Coffee_before_tea

Encore Capital (midland, asset acceptance et. al) & Portfolio Recovery gets spanked. Does this affect you? Discuss...

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6 hours ago, debtzapper said:

Over the objections of Midland,  he got the court to take judicial notice of the Consent Order.   Although his claims were dismissed and the court said the details of the Consent Order were factually different from his case,  nevertheless the court did take judicial notice of it.  Perhaps with another case in another court,  the Consent Order might have more leverage

You hit on the only value of the Consent Order to a litigant in another case- as persuasive evidence that the debt collector's records are not reliable. As for "judicial notice," its being blown into something that its not. It is merely a way to get evidence in front of a judge without having to jump through some of the other hoops present in the rules of evidence. Using the Federal Rules as an example, a court may take judicial notice of facts that are "not subject to reasonable dispute" because they are either "generally known within the trial court's territorial jurisdiction" or "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201.  This includes some public records, including the "records and reports of administrative bodies." Interstate Nat. Gas Co. v. S. Cal. Gas Co., 209 F.2d 380, 385 (9th Cir.1953).

Compare, "Counsel moves the court to take judicial notice of the fact that it is colder in winter than it is in summer," with "Counsel moves the court to take judicial notice of the fact that it snowed on January 15, 2014." One statement offers a generally known fact, not subject to reasonable dispute. The other requires the introduction of additional evidence. Now compare, "Counsel moves the court to take judicial notice of the fact that the Consent Order states Midland's records are generally unreliable," with "Counsel moves the court to take judicial notice of the fact that Midland's records in this case are unreliable." Pretty much the same thing.

That is why waving the Consent Order in front of the judge has little effect. Sure, a judge will take judicial notice of the Order. And, sure, there could be those instances where it provides that little bit extra to tip the scales in your favor.  But if that's the only thing you have to suggest the records in your case are inaccurate, you shouldn't count on it to "outweigh" the affidavits and other testimony presented as evidence that the records in your case are accurate. You'll want to be able to call into question those records specifically. 

 

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11 hours ago, Harry Seaward said:

Midland, as a party to this order, has been ordered to do specific things before bringing a lawsuit that other debt buyers aren't going to be required to do.

That's not what I said.  There is a difference between what Midland has been ordered to do in the Consent order, than what Midland "Did" to violate the FDCPA in which the order pertains.  For example, here is an excerpt from the order (page 28-29)

Quote

 

Misrepresenting to Consumers That They Have the Burden of Proof in Litigation

115. In numerous instances, in connection with collecting or attempting to collect Debt through litigation or threats of litigation, Encore represented to Consumers, directly or indirectly, expressly or by implication, that under the FDCPA, the failure to dispute a Debt in writing within a certain period of time shifts the legal burden to Consumers to prove in court that they do not owe a Debt to Encore.  

116. In truth and in fact, under the FDCPA, the failure to dispute a Debt in writing within a certain period of time does not shift the legal burden to Consumers to prove in court that they do not owe a Debt.

117. The representations set forth in Paragraph 115 are false or misleading and constitute a deceptive act or practice in violation in violation of Sections 807 and 807(10) ofthe FDCPA, 15 U.S.C. §§ 1692e, 1692e(10).

 

There currently is not a section of the FDCPA that deals directly with the quoted issue above; although, it can be fit into the general 1692e.  Here the FTC defined a specific act, and declared it a violation of the FDPCA.  It is this "act" of Midlands that (in my opinion) can be carried forth to other industry members doing the same thing.  The "other" industry members won't be held liable to Midlands consent order, but by doing an "Act" that is declared unlawful, creates a cause of action for others to bring suit.

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17 hours ago, nascar said:

You hit on the only value of the Consent Order to a litigant in another case- as persuasive evidence that the debt collector's records are not reliable. As for "judicial notice," its being blown into something that its not. It is merely a way to get evidence in front of a judge without having to jump through some of the other hoops present in the rules of evidence. Using the Federal Rules as an example, a court may take judicial notice of facts that are "not subject to reasonable dispute" because they are either "generally known within the trial court's territorial jurisdiction" or "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201.  This includes some public records, including the "records and reports of administrative bodies." Interstate Nat. Gas Co. v. S. Cal. Gas Co., 209 F.2d 380, 385 (9th Cir.1953).

Compare, "Counsel moves the court to take judicial notice of the fact that it is colder in winter than it is in summer," with "Counsel moves the court to take judicial notice of the fact that it snowed on January 15, 2014." One statement offers a generally known fact, not subject to reasonable dispute. The other requires the introduction of additional evidence. Now compare, "Counsel moves the court to take judicial notice of the fact that the Consent Order states Midland's records are generally unreliable," with "Counsel moves the court to take judicial notice of the fact that Midland's records in this case are unreliable." Pretty much the same thing.

That is why waving the Consent Order in front of the judge has little effect. Sure, a judge will take judicial notice of the Order. And, sure, there could be those instances where it provides that little bit extra to tip the scales in your favor.  But if that's the only thing you have to suggest the records in your case are inaccurate, you shouldn't count on it to "outweigh" the affidavits and other testimony presented as evidence that the records in your case are accurate. You'll want to be able to call into question those records specifically. 

 

Agreed.  The main value of the Consent Order for individual litigants is persuasive.    I actually think it may have more value in state courts, where some judges, particularly those who tend to be  pro-consumer, may give greater deference to an order by a federal agency than would a federal judge, who strictly adheres to the fed rules of evidence, the fed rules of civil procedure and who routinely rules on litigation involving federal agencies.

Only the CFPB can actually enforce the Consent Order, and how long or how vigorously the CFPB it will continue to do that will depend on the outcome of the next presidential election.

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14 hours ago, Coffee_before_tea said:

There currently is not a section of the FDCPA that deals directly with the quoted issue above; although, it can be fit into the general 1692e.  Here the FTC defined a specific act, and declared it a violation of the FDPCA.  It is this "act" of Midlands that (in my opinion) can be carried forth to other industry members doing the same thing.  The "other" industry members won't be held liable to Midlands consent order, but by doing an "Act" that is declared unlawful, creates a cause of action for others to bring suit.

A finding of fact or conclusion of law reached in a Consent Order is not a properly promulgated Agency rule, so it has no binding effect outside the Order. In order for that to happen, the proposed rule must be enacted pursuant to the Agency rulemaking process, or incorporated into a declaratory ruling, issued pursuant to the rules associated therewith. In such case the Hobbs Act,  28 U.S.C. § 2342, requires a court to follow a rule or ruling of an administrative agency. Here, there has been no such agency action, so there is no binding effect outside the Order.

1692l(d). (d) Rules and regulations

Except as provided in section 1029(a) of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5519(a)], the Bureau may prescribe rules with respect to the collection of debts by debt collectors, as defined in this subchapter.

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@Coffee_before_tea

 

20 hours ago, Coffee_before_tea said:

That's not what I said.  There is a difference between what Midland has been ordered to do in the Consent order, than what Midland "Did" to violate the FDCPA in which the order pertains.  For example, here is an excerpt from the order (page 28-29)

There currently is not a section of the FDCPA that deals directly with the quoted issue above; although, it can be fit into the general 1692e.  Here the FTC defined a specific act, and declared it a violation of the FDPCA.  It is this "act" of Midlands that (in my opinion) can be carried forth to other industry members doing the same thing.  The "other" industry members won't be held liable to Midlands consent order, but by doing an "Act" that is declared unlawful, creates a cause of action for others to bring suit.

In regard to the excerpt, yes, there is a section of the FDCPA that deals directly with the issue.  It's 1692g(a)(3) and 1692g(c).

 

 

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@nascar  There is case law that suggests otherwise.  

Price v. Philip Morris, Inc., 848 NE 2d 1 - Ill: Supreme Court 2005

Quote

 It is sufficient if the authorization proceeds from regulatory activity, including the resolution of an enforcement action by means of a consent order. The consent order provides express authority for the party that was the target of the enforcement action to engage in the conduct described in the consent order. In addition, a consent order entered into by the FTC with one member of a regulated industry, which is published pursuant to statute, provides implied authority for other members of the regulated industry to engage in the same conduct. [. . .] Thus, while the authorization given to American Brands was express, the authorization given to the rest of the industry was implied, but no less specific.

This falls in line with Mulford v. Altria Group, Inc., 506 F. Supp. 2d 733 - Dist. Court, D. New Mexico 2007 as well.  

Also, Dodd Frank expanded the powers of the CFPB (FTC):

Quote

The Bureau has the authority to administer, enforce, and otherwise implement federal consumer financial laws, which includes the power to make rules, issue orders, and issue guidance.  See12 U.S.C. § 5511 (Dodd-Frank Act § 1021).  The Financial Stability Oversight Council (FSOC) has the power to set aside any of the Bureau’s regulations if the FSOC decides that the regulation would put the safety and soundness of the banking system, or the stability of the financial system of the United States, at risk.  See 12 U.S.C. § 5513 (Dodd-Frank Act § 1023).  

 The Bureau is authorized to engage in investigations and request information from covered persons, issue subpoenas or civil investigative demands, conduct hearings and adjudication proceedings, and commence civil actions in federal court seeking any appropriate or equitable relief against any person that violates a federal consumer financial law. See 12 U.S.C. §§ 5562–65 (Dodd-Frank §§ 1052–55).  The CFPB has exclusive authority to enforce federal consumer laws against nondepository covered persons.

Then you have the Director of the CFPB explain in his own words that the CFPB consent orders act as "regulation through enforcement" to all similar industry members, you can read that here.

Quote

our public enforcement actions have been marked by orders, whether entered by our agency or by a court, which specify the facts and the resulting legal conclusions. These orders provide detailed guidance for compliance officers across the marketplace about how they should regard similar practices at their own institutions. If the same problems exist in their day-to-day operations, they should look closely at their processes and clean up whatever is not being handled appropriately. Indeed, it would be “compliance malpractice” for executives not to take careful bearings from the contents of these orders about how to comply with the law and treat consumers fairly.

we strive to present specific enforcement orders that meticulously catalogue the facts we have found in our very thorough investigations and set out the legal conclusions that follow from those facts. These specific orders are also intended as guides to all participants in the marketplace to avoid similar violations and make an immediate effort to correct any such improper practices.

 

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16 minutes ago, Coffee_before_tea said:

"implied authority" ... or "detailed guidance for compliance officers across the marketplace" ...

... does not equate to binding authority to which federal court judges must grant deference. See, e. g., Reno v. Koray, 515 U. S. 50, 61 (1995) (internal agency guideline, which is not "subject to the rigors of the Administrative Procedur[e] Act, including public notice and comment," entitled only to "some deference" (internal quotation marks omitted)); EEOC v. Arabian American Oil Co., 499 U. S. 244, 256-258 (1991) (interpretative guidelines do not receive Chevron deference); Martin v. Occupational Safety and Health Review Comm'n, 499 U. S. 144, 157 (1991) (interpretative rules and enforcement guidelines are "not entitled to the same deference as norms that derive from the exercise of the Secretary's delegated lawmaking powers"). See generally 1 K. Davis & R. Pierce, Administrative Law Treatise § 3.5 (3d ed. 1994). Christensen v. Harris County, 529 U.S. 576, 120 S. Ct. 1655, 146 L. Ed. 2d 621 (2000).

 

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5 hours ago, nascar said:

... does not equate to binding authority to which federal court judges must grant deference. See, e. g., Reno v. Koray, 515 U. S. 50, 61 (1995) (internal agency guideline, which is not "subject to the rigors of the Administrative Procedur[e] Act, including public notice and comment," entitled only to "some deference" (internal quotation marks omitted)); EEOC v. Arabian American Oil Co., 499 U. S. 244, 256-258 (1991) (interpretative guidelines do not receive Chevron deference); Martin v. Occupational Safety and Health Review Comm'n, 499 U. S. 144, 157 (1991) (interpretative rules and enforcement guidelines are "not entitled to the same deference as norms that derive from the exercise of the Secretary's delegated lawmaking powers"). See generally 1 K. Davis & R. Pierce, Administrative Law Treatise § 3.5 (3d ed. 1994). Christensen v. Harris County, 529 U.S. 576, 120 S. Ct. 1655, 146 L. Ed. 2d 621 (2000).

 

 Thanks for bringing up the distinction between an agency rule and a consent order.  In case of consumer legislation, the FCC's rule making authority has guided courts in their interpretation of the TCPA.

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1 hour ago, debtzapper said:

Thanks for bringing up the distinction between an agency rule and a consent order.  In case of consumer legislation, the FCC's rule making authority has guided courts in their interpretation of the TCPA.

Thanks Debtzapper.

The agencies in the cases nascar cited generally do not have rulemaking authority delegated by congress, as the FTC & CFPB do.  I'm not sure what he's arguing at this point, because there is a distinguishable difference in the agency rulings in the cases cited above, than the rulings regarding Consent Orders in the cases I've cited.

My point still stands, in some districts, Consent Orders may have a significant effect on industry players, regardless if the Order is directed to them or not.

 

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@Coffee_before_tea

You can't get any plainer than the SCOTUS stating that a consent order is only binding on the parties to the order.

Regarding Reno v. Koray, the Bureau of Prisons has rulemaking authority.  The Supreme Court stated:

 It is true that the Bureau's interpretation appears only in a "Program Statemen[t]"—an internal agency guideline—rather than in "published regulations subject to the rigors of the Administrative Procedur[e] Act, including public notice and comment."

A consent order is not a rule or regulation.  In order for an agency with rulemaking authority to issue regulations or rules amending a statute, it must follow the Administrative Procedure Act.   In the following, Richard Cordray discusses the rulemaking process:

http://www.consumerfinance.gov/newsroom/prepared-remarks-of-cfpb-director-richard-cordray-at-the-american-bar-association/

So let us begin with how the rulemaking process works.

As many of you know very well, the Administrative Procedure Act lays out a defined process for agency rulemaking. Under our governing statute, however, the Consumer Bureau often has additional steps to follow. For example, where the rules we are contemplating would have a significant impact on a substantial number of small businesses, we must begin our process by creating small business review panels. We do this in conjunction with the Office of Management and Budget and the Small Business Administration’s Office of Advocacy. The goal is to gather input on our ideas from small financial services providers panels before we formulate a proposal. Concurrently, we have made it our practice to solicit the input of other stakeholders as well, including larger institutions, consumer advocates, vendors, government agencies, and other parties as appropriate depending on the nature of the rulemaking.

Absent exigent circumstances, any substantive rule must then be openly proposed through a notice in the Federal Register.

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1 hour ago, BV80 said:

You can't get any plainer than the SCOTUS stating that a consent order is only binding on the parties to the order.

Apparently not. But it has always been that way.

"Unlike an agency regulation which has industry-wide effect, a consent order is binding only on the parties to the agreement." General Motors Corp. v. Abrams, 897 F.2d 34 (2d Cir. 1990). See also, NLRB v. Wyman-Gordon Co., 394 U.S. 759, 765-66, 89 S.Ct. 1426, 22 L.Ed.2d 709 (1969) (plurality opinion). "But this is far from saying ... that commands, decisions, or policies announced in adjudications are 'rules' in the sense that they must, without more, be obeyed by the affected public." Id. "Indeed, the FTC Act itself reflects this distinction, at least with regard to consent orders: it specifically provides that the Commission cannot enforce them against non-parties." Good v. Altria Group, Inc., 501 F. 3d 29 (1st Cir. 2007).

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5 hours ago, BV80 said:

You can't get any plainer than the SCOTUS stating that a consent order is only binding on the parties to the order.

With some of these consent orders dealing with 500,000+ victims and the time to contact victims still in play, it seems easy for a defendant to wonder if they're part of the group mentioned in the order especially when so many of the JDB's shady characteristics match.

I would also think if there are at least three CFPB orders against various banks/JDBs for recordkeeping practices and the case you're involved in with a different JDB shows the same issues, the court would take notice that just because this particular JDB hasn't been caught yet, what they're doing is not in compliance with expected standards to avoid harm to consumers.

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Worse yet,  how many of those consumers are involved in litigation that will complete before any of the affected companies content them.   Then the Consumer won't get contacted because their matter was settled, albeit after the order so there is no need in the opinion of the company to contact them.

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25 minutes ago, small fry said:

More info pertaining to Midland specifically is here:  www.midlandcfpbsettlement.com

Click on the Frequently Asked Questions page.

Typical Midland...they put the responsibility on the consumer to contact them to get the lien off of their property. "  If Midland has a judgment lien in place against your property in connection with your account that you would like removed, please contact Midland directly at 800 825-8131 ext. 33062."   This came from the KCC website.

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10 hours ago, CommoSGT said:

Typical Midland...they put the responsibility on the consumer to contact them to get the lien off of their property. "  If Midland has a judgment lien in place against your property in connection with your account that you would like removed, please contact Midland directly at 800 825-8131 ext. 33062."   This came from the KCC website.

Midland's business model is to prey on the weak and unsophisticated consumer who won't know a single thing about the CFPB consent anyway nor know to contact Midland to remove any potential lien.  Midland will continue to make millions off the backs of people who just don't know any better.

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10 hours ago, CommoSGT said:

Typical Midland...they put the responsibility on the consumer to contact them to get the lien off of their property. "  If Midland has a judgment lien in place against your property in connection with your account that you would like removed, please contact Midland directly at 800 825-8131 ext. 33062."   This came from the KCC website.

I doubt they even know how many judgment liens are floating around out there.  Although I don't think it is good (or even proper) to suggest that consumers contact Midland directly, KCC is just the settlement administrator. It is their job to locate class members, provide notice, maintain the website, and cut checks. They really don't have any information about anything other than that. My suggestion would be to contact class counsel, rather than Midland, and go from there.

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