Circuit Tackles Debt Collection Law

CHICAGO (CN) - The Seventh Circuit consolidated four cases presenting nine questions under the Fair Debt Collection Practices Act, some of which sparked "considerable controversy at the circuit level."

The questions fall into three overlapping groups involving the application of the Act to lawyers, the proper treatment of settlement offers and the Act's role in deciding whether debt collection practices are deceptive.

Judge Posner concluded that any written notice sent to a lawyer must contain the same information that would be required by the Act if the notice were sent to the consumer directly.

The court also ruled that a representation by a debt collector that's not likely to deceive a competent lawyer should not be actionable. Finally, Posner ruled that the circuit can reject a claim of deception on the pleadings. See ruling in Evory v. RJM Acquisitions Funding LLC.

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