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Unfair and Deceptive Acts and Practices: 11.9.2.4 First Amendment and Other Issues in Defamation Claims by Dealers

News media perform an important public service when they publicize information about consumer fraud. When a dealer who is the subject of such a report sues for defamation, First Amendment issues may arise. The United States Supreme Court has held that a libel plaintiff who is a public figure must show that a news media defendant acted with actual malice.1433 Even persons who are not public figures may have to show actual malice if they voluntarily thrust themselves into the vortex of a public issue.

Federal Deception Law: 6.2.4 Challenges to the TCPA

The TCPA has been repeatedly upheld against First Amendment and vagueness challenges,41 as have state laws that impose similar restrictions.42 Courts have held that the TCPA serves a compelling governmental interest in protecting the well-being, tranquility, and privacy of the home.43

Unfair and Deceptive Acts and Practices: 11.9.4.3 Due Process and Other Challenges to UDAP Enforcement Procedures

Courts have rejected arguments that state UDAP enforcement actions are based on arbitrary or discriminatory enforcement.1477 A defendant in a civil UDAP enforcement action does not have a due process right to appointed counsel.1478 There may, however, be a right to counsel when the state seeks imprisonment of a defendant in a contempt proceeding for violation of a UDAP injunction.1479

Unfair and Deceptive Acts and Practices: 11.9.5 Other Constitutional Challenges

Sellers have been uniformly unsuccessful in challenging UDAP regulations as invalid delegations of legislative authority1484 or as improper exercises of statutory authority by the state attorney general or other rule-making agency.1485 Many decisions reject claims that UDAP statutes or regulations violate equal protection rights.1486 UDAP statutes awarding attorney fees and costs to one side but not the other do not violate the Equal Protecti

Fair Debt Collection: 11.4.3 A Wide Range of Parties May Bring FDCPA Actions

A private right of action is available not only to the “consumer,” that is, the putative debtor, but also, in some cases, to “any person” adversely affected by an FDCPA violation.239 Moreover, most FDCPA provisions protect not just consumers, but any person affected by violations occurring during the collection of consumer debts.

Fair Debt Collection: 11.4.4.4 Forms Suppliers, Repossessors, and Insurers

It is an FDCPA violation to design, compile, and furnish any form while knowing that the form will be used to create the false impression that a person other than the creditor (such as an attorney or a collection agency) is participating in the collection of the debt.274 An example of this conduct is someone who sends a default letter to a debtor portraying themselves as a debt collector when they actually have no involvement in the debt collection effort.

Fair Debt Collection: 11.7.1 Offers of Judgment in General

Rule 68 of the Federal Rules of Civil Procedure provides that, at any time at least fourteen days before trial, the collector may make “an offer to allow judgment on specified terms, with the costs then accrued.” An offer of judgment may be accepted within fourteen days by written notice. Then either party may file the offer and notice of acceptance together with proof of service, after which the clerk enters judgment.576

Fair Debt Collection: 11.7.3 Ambiguity in Defendant’s Offer of Reasonable Attorney Fees

Some debt collectors file offers of judgment which provide for damages and “costs,” but do not specifically mention the payment of the consumer’s attorney fees. The debt collector then asserts that acceptance of the offer of judgment waived the consumer’s right to recover attorney fees. The debt collector’s position is based on litigation under the Civil Rights Act, in which the term “costs” includes the plaintiff’s attorney fees for the purpose of an offer of judgment.

Fair Debt Collection: B.3.11 CFPB, Bulletin 2023-01: Unfair Billing and Collection Practices After Bankruptcy Discharges of Certain Student Loan Debts

This guidance focuses on unfair acts and practices in violation of the Dodd-Frank Act, where servicers collect on student loans that were discharged in bankruptcy. It also reminds servicers of the need for adequate policies and procedures to identify loans that are discharged by bankruptcy and to engage in proactive review and remediation where servicers identify errors.

Fair Debt Collection: 11.11.2.2.2 Numerosity

Federal Rule of Civil Procedure 23(a)(1) requires that “the class is so numerous that joinder of all members is impracticable.” Something over one hundred members is preferable, but there is no set minimum.887 A “[c]ourt does not need evidence of exact class size or identity of class . . .

Fair Debt Collection: 11.13.8.3 Establishing the Hourly Rate

In Tolentino v. Friedman,1253 the Seventh Circuit observed:

In order to encourage able counsel to undertake FDCPA cases, as Congress intended, it is necessary that counsel be awarded fees commensurate with those which they could obtain by taking other types of cases. . . . Paying counsel in FDCPA cases at rates lower than those they can obtain in the marketplace is inconsistent with the congressional desire to enforce the FDCPA through private actions, and therefore misapplies the law.

Fair Debt Collection: 11.14.2.1 Generally

This section focuses on whether court awards and settlements,1343 including cash awards, cancelled debt, and attorney fees, are taxable income to your client. Generally, all income is subject to tax unless specifically excluded by statute.1344 Most pecuniary awards in the consumer area are taxable, for example, statutory damages, lost wages, penalties, interest, and punitive damages.

Fair Debt Collection: 11.14.2.5.1 The general rule

Cancelled debts are taxable income unless a statutory exemption or other exclusion applies. Income from cancelled debts1357 is taxable because the debtor realizes an accession to wealth when the debt is cancelled.1358 Receipt of loan proceeds is not taxable because of the corresponding obligation to repay. When that obligation is cancelled, the debtor has an increase in wealth which is subject to tax.1359

Fair Debt Collection: 11.14.2.5.2 Statutory exemptions

There is no taxable income to the debtor for a cancelled debt when a statutory exemption applies.1361 These exemptions include when the debt is cancelled in a bankruptcy case; when the debtor is insolvent; for cancelled student loans in certain circumstances; when the loan relates to a primary residence and was cancelled (or an agreement to cancel existed) before January 1, 2026;1362 and when the cancellation relates to a purchase price reduction between a bu

Unfair and Deceptive Acts and Practices: 11.4.2.8.4 Delivering product different than consumer bargained for

An ascertainable loss requirement is satisfied if the consumer has purchased an item that is different from or inferior to that for which the consumer bargained.354 Some courts refer to this as the “benefit of the bargain” standard,355 a term used in fraud356 and warranty law.357 The ascertainable loss is then the difference between the value of the product as represented and the value of the product

Unfair and Deceptive Acts and Practices: 11.4.2.8.4a Where consumer would not have purchased the product but for the misrepresentation

Even if the product is worth what the consumer paid for it, many courts recognize that the consumer has suffered sufficient injury to assert a UDAP claim if the consumer would not have purchased the product but for the misrepresentation.380 The view that paying a price for something that has value but that the buyer does not want is an injury is consistent with longstanding principles of unjust enrichment and restitution.381 Thus, a consumer who buys a product because of a misrepresentation—for

Unfair and Deceptive Acts and Practices: 11.4.2.8.6 Overcharges, undisclosed costs, other payments induced by unfair or deceptive practices

Payment of an illegally high price is an injury that satisfies the UDAP statute.392 For example, paying a usurious rate of interest in violation of state law satisfies a UDAP statute’s injury requirement.393 The New Jersey Supreme Court rejected an argument that an overcharge is not an ascertainable loss unless the consumer has requested a refund.394 Excess interest that home buyers paid because the defendants procured an inflated appraisal that le

Unfair and Deceptive Acts and Practices: 11.4.2.8.11 Other losses

A consumer is “adversely affected” where the creditor fails to register the consumer’s automobile title, resulting in the consumer not getting notice of a mechanic’s lien.449 A defendant’s misappropriation of confidential business information may satisfy a damage precondition.450 Money spent on an attempt, frustrated by defendants’ acts, to acquire a business license is an ascertainable loss even if the license itself would not constitute a property interest.