b'For more information, please visit www.lenderlawwatch.com or www.enforcementwatch.comor means in connection with the collection of any debtof section 1692f(6), which is limited to any person . into pay $20 million in restitution to affected consumersCPA, since ARA never employed any of these meth-where the debt collector attempted to collect a time- any business the principal purpose of which is the en- and a $5 million civil money penalty.ods to collect consumer debt. ARA agreed to provide barred debt but did not expressly threaten[] to sueforcement of security interests. The Court held that anCFPB Settles with Illinois Debt Collector for Allegedredress of $36,878.81 to affected consumers and to pay on a time-barred debt. The Eleventh Circuit held thatentity meeting the limited-purpose definition of debtDeceptive Practices. In August, the CFPB announced aa $200,000 civil money penalty.with regard to a collection letter seeking payment oncollector (an entity enforcing a security interest) wassettlement with an Illinois-based debt-collection compa-a time-barred debt, an express threat of litigation isnot a debt collector subject to the entire FDCPA writny, Asset Recovery Associates, Inc. (ARA). ARA pur- LOOKING AHEAD TO 2020not required to state a claim for relief under [FDCPAlarge. Thus, while an entity enforcing a security interestchased defaulted debt, primarily from bank and retail section] 1692e so long as one can reasonably infer anmust comply with section 1692f(6) of the FDCPA, thecredit cards, and collected on those accounts throughGoodwins 2018 Year in Review predicted that in implicit threat. The Holzman decision by the Eleventhmere fact that the entity is seeking to enforce a securityletters and calls. According to the consent order, in2019, enforcement in the debt collection market Circuit followed similar holdings by the Fifth, Sixth, andinterest does not in and of itself trigger the full protec- making or attempting to make these collections, ARAwould continue to focus on representations made to Seventh. In contrast, cases from the Eighth and Thirdtions of the FDCPA.represented to consumers that, if they did not pay, ARAconsumers. That prediction proved true and is likely to Circuits have held that the FDCPA does not forbid debtCFPB and NY AG Settle Claims with Debt Collectionwould file a lawsuit or take legal action against them,continue in 2020. The year ahead should also see the collectors from seeking the voluntary repayment ofGroup for $65 Million. In July, the CFPB and NY AGcause them to be arrested, file liens against their hous- CFPB publish its final rule concerning the FDCPA, which time barred debt so long as the debt collector doesannounced that they had secured two proposed set- es, have their bank accounts or wages garnished, and/ is expected to be released in early 2020 and may not initiate or threaten legal action in connection withtlements with three Buffalo, New York-based affiliatedor cause their credit scores to be negatively affected.provide some clarity and certainty in this space through its debt collection efforts. The established split on thisdebt collection companies (Northern Resolution Group,The CFPB alleged that these statements constitutedimplementation of bright-line rules. issue raises the possibility that the Supreme Court willLLC, Enhanced Acquisitions, LLC, and Delray Capital,deceptive threats in violation of the CFPA and the FD-grant certiorari on an FDCPA case for a third time in asLLC) and their owners (Douglas MacKinnon and Mark many years. Gray) (collectively, debt collectors). The agencies Supreme Court Resolves Circuit Split on FDCPA Dis- alleged that the debt collectors had violated the CFPA covery Rule. In December, the Supreme Court issuedand FDCPA by inflating the amount owed on purchasedWHAT TO WATCHits decision in Rotkiske v. Klemm, et al., where the issuedebt, and then using illegal tactics to collect the debt. was whether the FDCPA encompasses the discoveryThe companies allegedly misrepresented to consumersPotential Supreme Court certiorari grant on FDCPA circuit splitrule, which tolls the statute of limitations until a plaintiffthat they owed sums they did not owe or that they wereFinal CFPB debt collection rulediscovers he or she has been harmed. The Supremenot obligated to pay, falsely threatened consumers with Court held that absent the application of an equitablelegal action, and impersonated law enforcement offi-doctrine, the statute of limitations begins to run whencials, government agencies, and court officers. Under the alleged FDCPA violation occurs, not when the vio- the terms of the proposed settlements, the debt collec-lation is discovered. The Rotkiske case was an appealtors agreed to pay a total of approximately $65 million, from the Third Circuit, which affirmed the district courtsapproximately $4 million of which will be suspended holding that the FDCPAs statute of limitations begins tosubject to the debt collector paying a $1 million civil run from the date of the injury. The Third Circuits de- penalty and $10,000 in consumer redress.cision was at odds with precedent from the Ninth andFreedom Debt Relief Agrees to Pay $25 Million to Fourth Circuits, which both had held that the FDCPASettle CFPB Lawsuit. In July, the CFPB also announced encompasses the discovery rule and allows plaintiffs tothat it settled a lawsuit against the nations largest bring claims within one year from the date the plaintiffdebt-settlement services providerFreedom Debt Re-discovers or should have discovered the alleged injury.liefthat allegedly used deceptive debt-settlement acts Supreme Court Holds FDCPA Does Not Apply toor practices. In its complaint, the CFPB alleged that the Nonjudicial Foreclosure Proceedings. In March, thecompany violated the CFPA by failing to settle consum-Supreme Court ruled in Obduskey v. McCarthy &ers debts as promised, charging consumers fees after Holthus LLP, that the FDCPA does not apply to entitiesconsumers negotiated their own settlements with cred-that solely conduct non-judicial foreclosure sales. Theitors, and misleading consumers about the companys Courts decision compared the FDCPAs general defi- fees and the companys ability to negotiate debts with nition of debt collector, which includes any personall creditors. The CFPB also alleged that the companyin any business the principal purpose of which is theviolated the TSR by charging consumers advance fees collection of any debts . . . owed or due another, withand failing to inform them of their rights as to funds de-the definition of debt collector solely [f]or the purposeposited with the company. Freedom Debt Relief agreed 22 23'