When the CFPB released their advisory opinion on “pay-to-pay fees” in debt collection, it caused confusion in the debt collection industry. The opinion emphasized the existing provision in the FDCPA that says debt collectors may not collect fees that are “incidental” to the principal amount of the debt unless expressly permitted by law or within the consumer’s agreement with the creditor.
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In Wakefield v. ViSalus, Inc., the Ninth Circuit considered whether a jury verdict of $925,200,000 for cumulative statutory damages under the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”) was constitutional in light of its harsh severity. After a three-day trial, the jury delivered a verdict against ViSalus, finding that it sent over 1.8 million prerecorded calls to class members without prior express consent, in violation of the TCPA. As the TCPA sets the minimum statutory damages at $500 per call, the total damage award against ViSalus was a staggering $925,220,000.
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