Litigation

Subscribe to Litigation

The California legislature has amended the existing requirements for debt collectors who receive consumer claims of identity theft with the Identity Theft Resolution Act (“Act”). See AB 1723; Cal. Civ. Code § 1785.16.2.[1]  The Act does not take effect until January 1, 2017, but creditors should immediately start implementing new policies and procedures for debt collectors to follow to ensure that the creditor’s interest is protected under the amendments.

Under the Act, the time frame for reviewing claims of identity theft has been dramatically reduced for debt collectors. Once the debt collector receives the police report, written statement, and other information required under the law, it will have 10 business days to start an investigation of the dispute.  After concluding its review, the debt collector must send the results of its investigation to the consumer within 10 business days.  The timeframe under the Act is in stark contrast to current law, which sets no time frame for when a debt collector must investigate a consumer’s claim of identity theft, or when the debt collector must notify the creditor associated with the account or any consumer reporting agency (“CRA”) to which the debt has been reported.  Current law only requires a debt collector to cease collection of a debt upon receipt of a police report filed by a consumer and a written statement alleging identity theft regarding the debt at issue.

While investigating the debtor’s claim of identity theft, the debt collector must review and consider all of the information provided by the debtor as well as information available to the debt collector in its file or from the creditor. The debt collector may apply common sense.  For example, if the debtor has previously affirmed the debt or acknowledged it, that fact can be considered in determining whether the claim of identity theft is valid or made in good faith. The debt collector should document all communications and provide a clear explanation if it is decided that the claim is not valid.  As mentioned above, once the debt collector concludes its review, it must send its decision to the debtor within 10 business days, notifying the debtor in writing  that he or she is still responsible for the debt, as well as the basis for that determination.  The debt collector may recommence collection activities only after making a good faith determination that the evidence presented does not establish the debtor is not responsible for that specific debt.…

Continue Reading California Amends Identity Theft Requirements for Debt Collectors

A recent Illinois Supreme Court opinion may expose banks to a flood of TILA rescission claims by anyone who claims an ownership interest in mortgaged property.  The state supreme court ruled that the right to rescind includes “each consumer whose ownership interest is or will be subject to the security interest” or “is subject to …

Andrew Soven, Dan Booker and Molly Campbell secured a precedential Third Circuit victory of a putative class action asserted against firm client M&T Bank Corp. and its subsidiaries claiming that, under the Real Estate Settlement Procedures Act (“RESPA”) and unjust enrichment, M&T operated an illegal captive reinsurance scheme.  Originally filed in the U.S. District Court …

Reed Smith attorneys secured a decertification of a putative class action asserted against Bank of America, N.A. in the U.S. District Court for the Eastern District of Pennsylvania on February 3, 2016.  The Honorable Petrese B. Tucker struck class allegations from a suit accusing Bank of America NA and co-defendant McCabe Weisberg & Conway, PC …

A recent opinion from the Southern District of California suggests that now there is no bright-line rule regarding what qualifies as human intervention for purposes of determining whether an autodialer was used. In denying a motion for summary judgment filed by Yahoo, the court found that:

“there are genuine issues of fact as to whether

…

With its last opinion of 2015, the Supreme Court added DIRECTV v. Imburgia to the ever-growing line of decisions reversing California courts refusal to enforce provisions in arbitration agreements that barred class arbitration. Imburgia presents the Court’s second look at the hostility of California law to waivers of class wide arbitration. Three years ago, after…

The Minnesota magistrate judge presiding over discovery in the litigation seeking to hold Target Corp. liable for the retailer’s 2013 data breach issued an order denying the motion by a plaintiff class of about 9,000 banks to compel production of certain documents relating to Target’s internal investigation that were withheld on privilege grounds.

Target withheld…

One of the hottest topics in class action litigation is whether a defendant’s offer of judgment providing complete relief to a plaintiff under Rule 68 of the Federal Rules of Civil Procedure moots the plaintiff’s individual and uncertified class action claims.  In just a few weeks, the U.S. Supreme Court will take up this question…

In the current banking environment, where private civil litigation is frequently brought simultaneously with, or very closely following, regulatory investigations and enforcement actions, it is crucial for banks to know whether and how communications with federal and state regulators may be used against them in parallel or subsequent proceedings.

The bank examination privilege exists at…