Last Week, This Morning

September 22, 2025

Below you will find several key developments in the financial services industry, including related developments in information privacy and data security, from the past week. We add an "Amicus Brief(ly)¹" comment to each item, where we briefly (see what we did there?) note for friends (and again?) of CounselorLibrary the important takeaways from the developments outlined in the email. Our legal reporters - CARLAW, HouseLaw, InstallmentLaw, PrivacyLaw, and BizFinLaw - provide more comprehensive, real-time updates of federal and state laws, regulations, litigation, and other industry items of interest. For a personal guided tour and free trial of any of these legal reporters, please contact Michael Willer at 614-855-0505 or mwiller@counselorlibrary.com.

A California appellate court recently held that a debtor had standing to seek statutory damages against a debt collector under California's Rosenthal Fair Debt Collection Practices Act because a statutory violation of the Rosenthal Act is sufficient to confer standing upon a consumer, regardless of whether there was actual injury.

A debt collector sent a collection letter containing statutorily required language in 8-point type, smaller than the type size used to inform the consumer of his specific debt. California's Consumer Collection Notice laws (California Civil Code §§ 1812.700 et seq.) require third-party debt collectors subject to the federal Fair Debt Collection Practices Act to provide a notice to debtors that must include a specific description of debtors' rights, and the type size used in the notice must be at least the same type size that is used to inform the debtor of his or her specific debt. After receiving the noncompliant notice, the debtor in this case sued the debt collector, alleging that its failure to comply with the Consumer Collection Notice laws violated the Rosenthal Act. The trial court granted summary judgment in favor of the debt collector, concluding that the debtor lacked standing because of a failure to allege any actual injury resulting from the noncompliant notice.

The California appellate court reversed, agreeing with the debtor that standing for a plaintiff seeking statutory damages under the Rosenthal Act arises from a debt collector's violation of the statute, not from the plaintiff's suffering of actual injury. According to the appellate court, the Rosenthal Act requires debt collectors to comply with certain provisions of the federal FDCPA and specifically subjects them to the remedies in Section 1692k. Construing Section 1692k of the federal FDCPA, the appellate court found that the "Legislature has deemed a violation to be 'an injury sufficient to confer standing - independent of actual damages - and provide[d] a modest monetary award as a remedy ... for those motivated to pursue it.' Section 1692k distinguishes between 'any actual damage' [sustained by a debtor] resulting from a Rosenthal Act violation and statutory damages - additional damages that the court may allow." "[A] debt collector is only liable for actual damages if any exist. But by declaring a debt collector liable for 'the sum of' actual and statutory damages, section 1692k 'signifies that actual damages only add' to their liability, and 'not that the absence of actual damages negates' liability." Because a debt collector's violation of the Rosenthal Act makes it liable for statutory damages, regardless of actual damages, the appellate court concluded that a statutory violation was sufficient to confer standing on the debtor.

Amicus Brief(ly): Attentive readers of LWTM will likely have noticed that this outcome in the California state court differs from the trend in federal FDCPA standing cases, where the federal courts have insisted on some credible allegation of actual consumer harm to find that the plaintiff has standing under Article III. Before those standing cases, which started to get traction in the aftermath of the Hunstein line of cases (especially in the "copycat" cases plaintiffs filed once the Eleventh Circuit affirmed the lower court's finding in the original Hunstein case that the consumer plaintiff had standing notwithstanding the absence of a concrete injury), plaintiffs often obtained modest settlement payments from debt collectors to exit cases of technical violations early. Based on this California decision, it looks like those technical violations may still generate some settlement payments because allegations of a technical violation of the Rosenthal Act - in this case, printing a notice in a font that was not big enough - are enough to confer standing.

The California, Colorado, and Connecticut attorneys general recently announced a joint investigation of businesses' compliance with the Global Privacy Control, a browser setting or browser extension that a consumer can install that automatically signals to a business's website the consumer's request to opt out of the sale or sharing of his or her personal information to third parties, eliminating the need to opt out on each website individually.

As part of the privacy investigation, the AGs sent letters to certain businesses requesting them to immediately comply with the GPC. The GPC allows consumers to exercise their rights under privacy laws like the California Consumer Privacy Act. The CCPA, with some exceptions, prohibits businesses from selling or sharing consumers' personal information after they receive their opt-out request, and businesses must wait at least 12 months before asking the consumer to opt back in to the sale or sharing of personal information. Consumers have two methods for submitting requests to opt out of the sale or sharing of their personal information: enabling the GPC or opting out one business at a time through a link on the business's website.

Amicus Brief(ly): This action by the three state attorneys general underscores the trend toward increasing consumer control over personal data and that the states will remain active in enforcement while the Consumer Financial Protection Bureau focuses on different priorities. California, Colorado, and Connecticut in particular have been active in enforcement of their relatively recent data privacy laws, and they want companies to know it. The AGs point to the fact that 40 million people are using the GPC to manage their opt-outs, implying that the high usage reflects the GPC's effectiveness. Companies doing business in those three states should review this announcement and ensure that they are complying with state privacy laws.

The Alaska Supreme Court recently held that the Consumer Protection Unit of the Alaska Attorney General's Office lawfully issued an investigative subpoena to a car dealership that allegedly violated the state's unfair and deceptive trade practices law, broadening the AG's power to investigate consumer protection violations.

The CPU had received an anonymous letter alleging that a car dealership failed to include certain documentation fees in its advertised prices for motor vehicles, in violation of the state's motor vehicle advertising laws and its unfair and deceptive trade practices law. Attached to the letter was an email exchange between a prospective car buyer and the dealership purportedly confirming that it charged additional fees that were not included in its advertised prices for vehicles. The CPU opened an investigation, and a CPU employee went to the dealership to conduct an undercover investigation of the allegations. Afterward, the CPU issued a subpoena to the dealership under Alaska Statutes § 45.50.495 (a provision governing the investigative power of the AG under the unfair and deceptive trade practices law) directing it to produce specific business documents concerning its advertising practices. The dealership filed a petition to quash the subpoena, arguing that the CPU did not have the requisite "cause" to issue it. The trial court denied the petition to quash, and the dealership appealed.

Section 45.50.495(a) provides that, if the AG "has cause to believe that a person has engaged in, is engaging in, or is about to engage in a deceptive trade practice," the AG may take certain actions, such as requesting certain statements under oath, examining a person under oath, or examining property, books, or documents, among other things. Subsection (b) describes the AG's subpoena power, but the "cause to believe" language included in subsection (a) is not included in subsection (b). The dealership argued that the AG must have "cause to believe" that a deceptive trade practice has occurred, is occurring, or will occur before it can issue a subpoena. It argued that the anonymous complaint letter did not establish "cause to believe" because it lacked reliability, and the undercover investigation did not establish the requisite "cause to believe" because the CPU was not permitted to conduct undercover investigations.

The Alaska Supreme Court refused to decide whether subsection (b) of the statute incorporates the "cause to believe" standard because it concluded that, regardless of whether the statute requires it, there was sufficient "cause" for the subpoena based on the anonymous complaint letter and attached email correspondence with the dealership. The court refused to read into the Alaska statute that "reasonable cause" or "good cause" is a requirement before the AG can issue a subpoena or begin a consumer protection investigation, noting that when other states have interpreted similar statutes differently, it is because their statutes include specific language requiring "reasonable cause" or "good cause."

The Alaska AG stated in his news release about the case: "[This ruling] confirms that our office has the tools to demand the truth when consumers are at risk. If businesses mislead customers, we can and will get the records we need to hold them accountable."

Amicus Brief(ly): The instances of enforcement from state AGs of unfair and deceptive acts and practices laws, especially against vehicle dealers, are becoming more frequent, but the underlying issues have not changed. State laws generally require that vehicle price advertising be clear and not deceptive and that dealers actually have vehicles available for purchase at advertised prices - nothing tricky. Some state laws specifically require that price advertisements include specific fees in the advertised price of a vehicle or a statement that the advertised price does not include those fees. The outcome of this case in the Alaska Supreme Court is not altogether surprising, given the broad enforcement authority of the state AG. The best approach for dealers in Alaska and elsewhere concerned about AG enforcement actions based on price advertising is to review state laws that address advertising and ensure that advertisements include complete and accurate information about vehicle prices.

On September 18, the Court of Appeals of Wisconsin held that a vehicle-secured creditor's pre- and post-sale notices provided to debtors pursuant to Wisconsin's Uniform Commercial Code adequately described the deficiency as the difference between the loan balance and the vehicle's sale price, despite the debtors' contention that the notices should have described the deficiency as the difference between the loan balance and the vehicle's fair market value.

The debtors obtained a loan from the creditor in order to pay for repairs to their vehicle. The loan was secured by their vehicle. After they defaulted, the creditor repossessed the vehicle and sent the debtors a pre-sale notice required by Section 409.614 of Wisconsin's UCC, which stated how their deficiency would be calculated once the vehicle was sold. The pre-sale notice included "safe-harbor" language set forth in Section 409.614(3), stating, in part, that the amount the creditor obtains from the sale of the vehicle would reduce the amount the debtors owed. After the sale of the vehicle, the creditor sent the debtors a post-sale notice required by Section 409.616 of the UCC, informing them of their deficiency balance and how it was calculated by subtracting the vehicle's sale price and associated costs from the outstanding balance.

The debtors brought a class action lawsuit against the creditor, alleging that its pre- and post-sale notices were insufficient under the UCC because they did not comply with Section 425.210 of the Wisconsin Consumer Act. Specifically, they alleged that, consistent with Section 425.210, the notices were required to describe the deficiency as the difference between the loan balance and the vehicle's fair market value rather than as the difference between the loan balance and the vehicle's sale price. The trial court granted summary judgment in favor of the creditor, and the debtors appealed.

The Wisconsin appellate court affirmed, concluding that Section 425.210 of the WCA does not alter what is required by the UCC's notice provisions and, therefore, the creditor's notices were sufficient under the UCC. Section 425.210 provides that "[i]f the creditor is entitled to a deficiency judgment pursuant to [Wis. Stat. Section] 425.209(1), the creditor shall be entitled to recover from the customer the deficiency, if any, remaining after deducting the fair market value of the collateral from the unpaid balance." The appellate court found that the creditor's pre-sale notice complied with the safe-harbor language found in Section 409.614(3), which, as that subsection explicitly states, "provides sufficient information" to satisfy the requirements of Section 409.614(1), and rejected the debtors' argument that Section 425.210 of the WCA nullifies the language in Section 409.614(3) stating that the safe-harbor "provides sufficient information." The appellate court noted that Section 425.210 "does not mention notice requirements in any way. Instead, it addresses how to calculate a deficiency judgment in certain court proceedings under the WCA after the collateral securing a transaction has been disposed of." The appellate court also noted that the WCA expressly provides that the UCC governs transactions unless superseded by a particular provision of the WCA.

For the same reasons, the appellate court also rejected the debtors' argument that Section 425.210 of the WCA alters the post-sale notice requirements under Section 409.616 of the UCC, reiterating that Section 425.210 "governs judicial actions brought to recover deficiency judgments after the collateral has been disposed of, but does not alter the UCC's safe-harbor provision."

Amicus Brief(ly): This Wisconsin case stands in stark contrast to the Williams case that came out of the Massachusetts Supreme Judicial Court several years ago. In the Williams case, the court found that a finance company's repossession notices had to refer to the fair market value of the vehicle - not necessarily the amount received for the vehicle at sale after repossession - both in the pre-sale notice describing how the finance company would determine the deficiency after sale and in the post-sale Explanation of Surplus or Deficiency. We can argue about whether the Massachusetts court landed on the correct result, but that die is cast. In this case, the Wisconsin court correctly looks at the statutory language referring to the deficiency judgment, not the deficiency balance, to find that compliance with the UCC safe harbor provision for the pre-sale notice is sufficient, especially in the absence of language in the statute directing creditors to provide some kind of notice about the calculation of a deficiency judgment. This matter is settled for now in Wisconsin, where the court confirmed that the UCC safe harbor language works for the Notice of Intent to Sell. An open question for another day is whether the post-repossession sale proceeds reflect the fair market value as determined by the market (that should be the case), especially in the absence of statutory guidance in Wisconsin about how a creditor should otherwise determine the "fair market value" of repossessed collateral.

---

¹ For the unfamiliar, an “Amicus Brief” is a legal brief submitted by an amicus curiae (friend of the court) in a case where the person or organization (the “friend”) submitting the brief is not a party to the case, but is allowed by the court to file the brief to share information or expertise that bears on the issues in the case.