure to estimate its probable fees. The debt collector’s inadvertent disclosure of the debtor’s Social Security number, which was quickly remedied, also did not support a cause of action under Setion 1692f. Elyazadi v. SunTrust Bank, United States Court of Appeals for the Fourth Circuit.
A debt collector’s complaint did not violate Sections 1692e or 1692f of the Fair Debt Collection Practices Act where it alleged the existence of an “account stated” between the debtor and debt collector, where the debt collector had been assigned the debt from the original creditor. The complaint properly identified the debt collector as an assignee of the debt. O’Bryne v. Portfolio Recovery Associates, United States Court of Appeals for the Ninth Circuit.
A lender’s failure to send a notice of default by certified mail, as required by Texas law, did not constitute a false or misleading assertion under the Texas Deceptive Trade Practices Act, given that the borrower had actual notice of his default as a result of a notice of acceleration he did receive by certified mail and therefore was not misled. Perkins v. Bank of America, United States Court of Appeals for the Fifth Circuit.
Claims that creditors violated the Fair Debt Collection Practices Act by filing proofs of claim in a Maryland bankruptcy without possessing licenses to do business in Maryland as debt collection agencies were properly dismissed by the district court. The plaintiffs, who were the debtors in the bankruptcy, should have raised their claims in the bankruptcy proceeding, but failed to do so. As a result, res judicata barred the debtors from asserting the claims outside of the bankruptcy proceeding. Covert v. LVNV Funding, LLC, United States Court of Appeals for the Fourth Circuit.
Note that this Weekly UDAAP Standards Report serves to highlight only some of the many weekly developments in the law around these standards.