Teaching Consumer Credit Law in an Evolving Australian Economy

RECENT DEVELOPMENTS
CFR Part 226), which implements the regulation, mention filing
suit. Finding no statutory basis, the court refused to impose the
requirement that borrowers must file suit to comply with TILA’s
rescission requirements.
The court noted, however, that notice of cancellation does
not automatically void the loan agreement. Either the creditor
must acknowledge that the right of rescission is available, and the
parties must unwind the transaction, or the borrower must file a
lawsuit so the court may enforce the right to rescind.
DEBT COLLECTION
DEBT COLLECTOR MAY HAVE VIOLATED TELE-
PHONE CONSUMER PROTECTION ACT
Soppet v. Enhanced Recovery Co., LLC, 679 F.3d 637 (7th Cir.
2012).
FACTS: Plaintiffs Soppet and Tang each received numerous calls
on their respective cellular phones from an automated dialing
system used by the defendant to collect debts for the cellular
service provider—AT&T. It was clear from the messages that the
calls were intended for the previous subscribers to the plaintiffs’
phone numbers. In both cases, the original subscriber had given
consent to receiving collection calls on their cell phones, but the
collection activity occurred several years later, after the phone
numbers had been recycled for use by the Plaintiffs.
The Plaintiffs, on behalf of a class, sued the debt collector
under the Telephone Consumer Protection Act (TCPA). Section
227(b)(1) of the TCPA states: “It shall be unlawful for any
Only the consent of the
subscriber assigned
to a cell number at
the time of the call
justifies an automated
or recorded call.
person within the
United States . .
. if the intended
recipient is within
the United States
. . . to make any
call . . . using any
automatic dialing
system . . . to any
telephone number
assigned to a . . . cellular phone service . . . or any service for
which the called party is charged for the call.” Defendant
Enhanced Recovery contended that the phrase “called party” in
the TCPA referred to the actual debtors, and that their consent
to be called on the numbers remained in force after the numbers’
reassignment to Plaintiffs. The district court judge held that only
the consent of the subscriber assigned to a cell number at the
time of the call justifies an automated or recorded call. Enhanced
Recovery appealed, and the issue on appeal was whether a “called
party” under the TCPA refers to the person receiving the call or
the intended recipient of the call.
HOLDING: Affirmed.
REASONING: The TCPA curtails the use of automated dialers
to cell phones because cell phone users are often billed by the
minute as soon as the call is answered or if the call goes to
voicemail. This makes calling cell phones to collect on a debt
different from, and potentially more expensive, than landlines
for the recipients of these calls.
The court analyzed the language of the statute and found
that there was consistent use of “called party” in referring to the
current subscriber on the cell number or the person who actually
answered the call. The phrase was used seven times in the TCPA.
Four times, the language unmistakably denoted the “called
party” as the current subscriber, one of the times, the “called
party” was denoted as the one who answers the phone, and two
times the meaning of called party could not be determined. The
court ruled, however, that there was no evidence that “called
party” means “intended recipient,” as Defendant urged
The Defendant also argued that consent to call should
be effective until revoked. The court rejected this argument as
well, explaining that nobody, including the phone company,
has property rights to a phone number and consent to call a
number must come from the current subscriber.
Finally, the court rejected the defendant’s argument that,
if the court held for the plaintiffs, debt collectors’ costs would
rise because they would be effectively barred from ever using
automated collection systems. The court stated that it was not
the power of the court to write better laws but only to interpret
them.
LAW FIRM BRINGING REPLEVIN ACTION IS
SUBJECT TO FAIR DEBT COLLECTION PRACTICES
ACT
Rawlinson v. Law Office of William M. Rudow, LLC, 460 F.
App’x 254 (4th Cir. 2012).
FACTS: Plaintiff’s nephew defaulted on a loan from WFS
Financial (“WFS”) for the purchase of a motor vehicle.
Defendant Rudow then filed a replevin complaint in Maryland
district court on behalf of WFS against both Plaintiff and
her nephew, alleging that both parties had possession of
the vehicle. The complaint demanded return of the vehicle,
pursuant to the terms of the loan agreement, as well as recovery
of the loan principal, interest, late charges, and attorney’s fees.
The state court dismissed the replevin action against Plaintiff
because Defendant failed to present evidence that Plaintiff had
possession of the vehicle or had any liability to WFS.
Plaintiff then filed suit against Defendant in Maryland
circuit court alleging that the replevin action violated various
provisions of the Fair Debt Collection Practices Act (FDCPA).
Defendant removed the case to federal district court. The
federal district court dismissed Plaintiff’s action, and held that
Plaintiff could not recover because she neither owed the debt
nor had any financial interest in the vehicle. Plaintiff appealed.
HOLDING: Reversed and remanded.
REASONING: The court first examined the FDCPA’s definition
of “debt,” defined as an “obligation or alleged obligation of a
consumer to pay money arising out of a transaction in which
the money, property, insurance, or services which are the
Journal of Consumer & Commercial Law 47