Litigation & Enforcement Actions – Page 6 – Consumer Financial Services Watch

Court Rejects TCPA Claims Based on Theory of Third-Party Liability

Jan 13 2017

By Andrew C. Glass, Gregory N. Blase, Roger L. Smerage, and Matthew T. Houston

The U.S. District Court for the Northern District of West Virginia recently granted summary judgment for the defendant alarm manufacturers in In re Monitronics International, Inc. Telephone Consumer Protection Act Litigation (“Monitronics”). In doing so, the Monitronics court rejected Telephone Consumer Protection Act (“TCPA”) claims based on alleged liability for acts of vendors, distributors, or other third parties. The court also expressly overruled its own earlier, contrary opinion rendered in Mey v. Monitronics International, Inc., which matter was consolidated into Monitronics as part of a multidistrict litigation (“MDL”). Thus, the court joined a growing number of jurisdictions that have questioned the ability of plaintiffs to prove vicarious liability in connection with TCPA claims.

To read the full alert, click here.

Massachusetts Title Clearing Act To Take Effect December 31, 2016 – Are you Ready?

Dec 21 2016

On December 31, 2016, the remedial provisions of “An Act Clearing Titles to Foreclosed Properties” (the “Act”) will take effect in Massachusetts. The Act is designed to clear legal title for Massachusetts homeowners who purchased homes with a prior foreclosure, by limiting the time period that former homeowners can challenge the foreclosure sale. The Act should be seen as welcome relief to the industry, but as detailed below, the Act still has some limitations. Indeed, like most rules governing foreclosure-related litigation, attorneys representing individuals that are the subject of a foreclosure action will inevitably try to find ways to challenge the Act and seek to avoid its intended and desired results.

To read the full alert, click here.

The Post-Election FinTech World: Are Happy Days (for Bankers) Here Again?

Dec 02 2016

By Judith E. Rinearson and Eric A. Love

In the days following the U.S. federal elections that resulted in the election of Donald Trump as President and Republican control of the 115th Congress, FinTech companies, banks, and other financial institutions are increasingly asking whether they still need to worry about compliance with the landmark Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), Consumer Financial Protection Bureau (“CFPB”) regulatory actions, and other financial services regulations.

It is true that there will likely be some significant regulatory changes, but it is a little too early for industry participants to pop the champagne corks.

To see are our thoughts about some of the top issues impacting FinTech companies, banks and other financial institutions, click here.

Leave the “Tow Truck Guy” Alone: The Ninth Circuit Rules Foreclosure of a Deed of Trust Is Not Debt Collection

Nov 10 2016

By Andrew C. Glass, Gregory N. Blase, Roger L. Smerage, and Joshua Butera

The Ninth Circuit recently clarified when a trustee of a deed of trust acts as a debt collector under the Fair Debt Collection Practices Act (“FDCPA”). In a break from other courts of appeal, the Ninth Circuit held that when a trustee carries out the contractual and statutory requirements for foreclosing property subject to the deed of trust, the trustee does not act as a debt collector. The Ninth Circuit reasoned that in so acting, the trustee does not seek to collect monetary debt from the debtor. In so holding, the court broke with other courts of appeals.

To read the full alert, click here.

FinCEN Looks to Financial Institutions to File SARs Regarding Cyber-Events

Nov 07 2016

By Mark A. Rush, Stanley V. Ragalevsky, Rebecca H. Laird, and Samuel P. Reger

On October 25, 2016, the Financial Crimes Enforcement Network (“FinCEN”) issued an advisory (the “Advisory”) explaining the obligations a “financial institution” might have under the Bank Secrecy Act (“BSA”) regarding “cyber-events and cyber-enabled crime.” The Advisory states that even if an actual financial transaction did not take place as result of a cyber-event, a financial institution may still be required to file a Suspicious Activity Report (“SAR”) in certain circumstances. Because of this, a covered financial institution should reconsider its obligations under the BSA after a cyber-event.

To read the full alert, click here.

“Not A Close Call”: The D.C. Circuit Restores The Safe Harbor To Section 8 of RESPA

Oct 12 2016

By Irene C. Freidel

Noting that “[t]he basic statutory question in this case is not a close call,” the D.C. Circuit has held that a bona fide payment by one settlement service provider to another does not violate Section 8(a) of the Real Estate Settlement Procedures Act (RESPA) if the payment is reasonably related to the market value of the goods, services, or facilities provided. See PHH Corp. v. Consumer Financial Protection Bureau (D.C. Cir. Oct. 11, 2016). The court’s conclusion was mandated by the unambiguous text of Section 8(c) of RESPA, along with the U.S. Department of Housing and Urban Development’s (HUD’s) long-standing interpretations of the same statutory provision.

To read the full alert, click here.

House Energy and Commerce Committee Calls for Modernizing the TCPA

Sep 28 2016

By Pamela Garvie, Andrew Glass, Greg Blase, Peter Nelson and Elana Reman

On September 22, 2016 the House Energy and Commerce Committee’s Subcommittee on Communications and Technology held a hearing on modernizing the TCPA. The hearing is significant because it marks the first time that lawmakers on both sides of the aisle have said the TCPA needs to be updated to reflect changing technology and business practices, and to draw a distinction between “harassing, malicious” calls from “bad actors” and “legitimate, informational calls that consumers want.” Republican members of the Subcommittee have raised concerns about the TCPA during past FCC oversight hearings, but this hearing actually was held at the request of full Committee Ranking Democrat Member Frank Pallone Jr. (D-NJ), Subcommittee Ranking Democrat Anna Eshoo (D-CA), and Congresswoman Jan Schakowsky (D-IL).

The Eighth Circuit Charts a Course for Data Privacy Cases in the Wake of Spokeo for Technical Violations of a Statute That Result in no Harm

Sep 19 2016

By Ryan M. Tosi and Lindsay Sampson Bishop

The Eighth Circuit recently became the one of the first federal Courts of Appeals to apply the U.S. Supreme Court’s Article III standing decision in Spokeo Inc. v. Robins to a data privacy case. The Eighth Circuit affirmed the dismissal of a putative class action complaint on the basis that the plaintiff failed to allege a concrete injury that “actually exist[s],” is “real,” and is not “abstract.” The lawsuit alleged that Charter Communications, Inc. (“Charter”), a company providing cable services, retained the personally identifiable information (“PII”) of its former customers well after the customers’ cancellation of their services. Because the plaintiff asserted only a technical violation of the statute, without alleging how that violation had actually injured him, the Eighth Circuit found that, under Spokeo, the plaintiff failed to plead a concrete and particularized injury sufficient to establish standing to file suit in federal court.

To read the full alert, click here.

Webinar: Developments in Student Loan Servicing with Lessons Learned from Mortgage Servicing

Aug 31 2016

Please join us for a webinar on student loan servicing covering a wide range of developments in regulatory, enforcement and litigation as well as the practical application of lessons learned in parallel servicing industries.

Panelists:
David E. Fialkow, Partner, K&L Gates
Hollee M. Watson, Associate, K&L Gates

To register, click here. Log-in instructions will be sent via email the day before the webinar. You must register to receive the log-in instructions.

Hold On, You Didn’t Overpay for That: Courts Address New “Overpayment” Theory from Plaintiffs in Data Breach Cases

Aug 10 2016

By Andrew C. Glass, David D. Christensen and Matthew N. Lowe

With the ever-increasing amount of personal information stored online, it is unsurprising that data breach litigation has become increasingly common. A critical issue in nearly all data breach litigation is whether a plaintiff has standing to pursue claims—especially where there is no evidence of actual fraud or identity theft resulting from the purported data breach. The plaintiffs’ bar has pursued a litany of legal theories in the attempt to clear the standing hurdle, including the recent theory of “overpayment” (a/k/a “benefit of the bargain” theory). Under this theory, the plaintiff alleges that the price for the purchased product or service—whether sneakers, restaurant meals, or health insurance—included some indeterminate amount allocated to data security. Depending on how the theory is framed, the purported “injury” is either that the plaintiff “overpaid” for the product or service, or that the plaintiff did not receive the “benefit of the bargain,” because the defendant did not appropriately use the indeterminate amount to provide adequate data security. Despite plaintiffs’ attempts to establish standing through this novel theory, courts have limited its applicability in a variety of ways discussed in this alert.

To read the full alert, click here.

Catagory:Litigation & Enforcement Actions