A MASSIVE decision from the US Supreme Court…Foreclosure Mills are covered by the Fair Debt Collection Act

From Matt Weidner’s Blog

While we were busy railing away in front of the Florida Supreme Court yesterday…THE SUPREME COURT….the US SUPREME COURT issued a massive ruling that will send shock waves through all foreclosure mills.  This April 21, 2010 decision found that foreclosure mill law firms are subject to the Fair Debt Collection Practices Act.  The full decision is found here.  The mills can ignore the itty bitty ‘ole Florida Supreme Court, but what about the “Real” Supreme Court?

JERMAN v. CARLISLE, MCNELLIE, RINI, KRAMER & ULRICH LPA ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SIXTH CIRCUIT
No. 08–1200.  Argued January 13, 2010—Decided April 21, 2010

The Fair Debt Collection Practices Act (FDCPA), 15 U. S. C. §1692  et seq., imposes civil liability on “debt collector[s]” for certain prohibited debt collection practices.  A debt collector who “fails to comply with any [FDCPA] provision . . . with respect to  any person is liable  to such person” for “actual damage[s],” costs, “a reasonable attorney’s fee as determined by the court,” and statutory “additional damages.” §1692k(a).  In addition, violations of the FDCPA are deemed unfair or deceptive acts or practices under the Federal Trade Commission Act (FTC Act), §41 et seq., which is enforced by the Federal Trade Commission (FTC).  See §1692l.  A  debt collector who acts with “actual knowledge or knowledge  fairly implied on the basis of  objective circumstances that such act is [prohibited under the FDCPA]” is subject to civil penalties enforced by the FTC.  §§45(m)(1)(A), (C).  A debt collector is not liable in any action brought under the FDCPA, however, if it “shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.”  §1692k(c).

Held: The bona fide error defense in §1692k(c) does not apply to a violation resulting from a debt  collector’s mistaken interpretation of the legal requirements of the FDCPA.  Pp. 6–30. a) A violation resulting from a debt collector’s misinterpretation of the legal requirements of the FDCPA cannot be “not intentional” under §1692k(c).  It is a common maxim that “ignorance of the law will not excuse any person, either civilly or criminally.”  Barlow v. United States, 7 Pet. 404, 411.  When Congress has intended to provide a mistake-of-law defense to civil liability, it has often done so more explicitly than  here.   In particular, the administrative-penalty provisions of the  FTC Act, which are  expressly incorporated into the FDCPA, apply only when a debt collector acts with “actual knowledge or knowledge  fairly implied  on the basis of objective circumstances” that the FDCPA prohibited its action.  §§45(m)(1)(A), (C).  Given the absence of similar language in §1692k(c), it is fair to infer that Con gress permitted injured consumers to recover damages for “intentional” conduct, including violations resulting from a mistaken interpretation  of  the  FDCPA,  while reserving the  more  onerous administrative penalties for debt collectors whose intentional actions.

4closureFraud

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2 Responses to “A MASSIVE decision from the US Supreme Court…Foreclosure Mills are covered by the Fair Debt Collection Act”
  1. FDCPA says:

    Thank you for passing on this information about fraud in foreclosure cases. Indeed ignorance of law does not forgive anyone from the clutches of law.

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