debt collection

Consumer Fraud Whistleblowers Wanted

The Michigan Supreme Court just breathed new life into the state’s once-aggressive Consumer Protection Act (“MCPA”).

From 1999 until last week (July 31, 2026), the MCPA was almost entirely toothless. Even if the MCPA prohibited a deceptive or fraudulent business practice–it outlawed many dishonest billing, advertising, and sales scams–a business holding any sort of business license typically couldn’t be sued successfully under the Act. This was because, in 1999 an activist, “business-friendly” Michigan Supreme Court interpreted a subsection of the Act to mean it did not apply to any licensed industry. Almost every business is legally required to have a state license in Michigan: health care providers, car dealers and service shops, gas stations, banks, chiropractors, lawyers, accountants, child care providers, even barbers. The act was effectively dead.

In a new decision released last week, Attorney General v. Eli Lilly & Co., the Michigan Supreme Court found that licensed businesses can be liable under the MCPA for fraudulent and deceptive practices. This was a common-sense reading of the text of the MCPA itself, which the court acknowledged had been wrongly interpreted in the 1999 decision and cases following it.

The MCPA contains broad prohibitions of deceptive trade practices:

1. Misrepresenting the identity, origin, or quality of what’s sold — false claims about source, sponsorship, certification, geographic origin, ingredients, benefits, grade, style, or passing off used goods as new; also disparaging a competitor by false statements of fact. § 903(1)(a)–(f)

2. Deceptive advertising, pricing, and inducements — advertising with no intent to sell as represented, bait advertising without a quantity disclosure, phony price-reduction claims, “free” offers with buried conditions, rebates contingent on post-closing events, and prize offers tied to sitting through a sales pitch. § 903(1)(g)–(i), (r), (w), (ff)

3. Manufactured need and high-pressure tactics — claiming a repair or replacement is necessary when it isn’t, fabricating a home defect that endangers the family, delivering unrequested goods as though they were ordered, and coercion through the timing and nature of a sales presentation. § 903(1)(j)–(l), (aa)

4. Obscuring legal rights, credit terms, and warranties — creating confusion about a party’s rights, obligations, or remedies, about credit terms, or about a salesperson’s authority to close; unconspicuous warranty disclaimers; unknowing waivers of statutory rights; and having the consumer sign acknowledgments the merchant knows to be false. § 903(1)(m)–(p), (t), (v)

5. Material omissions and false impressions — failing to disclose a material fact the consumer couldn’t reasonably discover, failing to disclose facts made material by the seller’s own affirmative representations, and any statement that leaves the consumer reasonably believing the state of affairs is other than it is. § 903(1)(s), (bb), (cc)

6. Failure to deliver what was promised — promising prompt or timely performance the merchant knows won’t happen, gross discrepancies between oral pitch and written contract, failure to provide promised benefits, and failure to promptly refund deposits or release security interests after cancellation. § 903(1)(q), (u), (y)

7. Exploiting vulnerability and grossly excessive pricing — taking advantage of a consumer’s disability, illiteracy, or inability to understand the language of the agreement, and charging a price grossly in excess of market. § 903(1)(x), (z)

8. Violations of specific statutory mandates — environmental and “degradable/recyclable” marketing claims, home and telephone solicitation rules, conditioning a sale on disclosure of a Social Security number, card-receipt truncation, identity theft protection act violations, misleading tribute-band billing, and the Act’s own cross-referenced sections. § 903(1)(dd)–(ee), (gg)–(ll)

Some of these practices also violated other laws. But the MCPA came with a powerful private enforcement mechanism: unlike other laws prohibiting the same misconduct, the MCPA required the offending business to pay the attorney fees of the defrauded consumer. This was designed to incentivize lawyers to take consumer fraud cases to court, and to enable consumers to hire attorneys even when there were not huge amounts of money at issue. No one in their right mind would pay an attorney $400 per hour to sue a company over a $900 overcharge, even if the overcharge was outright fraudulent. But if the offending business had to pay those attorney fees, that’s a game changer. The MCPA tilted the field in favor of the consumer to keep Michigan’s consumer-facing businesses honest.

For more than 25 years, the MCPA was ineffective. Unscrupulous business owners and executives knew it was ineffective, and consumers were defrauded and deceived by businesses at an alarming and increasing rate. From inscrutable and misleading medical bills to systematically denied insurance claims and everything in between, consumers were mostly out of luck when it came to holding a bad business accountable. A lawyer wouldn’t take your case unless the amount of money you lost was either six figures or more and a slam-dunk case, or you agreed to pay their hourly rate–typically hundreds of dollars per hour. Consumer lawsuits were few and far between, relying on sparse federal consumer laws that only applied to a narrow set of transactions.

That changes now. After the Eli Lilly decision restoring the MCPA prohibitions, we as consumer protection attorneys, and you as consumers and insiders, have the opportunity to make Michigan a place where honesty and fairness are expected, are the norm. A place where deceiving consumers to get their money is rare, but is punished appropriately when it occurs.

Consumer fraud and deceptive practices are often hard for the consumer to even identify. Confusing language in agreements, fast talking, misdirection and outright lies may prevent the consumer from knowing anything about how it is they’re being cheated. But they’re left with the conviction that the business they’ve dealt with cheated them and it has cost them money.

Sometimes consumer fraud and deception are systematic within a business organization–known to insiders but difficult or impossible for the consumer to find out on their own. Unscrupulous businesses may train employees to fudge numbers, change a billing code, charge the client for a service not provided, use a deceptive sales pitch, or otherwise cheat, in ways that unfairly cost the consumer money. Some businesses may incentivize such misconduct through their compensation structure, and look the other way as employees deceive consumers by not performing work the consumer paid for them to perform.

These are only a few examples, but they point up an important truth: insiders–people with detailed knowledge of a deceptive or fraudulent business practice–have been given a potent tool to bring an end to that practice. In short, if you’ve had enough of your employer cheating the individuals and families it deals with, the restoration of the MCPA means that firms like Westbrook Law PLLC can represent the defrauded consumers–in individual cases or class actions–and bring lawsuits to punish the bad business. Those lawsuits sometimes bankrupt the business; in other instances, the business may survive but end the practice.

Enforcement of the MCPA, if done thoroughly, will result in better, more honest and transparent businesses that serve their customers better, statewide, over the long run. Can you imagine a day-to-day life in which you didn’t routinely feel like a business was trying to scam you? That is our vision at Westbrook Law, one case at a time.

If you have detailed knowledge of a deceptive, unfair, or fraudulent business practice that involves consumer transactions, we would love to hear from you. Contact Us

Federal Court Grants Preliminary Approval of $9MM Settlement in Debt Collection Abuse Class Action

On November 3, 2025, the United States District Court for the Western District of Michigan preliminarily approved a class-action settlement valued at approximately $9 million in debt reductions, credits, and payments to over 5,200 Michigan consumers who were overcharged interest on judgments entered against them. Final approval of the settlement is set to be heard by the court on March 9, 2026.

Westbrook Law PLLC brought the case, VanderKodde v. Mary Jane M. Elliott, P.C., against two of the largest debt buyers in the nation, LVNV Funding and Midland Funding, and the collection law firm that represented them, in 2017. The complaint alleges that while Michigan law allowed judgment interest ranging from 2-4% during the relevant time period, the defendants calculated judgment interest at an unlawfully high 13% rate and proceeded to collect the excess interest from consumer debtors through garnishments of bank accounts and tax refunds. The lawsuit alleged that this practice violated the federal Fair Debt Collection Practices Act (“FDCPA”) and Michigan state debt collection laws.

The parties have agreed to a settlement that recalculates all class members’ judgment balances based on the lawful interest rate, a reduction of approximately $7 million, and further reduces each class member’s balance by $500, totaling over $2 million. Class members whose judgment balances are eliminated by these reductions are entitled to an additional payment of $150 each. In the settlement, the defendants also agree to pay the attorney fees of class counsel and the costs of administering the settlement.

Class action settlements are subject to court approval for fairness, and the court’s preliminary approval is the first in a two-step approval process. The court’s November 3, 2025 order reflects its conclusion, based on the parties’ submissions, that the proposed settlement is fair to the class members and that class counsel and the named plaintiffs have acted in the best interests of the class.

After more than eight years of hard-fought litigation, the class settlement in VanderKodde comes as a welcome victory for Michigan consumers.

TJW

Mortgage Servicer Disregarded Loan Modification Agreement and Is Liable for Debt Collection Abuses, Federal Court Finds

The United States District Court for the Western District of Michigan issued an important published opinion early this month in the case of Macholtz v. Carrington Mortgage Services, LLC, finding, after a “journey through a thick summary judgment record” that detailed a “15-year struggle between plaintiff and a series of lenders,” that the mortgage servicer defendant’s refusal to acknowledge a loan modification agreed to by its predecessor made it liable to the consumer plaintiff under various state and federal consumer protection laws. The lawsuit, filed in early 2019 by Westbrook Law PLLC in Grand Rapids, Michigan, seeks damages for the plaintiff and to unwind a foreclosure sale.

The lawsuit challenged the conduct of the mortgage servicer, Carrington Mortgage Services, LLC, and the bank it worked for, Wilmington Savings Fund Society FSB. Carrington qualified as a “debt collector” under the Fair Debt Collection Practices Act (“FDCPA”) because it began servicing the mortgage after the predecessor servicer, CitiMortgage, had declared a default. CitiMortgage had also previously entered into a modification agreement with the plaintiff, but failed to ever “on-board” the modification or acknowledge its existence. Eventually, after demanding to be paid huge sums of money that were not justified under the modified terms of the loan, Carrington and Wilmington foreclosed on the plaintiff’s Berrien County home, which he had owned for 22 years.

The lawsuit alleged violations of the Real Estate Settlement Procedures Act (“RESPA”); Truth in Lending Act (“TILA”); FDCPA, Michigan Mortgage Brokers, Lenders and Servicers Licensing Act (“MBLSLA”); Michigan Regulation of Collection Practices Act (“MRCPA”), and common-law wrongful foreclosure and breach of contract. The court found violations of TILA, FDCPA, MBLSLA, and MRCPA on the part of Carrington and Wilmington and set the case for trial regarding damages and other remedies.

Consumer advocates in Michigan have often lamented the erosion of protections for homeowners under state and federal law over the last 20 years. It is true that consumers in Michigan have fewer protections than they did during the 1980s and 1990s. However, while holding mortgage servicers and banks accountable remains challenging, the Macholtz opinion shows that the remaining federal and state protections can be potent tools for redressing consumer abuses.

TJW

Class Action Against Michigan Collection Attorneys and Debt Buyers Reinstated by United States Court of Appeals for the Sixth Circuit

Today the United States Court of Appeals for the Sixth Circuit released its opinion in VanderKodde v. Mary Jane M. Elliott, P.C., a lawsuit brought by Westbrook Law PLLC in 2017 alleging widespread unlawful practices by prominent Michigan collection law firms Mary Jane M. Elliott, P.C. and Berndt & Associates, P.C., along with their clients, large debt buyers Midland Funding, LLC and LVNV Funding, LLC. The lawsuit alleges that the defendants routinely added unlawful and grossly excessive amounts of interest to judgments they obtained against Michigan consumers in state district courts, and that this practice violated the federal Fair Debt Collection Practices Act.

We believe tens of thousands of Michigan consumers have been affected by this practice and that millions of dollars may have been unlawfully collected from them.

At the trial court level, the defendants raised a procedural defense based on the “Rooker-Feldman doctrine,” which disallows federal district courts from acting as appeals courts for state-court judgments. The district court agreed and dismissed the lawsuit. We appealed the dismissal to the Sixth Circuit.

By its opinion today, the Sixth Circuit reversed the dismissal of the lawsuit, effectively reinstating the case and allowing it to proceed. The court emphasized that the plaintiffs in our case were complaining of unlawful conduct of the defendants independent from any state-court judgment: their calculation of judgment interest at an excessive rate and their subsequent attempts to collect excessive debt amounts through garnishments.

The VanderKodde case reflects the importance of class action litigation where thousands of consumers have been harmed by a routine practice by a debt collector or financial institution. While many individual class members may have suffered only small harms, the total amount unlawfully collected by the defendants through this practice may have been enormous. We intend through the VanderKodde lawsuit to pursue justice and compensation for all those harmed.

TJW

New Class Action Lawsuit Against Mortgage Servicer Real Time Resolutions Claims Threats to Harm Credit Ratings Broke the Law

Mortgage loan servicers typically collect and process payments for mortgage loans on behalf of the owners of those loans. If your loan statements come from Ocwen, Nationstar (now using the quizzical alias “Mr. Cooper”), or Seterus, just to name a few, you are dealing with a servicer. Real Time Resolutions, Inc., another servicer, is the latest target of a consumer class-action lawsuit filed by Westbrook Law PLLC in the United States District Court for the Western District of Michigan, Bushouse v. Real Time Resolutions, Inc.

The new lawsuit alleges that Real Time violated federal and state law through its routine practice of threatening consumers with reporting obsolete, negative credit information about them. Whereas the law does not allow credit reporting of most negative items that are past seven years old, 15 U.S.C. § 1691c(a), the complaint alleges that Real Time continues to threaten negative reporting well beyond the seven-year mark. This practice, which could frighten consumers into paying obsolete debts they no longer have any legal obligation to pay, is alleged to violate the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e; the Michigan Occupational Code, M.C.L § 339.915; and the Michigan Mortgage Brokers, Lenders, and Servicers Licensing Act, M.C.L. § 445.1672. The plaintiff seeks damages for herself and other Michigan citizens who received the threatening communications.

Our expertise in credit reporting law–i.e., the federal Fair Credit Reporting Act–and consumer collection law informed this lawsuit and many others on behalf of Michigan consumers. If you have concerns about whether a practice by a debt collector or mortgage servicer is fair or lawful, contact us for a consultation.

TJW

Police Department Changes Repossession Policy in Response to Civil Rights Lawsuit Brought by Westbrook Law PLLC

When a repossession agent unexpectedly arrived at our client’s home, the client physically intervened to prevent the unlawful repossession from taking place. Then the agent called the police. When City of Wyoming officers responded to the call, they prevented our client from intervening further and told him and the agent that the agent was free to complete the repossession.

Westbrook Law PLLC brought suit in January of 2018 on behalf of the client, alleging violations of 42 U.S.C. § 1983 and the Fourth and Fourteenth Amendments by the city and the responding officers. The case, captioned Patterson v. City of Wyoming, ended in a settlement in September of 2018, with the city paying damages as well as implementing a new policy for responding to similar calls.

Due process requires that state actors such as police do not assist with private repossessions without a court order where the vehicle owner disputes the lien holder’s right to repossess the vehicle. This is especially true when the repossession attempt causes a breach of the peace and thereby becomes unlawful under Michigan law. Such a dispute is a civil matter to be resolved in a lawsuit, not a criminal matter, and responding police officers are required to do no more than is necessary to maintain public safety.

If you have had a similar experience with police officers assisting in a repossession, contact us.

TJW

House Financial Services Committee Evaluates Bill to Exempt Collection Lawyers from Fair Debt Collection Practices Act/Westbrook Law of Grand Rapids, Michigan

In December, House Bill H.R. 4550, entitled “Practice of Law Technical Clarification Act of 2017,” was introduced by sponsors Vincente Gonzalez (D-Tex.) and Alexander Mooney (R-W. Va.). If passed, the bill would dramatically limit the legal protections to consumers currently provided by the federal Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692o (“FDCPA”), by completely exempting collection lawyers from liability. Under current law, collection lawyers are treated the same as other debt collectors, and prohibited from engaging in abusive, misleading, or unfair collection practices. See Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010). Westbrook Law PLLC has filed several lawsuits against collection law firms that violated the FDCPA. Those claims would not exist under the law as amended by H.R. 4550, and there is little question that the amendment would enable new and intensified abuses by collection law firms to go unchecked.

H.R. 4550 is currently being evaluated by the House Financial Services Committee, which may approve or kill the bill. Westbrook Law PLLC is actively engaging with committee members to ensure they are aware of the anti-consumer nature of this bill and to request that they do their part to prevent it from becoming law.

TJW

Supreme Court Releases Consumer-Unfriendly Opinion in Santander – What Does It Mean?/Westbrook Law of Grand Rapids, Michigan

Yesterday, the U.S. Supreme Court released an opinion highly anticipated by consumer lawyers as well as the debt collection industry, in the case of Henson v. Santander Consumer USA, Inc. This case dealt with the question of whether a purchaser of defaulted debts, which then attempts to collect those debts from consumers, counts as a “debt collector” that is subject to strict consumer protections provided in the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”).

To grasp the potential impact of this case, one needs to understand the structure of the consumer debt collection industry as it exists today:

The first step is origination, when the consumer first incurs a debt to a creditor such as a bank, credit card issuer, other lender, wireless provider, or cable company.

When the consumer defaults on a debt–usually by failing to pay–one of two things may happen: (1) the original creditor may hire a third-party debt collection company to attempt to collect the debt, generally through telephone calls and collection letters; or (2) the original creditor may attempt to collect the debt itself for some period of time.

Often, once the debt becomes sufficiently aged, the creditor sells, or assigns, the debt to a debt buyer. The debt buyer pays the creditor only a fraction of the face value of the debt, then attempts to recover as much of the debt as possible from the consumer by various means, often including telephone calls and collection letters.

The final stage in the process is a lawsuit filed by collection attorneys acting on behalf of the debt buyer. Most of these lawsuits are not contested, and result in default judgments that are slowly collected through wage, bank account, and tax refund garnishments.

It has long been settled law that, under the FDCPA, third-party debt collection companies and collection attorneys ARE “debt collectors.” Most federal courts found that debt buyers were “debt collectors” as well, including the United States Court of Appeals for the Sixth Circuit, which establishes precedent for federal courts in Michigan. Generally, circuit precedent found that creditors collecting their own debts could NOT be “debt collectors” unless a rare exception applied.

All of this matters for one basic reason: the FDCPA restricts what “debt collectors” are allowed to do, and creates powerful remedies for consumers when they do not comply with the FDCPA. The FDCPA creates various protections for consumers; for example, it requires debt collectors to identify themselves as debt collectors in communications to consumers, disallows certain conduct in collection lawsuits, outlaws attempts to collect debts no longer owed, limits consumer harassment by telephone, and disallows unfair and fraudulent conduct in connection with debt collection. Consumers harmed by violations of the FDCPA are entitled to sue, and can recover a statutory penalty as well as their attorney fees.

In yesterday’s Santander decision, the Supreme Court unanimously held that debt buyers are not automatically “debt collectors” subject to the FDCPA. According to the opinion, penned by newest Justice Neil Gorsuch, this is so because debt buyers are attempting to collect a debt that is owed to them, and thus are creditors, even though they are not the original creditors.

Taken in isolation, the Santander holding might seem catastrophic for consumers besieged by collection attempts from debt buyers (including such large players as Midland Funding, LVNV Funding, Portfolio Recovery Associates, and others), because the protections of the FDCPA would be unavailable. This would enable debt buyers to use, with impunity, the same harassing and unfair collection methods that “debt collectors” are not allowed to use under the FDCPA. It is true that the Santander decision is beneficial to some debt buyers at the expense of consumers; however, its impact is limited. Justice Gorsuch carefully points out in the opinion that the court’s decision does NOT mean that debt buyers are NEVER “debt collectors.” Indeed, the text of the FDCPA appears clear that debt buyers ARE “debt collectors” if their “principal purpose … is the collection of any debts.” 15 U.S.C. § 1692a(6). With respect to the largest buyers of defaulted credit card debt–i.e., Midland Funding, LVNV, and PRA–an experienced consumer lawyer should easily be able to prove that their “principal purpose” is debt collection; and they are therefore “debt collectors” subject to FDCPA restrictions.

While the Santander decision does not make the consumer advocate’s job easier, and is likely to spur pernicious innovations in the debt buying and debt collection industry, it is hardly the death knell for the FDCPA. Consumer advocates and watchdogs, including us at Westbrook Law PLLC, will continue to find ways to keep abuses in check.

TJW

Collectors Still Pursuing Debt after Bankruptcy Discharge? It’s Illegal./Westbrook Law of Grand Rapids, Michigan

Each year, hundreds of thousands of individuals with overwhelming debts file for Chapter 7 or Chapter 13 bankruptcy in order to regain their financial freedom. The usual goal of bankruptcy is to have one’s debts “discharged,” or declared legally unenforceable and effectively nullified. This is intended to allow the debtor a “fresh start” to their financial affairs.

But a discharge of debts in bankruptcy does not always stop debt collectors, who may continue to contact the debtor by phone or letter, or even file legal proceedings, after a debt has been discharged. These post-discharge collection attempts rob the debtor of the “fresh start” he or she fought for in bankruptcy, and are often unlawful, violating various state and federal laws designed to protect consumers from abusive debt collection tactics.

If you are still being chased by debt collectors to pay a debt that was discharged in bankruptcy, Westbrook Law PLLC may be able to make the collection efforts stop, punish the debt collectors for violating the law, and get monetary compensation for you. Contact us for more information or a free consultation.

If you have not filed for bankruptcy but wonder if it may be right for you, contact us for a referral to a qualified bankruptcy law firm.

TJW

Certification Granted in FDCPA Class Action Babbitt v. ClearSpring Loan Services, Inc./Westbrook Law of Grand Rapids, Michigan

Today, the United States District Court for the Western District of Michigan issued an order granting class certification in a Fair Debt Collection Practices Act (“FDCPA”) case against default mortgage servicer ClearSpring Loan Services, Inc. Westbrook Law PLLC member Theodore J. Westbrook, along with veteran consumer lawyer Phillip C. Rogers, were appointed class counsel.

The case, filed by Mr. Westbrook in late 2015, alleges that ClearSpring engaged in a pattern and practice of violating the FDCPA through failing to disclose on its monthly loan statements that ClearSpring was a debt collector. The FDCPA, 15 U.S.C. Section 1692e(11), specifically requires all debt collectors to make such a disclosure in each communication with a debtor, in an effort to minimize consumer confusion. As a default mortgage servicer–a company that obtains the right to collect payments after the loan is delinquent or otherwise in default–ClearSpring is a debt collector that must comply with the FDCPA.

The specialized default servicing industry has been growing along with large lenders’ eagerness to offload non-performing loans. With it, the likelihood of servicers failing to understand or comply with debt collection laws may also be on the rise. As more class actions are certified, industry players will be forced to bring their practices in line with the strict requirements of the FDCPA.