1. Consumer Litigation Trends NCHELP EFC Student Loan Legal Meeting

2. 2 Consumer Litigation Trends Statistics Fair Debt Collection Practices Act (FDCPA) Fair Credit Reporting Act (FCRA) Telephone Consumer Protection Act (TCPA) Strategies Regulatory Enforcement Outlook

3. 3 Consumer Litigation Trends: Statistics FDCPATCPAFCRA 20099,135281,114 201010,9142341,070 201112, 0188131,883 2012 (through June 30) 5,7215321,194

4. 4 Consumer Litigation Trends: Statistics Most claims filed New York California Pennsylvania Florida Illinois Colorado Minnesota

5. 5 Consumer Litigation Trends: Statistics AllianceOne TCPA class settlement Up to $9M (max. $40/class member) $10,000 per named Plaintiff Costs and attorney’s fees Excessive overdraft fees litigation JP Morgan Chase ($110M) PNC Bank ($90M) US Bank ($55M)

6. 6 Consumer Litigation Trends: Strategies Pre-litigation demands vs. filing suit Federal vs. State court: artful pleading FOIA requests Bootstrapping claims Frequent filers Fishing

7. 7 Consumer Litigation Trends: Types of FDCPA Claims Voicemail messages Overshadowing and Confusion Letters returned as undeliverable Harassment/Abuse Call frequency Vicarious liability Company owner Service provider

8. 8 Consumer Litigation Trends: Types of FCRA Claims Accurate and complete information Flagging tradeline as disputed Conducting a “reasonable” investigation Permissible Purpose Reporting a bankruptcy

9. 9 Consumer Litigation Trends: Types of TCPA Claims Autodialed calls to cell phones Prior express consent Wrong party calls Prerecorded messages State v. Federal court Statute of limitations Insurance coverage debacle

10. 10 Consumer Litigation Trends: Regulatory Enforcement CO Attorney General $14 million settlement NY, WV, MN shut downs and fines FTC Consent Decrees Consumer Financial Protection Bureau Supervision and Examination authority Enforcement authority

11. 11 Consumer Litigation Trends: Regulatory Enforcement Settlement with 20 AGs and QuinStreet $2.5M civil penalty Website disclosure requirements http://www.cfpbmonitor.com/files/2012/07/quinstreetavc.pdf MD Collection Agency Licensing Board $1M civil penalty Dismissal of 3,500+ lawsuits CFPB $140M enforcement against CapOne

12. 12 Consumer Litigation Trends: Outlook Consumer Financial Protection Bureau Approach to complaints Student Loans – Ombudsman – Complaints Confidential Treatment of Privileged Information

13. 13 Consumer Litigation Trends: Outlook State and Federal tag teams Baiting, fishing and trapping Electronic Funds Transfers “Local” caller ID FDCPA Truth in Caller ID Act [47 USC § 227e]

14. 14 Consumer Litigation Trends: Questions? Wendy Badger Director, Corporate Compliance ECMC Group, Inc. (651) 325-3652 wbadger@ecmc.org