Photo of Theodore W. Seitz

Theodore W. Seitz, leader of the Firm's debt acquisition counseling team, focuses his practice on complex litigation (including class actions), primarily in the area of consumer financial services and fair debt collection practices. He also has experience representing public and mid-market corporations in various commercial disputes, including contract, UCC, trade secret, tax and licensing matters in state and federal courts. In addition, Mr. Seitz has extensive experience in defending insurance companies in matters throughout the United States. He also has experience defending large securities class action cases, high-exposure wrongful death/personal injury actions, and white-collar criminal defense matters

On May 15, 2020, the House passed the Health and Economic Recovery Omnibus Emergency Solutions Act, or “HEROES Act”, which is a 1,815-page bill that affords $3 trillion in relief to consumers and businesses impacted by COVID-19. The bill includes a number of provisions, including another round of $1,200 payments to most Americans, hazard pay for frontline workers, and funding for local and state governments. The bill also includes proposed amendments to the Fair Credit Reporting Act (“FCRA”). Unfortunately, these well-intentioned amendments to FCRA do not appear to have been thought through well and, practically speaking, would have dire consequences if implemented.

First, the bill prohibits both consumer reporting agencies (“CRAs”) or data furnishers from reporting of any adverse information that occurred during a “major disaster” declared by the President. With respect to CRAs, the bill states:
Continue Reading HEROES Act Includes Potentially Disastrous FCRA Amendments

In a consumer class action, the United States Court of Appeals for the Seventh Circuit was called on to decide whether “consumer reporting agencies to determine the legal validity of disputed debts.” Denan v. Trans Union LLC, No. 19-1519, 2020 U.S. App. LEXIS 14930, at *1-2 (7th Cir. May 11, 2020). Joining the First, Ninth, and Tenth Circuits, the Seventh Circuit found that “a consumer’s defense to a debt is a question for a court to resolve in a suit against the [creditor,] not a job imposed upon consumer reporting agencies by the FCRA.”  Id. at *12 (internal quotations omitted).

In Denan, the plaintiffs obtained loans from tribal payday lenders. Those loans charged interest rates in excess of 300% and, according to the loan agreements, were governed by tribal law, not state law. The plaintiffs claimed that because the loans violated state usury laws, they were “legally invalid.”  Id. at *4. But instead of bringing suit against the tribal lenders, who may have been protected by sovereign immunity, the plaintiffs brought a putative class action against consumer reporting agency (or CRA) Trans Union, alleging it violated 15 U.S.C. § 1681e(b) for failing to assure the “maximum possible accuracy” of reported information.
Continue Reading Credit Reporting Agencies Are Not Required to Determine What Is a “Legally” Valid Debt

In response to the COVID-19 pandemic, many lenders are being flexible when it comes to consumers’ making payments. The Consumer Financial Protection Bureau (“CFPB”) added some structure to those efforts by releasing a policy statement that outlines the responsibility of credit-reporting companies and furnishers during the COVID-19 pandemic.

The CFPB seeks to encourage lenders to continue to work with consumers affected by COVID-19 with various forms of payment flexibility, including allowing consumers to defer or skip payments, whether as required by the CARES Act or voluntarily. And the CFPB’s statement recognizes that many furnishers and credit reporting agencies are also experiencing hardships due to the pandemic, including staffing and resource constraints.
Continue Reading Credit Reporting During the COVID-19 Pandemic: What You Need to Know

In Johnston v. Midland Credit Mgmt., No. 16-437, 2017 U.S. Dist. LEXIS 10610 (W.D. Mich. Jan. 26, 2017), the court recently dismissed a class action complaint alleging a violation of the Fair Debt Collection Practices Act (“FDCPA”) for lack of Article III standing. Johnston is notable as the first FDCPA claim dismissed for lack of Article III standing in the Sixth Circuit. In addition, Johnston provides an interesting case study regarding some of the issues that may need to be considered prior to filing a motion premised on lack of Article III standing.
Continue Reading A Case Study – Some Things to Consider When Challenging a Putative Consumer Class Action in Federal Court for Lack of Article III Standing