Court decision muddles proposed FDCPA rule | Auto Finance News | Auto Finance News

Court decision muddles proposed FDCPA rule

A ruling from the Seventh Circuit Court of Appeals could complicate the Consumer Financial Protection Bureau’s proposed guidelines for the Fair Debt Collection Practices Act as it relates to electronic validation notices, Chris Willis, a partner at Ballard Spahr LLP, told Auto Finance News.

“[The decision] is throwing a fly in the CFPB’s ointment for what they proposed in their rules back in May,” Willis said.

The proposed rule issued by the CFPB would allow debt collectors to send validation notices — or formal communications of debt — electronically in one of two ways: either pasted as plain text in the body of an email or via a secure hyperlink through email or text message.

In this recent case, a debt collector sent the plaintiff a validation notice through a hyperlink in an email, which the plaintiff never opened. After subsequent communication with the debt collector, the plaintiff sued claiming she was never provided a validation notice.

Read the court’s decision at our sister site, Auto Finance Excellence, here.

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