On August 27, 2019, Jonathan Pompan was quoted in Bloomberg Law regarding a federal appeals court decision that may have thrown a wrench into the Consumer Financial Protection Bureau's (CFPB) plans to allow debt collectors to validate consumer debts through text messages, email and other electronic communications.
According to the article, the U.S. Court of Appeals for the Seventh Circuit on Aug. 8 found that using hyperlinks to direct consumers to a debt validation notice does not comply with the Fair Debt Collection Practices Act. The decision in Lavallee v. Med-1 Solutions LLC comes as the CFPB is taking comments on a May proposal for the first-ever federal rules for debt collection.
The CFPB could choose to ignore the Seventh Circuit's decision and move forward without fixing its proposal. Industry attorneys say that is a risky move because debtors and consumer groups could use litigation over the validation notices to challenge other parts of the rule.
"The really big picture, too, though is the decision highlights the strong need for the CFPB to issue interpretive safe harbors for electronic communication, including email and text messages," said Pompan.