Watch AT&T's CEO get a robocall during an interview

Here, in The Hill.

They Collect Debts, But They Ain't Debt Collectors - So Says the Supreme Court

In its latest foray into the poorly drafted provisions of the Fair Debt Collection Practices Act, the Supreme Court unanimously decided today in Obduskey v. McCarthy & Holthus LLP that entities who engage in nonjudicial foreclosure either regularly or as their principal business are not (for that reason) "debt collectors" within the meaning of the Act, except for the limited purpose of application of a few provisions tailored to enforcement of security interests.

The Court acknowledged that foreclosing on security interests constitutes collection of debts under the ordinary meaning of those words and thus would have fallen within the Act's definition of debt collectors, which includes both entities whose business has the principal purpose of collection of debts and those who regularly collect debts on behalf of others. But because Congress added a provision to the Act that says the definition "also" includes those whose business is the enforcement of security interests, but only for purposes of one subsection of the act, the Court concluded that Congress must have meant not to include such entities within the definition of debt collectors for all purposes.

Got that? Congress wrote a definition of debt collectors that would include those engaged in nonjudicial foreclosure, but then effectively wrote them out of the Act by writing them into it for a narrower purpose.

That doesn't mean all bets are off for those engaged in nonjudicial foreclosures, because their other activities (including communications aimed at getting debtors to pay outside of the foreclosure process) may subject them to the FDCPA's provisions. And the decision specifically says it doesn't necessarily apply to judicial foreclosure, because judicial foreclosure usually involves more than just enforcement of security interests (that is, the proceedings usually seek a "deficiency judgment" against the debtor).

But it looks as if Congress, either intentionally or by sloppy drafting, left a major gap in the Act's coverage. Or so says the Supreme Court in an opinion drafted by a member of its liberal wing (Breyer) and joined by all his colleagues.

Industry Lawyer Fact Checks John Oliver on Robocalls

Earlier this week, we posted a link to a John Oliver segment on robocalls.  Eric J. Troutman fact checks Oliver here. Excerpt:

Assertion 5: Robocall Volume Exploded After A Court Decision Overturned the FCC’s Rules Expanding the TCPA

TCPAworld. com Accuracy Score: Liar liar pants on fire

This was the worst part of the bit.

Oliver states that robocalls exploded after ACA Int’l set aside the FCC’s expansion of the TCPA last year. He even throws up a blurry little graph to prove it. * * *

But wait a second. Take a close look at that graph.

What you’ll see is that robocalls actually exploded AFTER the 2015 Omnibus Ruling expanding the TCPA and BEFORE the court set aside those rulings. 

* * *

Lobbyists scuttle consumer product safety rules

The online journal FairWarning this week reported on how lobbyists from the law firm Bracewell LLP have "specialized in helping product makers thwart rulemaking by the Consumer Product Safety Commission."

One after another, industries have turned to Bracewell to fight unwanted federal standards, and they have not been disappointed. Along with the [recreational off-highway vehicle] rule, Bracewell and its clients in recent years have sidelined mandatory standards aimed at keeping toddlers from being strangled by window blind cords; avoiding carbon monoxide poisoning deaths from portable generators; and preventing thousands of finger amputations by table saws.

The article is here.

Anne Fleming: Consumer rights are worthless without enforcement

In The Conversation. Excerpt:

Compared with 1962, when President Kennedy put consumer concerns on the national agenda, ordinary Americans now have far more robust rights to safety, to information, to choice and to a fair hearing.

But consumer rights do not enforce themselves. Public enforcement requires funding and willing leaders. Private enforcement requires legal devices that allow consumers to pay attorneys for their work.

Without an ongoing commitment to enforcement, consumer rights may become paper tigers, offering the appearance of protection without any teeth.

“Dormant: The Consumer Financial Protection Bureau’s Law Enforcement Program in Decline”

That’s the title of a new report from Chris Peterson at the Consumer Federation of America. According to the executive summary:

This study analyzes whether the CFPB, under the Trump Administration, is delivering on its statutory law enforcement objectives and stated commitments to take aggressive action in the area of consumer law enforcement, particularly where complaint volume is the largest. To accomplish this, this study identifies and classifies every public enforcement action since the inception of the CFPB through the first three months of Director Kathleen Kraninger’s term in office.

Overall, this study finds that under the leadership of Acting Director Mick Mulvaney, and more recently, Director Kathy Kraninger, enforcement activity at the CFPB has declined to levels that are either nonexistent or significantly below that of the prior Administration, even in the areas where consumer complaint activity is the highest. The Bureau has announced only two cases each under authorities specifically given to the Bureau to address issues with credit reporting and mortgage lending, one case related to debt collection, and no cases related to student lending. Troublingly, the Bureau has also failed to announce or resolve a single antidiscrimination case.

Further, in addition to a decline in the overall volume of enforcement actions, this study shows significantly less monetary relief going to consumers. The CFPB returned about $43 million in restitution to consumers for each week of the Bureau’s first Director’s term in office. In the relatively few cases resolved since, this amount has plummeted to about $6.4 million per week under Acting Director Mulvaney and most recently dropped again to about $925,000 per week under Director Kraninger. The Bureau has not announced a single dollar of monetary relief in any of the high-volume complaint areas of credit reporting, debt collection, or student lending.

Overall, enforcement activity and relief to the consumer has declined since the appointment of Mick Mulvaney in 2017. And, despite being touted as one of Director Kraninger’s initial priorities for her term of leadership, law enforcement activity continues to remain significantly below earlier levels since her confirmation.

The full report is available here.

Bradley Paper: The Consumer Protection Ecosystem

Christopher G. Bradley of Kentucky has written The Consumer Protection Ecosystem: Law, Norms, and Technology. Here is the abstract:

Consumer law provokes fierce policy debate on issues from identity theft to online privacy, from arbitration clauses and class action lawsuits to Americans’ accumulation of debt and the unsavory practices sometimes used to collect. Pervasive technology in every aspect of consumer transacting has opened up many new fronts in these battles. Scholars, policymakers, and advocates have responded in kind, devoting increased energy to this area of law, which affects every single one of us, every single day. Despite its prominence, however, confusion persists regarding what consumer protection really is or does. The realities of social and technological change have not been integrated into legal analyses of consumer transactions. 

This Article constructs a novel and comprehensive model of the consumer protection ecosystem by contextualizing purely legal constraints amid the other realities of commercial relationships. Drawing on scholarship in the areas of technology, social change, and the law, the model lays out three basic types of constraints on the activities of participants in consumer commercial transactions: legal, technical, and social constraints. This model provides a basis for exploring how those constraints interact and shape behavior.

The model has significant ramifications for scholars, policymakers, and advocates. The model underscores why the area of consumer-facing commerce defies one-size-fits-all solutions; instead, it demands refined and layered consideration of consumers, merchants, and the commercial relationships they pursue, as well as the changes in the social and technological contexts of those relationships. This Article’s model provides a framework for that future research and debate.

 

John Oliver Takes on Robocalls

Or click here.

Blaming the victim for "misusing" dangerous products

Consumer Product Safety Commission commissioner Robert Adler and law prof Andrew Popper have written The Misuse of Product Misuse: Victim Blaming at Its Worst. Here is the abstract:

This paper addresses the legal consequences that surface when a consumer uses a product in a manner not specifically intended by that product's designer or manufacturer. If a product is used in a reasonably foreseeable manner, the fact that the use is at odds with a manufacturer’s intention should not be a basis to deny tort liability or limit the regulatory options of the Consumer Product Safety Commission. If a product proves to be unsafe, defective, dangerous, or otherwise hazardous to users and consumers, use patterns should not be the primary determinant in assessing regulatory and common law sanctions or consequences. While producers may wish to limit tort liability or regulatory impact by characterizing as wrongful all uses not fully consistent with specified instructions, limiting tort liability or regulatory impact is indefensible, inhumane, and at odds with common law tort principles and the clear purposes of the Consumer Product Safety Act. Penalizing consumers for uses that are reasonable but not expressly intended is little more than victim blaming. A legal culture that scapegoats consumers is justly seen as pathological regulatory capture. Ramped up consumer misuse standards reward those who create risks and punish those who are harmed. That cannot possibly be the goal of the common law or the legacy anticipated when the Consumer Product Safety Commission was formed nearly a half-century ago.

CFPB director appears at House oversight hearing

In the first Consumer Financial Protection Bureau oversight hearing of 2019, "Democrats repeatedly hammered Director Kathy Kraninger and GOP lawmakers for supporting recent changes at the agency." Rollcall has the story, here.