Daily Digest - July 21, 2026

🎂 Happy birthday to: Andrew Worrall of Phillips & Cohen Associates, Ltd., Mark Westrum of Radius Global Solutions, Michael Grammer of Resurgent Capital Services, and Christi Crothers of FCR Collection Services.

NEW AI SURVEY

Have 90 seconds to help me out? Take this quick survey, sponsored by TCN, on how you are using AI, what you like about it, and what frustrates you.

New Digital Communications Report

The industry is optimistic. Placements are expected to climb. Consumers, it turns out, are more ready for digital than the businesses serving them.

New AI Event!

I am thrilled to announce a new live conference I am hosting. It’s an AI conference for the credit and collection industry. It will be held in Denver this September. Check out getbrainstorming.com for more information. And watch the video below to see me showcasing my outdoor skills.

If you are interested in being a speaker at the event, click here.

Servicer, College Facing FCRA Suit Over Fraudulent Student Loan That Wouldn't Go Away

• How long can the tail of a data breach be? Try 14 years. A student loan servicer and a community college are facing an FCRA suit from a plaintiff who claims a fraudulent loan tied to a 2012 breach keeps reappearing on his credit report no matter how many times he successfully disputes it.

• More details here.

• This series is sponsored by WebRecon

A MESSAGE FROM TCN

TODAY’S WEBINAR

UPCOMING WEBINARS

Appeals Court Vacates $500k Jury Award Against Collector in FCRA Case

• A half-million dollar jury verdict, gone. The Tenth Circuit ruled that a consumer claiming identity theft never proved the debt was actually inaccurate, holding that disputed information must be "objectively and readily verifiable" as wrong before a furnisher's investigation is ever put under the microscope. The decision hands furnishers a powerful new defense in identity theft disputes.

• More details here.

Senators Demand Answers From CFPB Over Complaint Portal Changes They Say Benefit Credit Bureaus

• Sens. Elizabeth Warren and Andy Kim are accusing the CFPB of rewriting its complaint portal to the credit bureaus' specifications, pointing to new dispute-first warnings and authentication hurdles that mirror requests made by the CDIA and the Big Three. With credit reporting complaints making up 85% of everything the Bureau receives, the answers due July 30 could reshape the complaint pipeline for the entire industry.

• More details here.

Most Enterprises Have Pulled Back a Live AI Agent: Report

• Getting an AI agent live is no longer the hard part; keeping it live is. New research finds 74% of enterprises that deployed a customer-facing AI agent have had to pull it back, and the failure rate is even higher among companies with the most mature governance programs. The leading causes, data exposure and hallucinations, should sound very familiar to anyone in collections compliance.

• More details here.

Debt Collection Lawsuit Filings Kept Climbing in 2025, and Reform Advocates Are Paying Attention

• Collection lawsuit filings rose in seven of eight tracked states last year, with Missouri, Texas, and Massachusetts all well above pre-pandemic levels and one debt buyer now responsible for nearly a quarter of all filings in the sample. Pew is using the numbers to push states toward new documentation mandates, garnishment protections, and even GPS-verified service of process.

• More details here.

State Appeals Court Rules Citing Fake AI-Generated Cases is Sanctionable, Regardless of Intent

• An Arizona appeals court has ruled that filing AI-hallucinated case citations is sanctionable even without any intent to deceive, striking every bad citation from a litigant's brief and ordering him to pay the other side's fees. The court's warning that AI is "an unreliable narrator and researcher" is one every legal department using these tools should read.

• More details here.

Judge Tosses FDCPA, FCRA Suit, Won't Hunt for 'Truffles' in 237 Pages of Exhibits

• A Pennsylvania federal judge dismissed, with prejudice, an FDCPA and FCRA suit built on a three-page complaint and 237 pages of exhibits, noting the "inconsistent" balances at the heart of the case appeared to be two different accounts. His reasoning: judges are not pigs, and they will not hunt for truffles buried in the record.

• More details here

WORTH NOTING: Following Apple, Samsung is releasing its own credit card ... More Americans say they are living a "nightmare" and not a "dream" in retirement ... A look at how consumers feel about back-to-school shopping ... Want to spend less on gas? Drive slower ... Higher prices do not always mean higher quality ... Not having enough PTO is preventing parents from spending meaningful moments with their kids ... New York City isn't the most expensive place to live in America anymore ... A look at dozens of markets where home prices are falling.

Trailer Tuesday, part I

Trailer Tuesday, Part II

Webinar Recap: When the Consumer Has AI Too: Pro Se Plaintiffs and LLM-Built Cases

The panel explored how self‑represented litigants (pro se plaintiffs) are increasingly using generative AI tools to draft complaints, motions, and discovery requests. While these tools produce polished filings, they often misguide consumers, leading to frivolous claims, unrealistic expectations, and higher costs for defendants.

Panelists noted that AI has contributed to a sharp rise in filings, particularly in statutory claims under FDCPA, FCRA, and TCPA. As Brendan Little observed, “90% of the pro se cases I’m seeing are AI‑assisted.” Loraine Lyons cited research showing a 50% increase in pro se filings since ChatGPT’s release.

Discovery requests have become more burdensome, with litigants demanding documents far beyond legal entitlement. Avanti Bakane described “motion after motion that doesn’t make sense,” while Sarena Gaylor highlighted excessive validation demands. Judges remain lenient, often allowing multiple amended complaints, which prolongs litigation.

The panel agreed that while AI empowers consumers, it also creates inefficiencies and false confidence. As Lyons put it, “AI is encouraging whatever the position of this pro se plaintiff is and giving them an unrealistic expectation of what they think the claim is worth.”

🧠 Key Takeaways:

• Train teams to spot AI‑generated filings: Look for dense citations, unusual formatting, or references to statutes that don’t apply.

• Standardize responses to overbroad discovery: Prepare templates and protocols to efficiently handle unreasonable requests.

• Leverage AI defensively: Use AI tools to detect patterns, manage deadlines, and filter frivolous claims, effectively “fighting fire with fire.”

This webinar underscored that AI is reshaping litigation dynamics. For collection agencies, debt buyers, and financial institutions, adapting strategies and deploying AI defensively will be critical to managing costs and maintaining compliance in this new environment.

Did you know you can get full access to all of my past webinars, along with transcripts and summaries of each, for only $29/month? Sign up to be a premium subscriber today!

The Daily Digest is sponsored by TCN