Posted by NCBRC - March 29th, 2019
In a unanimous, narrow, decision, the Supreme Court held that an entity merely carrying out nonjudicial foreclosures is not a “debt collector” within the meaning of the FDCPA. Obduskey v. McCarthy & Holthus LLP, 586 U.S. ___, No. 17-1307 (March 20, 2019).
The action arose when the law firm of McCarthy & Holthus, acting as agent for the mortgagee, initiated nonjudicial foreclosure proceedings against Dennis Obduskey. In response to McCarthy’s notice of foreclosure, sent in compliance with Colorado nonjudicial foreclosure law, Mr. Obduskey invoked the FDCPA and sent a letter disputing the debt. When McCarthy went forward with the foreclosure proceedings, Mr. Obduskey filed a complaint in district court alleging violation of the FDCPA’s requirement that, upon notification of a disputed claim, a debt collector must cease collection activities and obtain verification of the debt. The district court found that McCarthy was not a debt collector to which the FDCPA requirements applied. The Tenth Circuit affirmed. Obduskey v. Wells Fargo, 879 F. 3d 1216 (2018). Read More
Posted by NCBRC - October 3rd, 2016
In a press release issued on September 29th, by the NCLC, consumer advocates expressed concern over the IRS’s appointment of four private debt collection agencies to collect federal tax debts. The selection of private debt collectors was in response to a law passed by Congress requiring the IRS to outsource tax debts if one of three conditions applies: (1) more than one year has passed without any interaction between the taxpayer and IRS; (2) one-third of the statute of limitations has lapsed and there is no IRS collector assigned; or (3) the IRS is otherwise not working the debt due to lack of resources.
The move, described by the NCLC as “a terrible development for taxpayers,” raises concerns due to the already dubious collection practices of many debt collectors. In fact, one of the four agencies, Pioneer Credit Recovery, was terminated last year by the Department of Education for providing inaccurate information to borrowers. There is also concern over the potential for an increase in scams involving phony tax collectors.
Although debt collectors must send at least two written notices before calling the tax debtor, and debtors are permitted to tell the collector not to call, consumer advocates are seeking further protections, such as excluding from the program low-income taxpayers and those who owe taxes under the Affordable Care Act.
