[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-1-en-105":3,"doc-seo-276636-105":53,"doc-detail-276636-en":126},{"code":4,"msg":5,"data":6},0,"success",[7,14,19,24,29,34,39,44,49],{"id":8,"doc_module":9,"doc_module_name":10,"category_name":11,"show_sort_weight":12,"slug":13},11,1,"Template","Presentations",90,"presentations",{"id":15,"doc_module":9,"doc_module_name":10,"category_name":16,"show_sort_weight":17,"slug":18},12,"Resumes",80,"resumes",{"id":20,"doc_module":9,"doc_module_name":10,"category_name":21,"show_sort_weight":22,"slug":23},14,"Invoices",70,"invoices",{"id":25,"doc_module":9,"doc_module_name":10,"category_name":26,"show_sort_weight":27,"slug":28},15,"Posters",60,"posters",{"id":30,"doc_module":9,"doc_module_name":10,"category_name":31,"show_sort_weight":32,"slug":33},16,"Social Media",50,"social-media",{"id":35,"doc_module":9,"doc_module_name":10,"category_name":36,"show_sort_weight":37,"slug":38},17,"Forms",40,"forms",{"id":40,"doc_module":9,"doc_module_name":10,"category_name":41,"show_sort_weight":42,"slug":43},18,"Letters",30,"letters",{"id":45,"doc_module":9,"doc_module_name":10,"category_name":46,"show_sort_weight":47,"slug":48},21,"Paper Templates",5,"papers-templates",{"id":50,"doc_module":9,"doc_module_name":10,"category_name":51,"show_sort_weight":4,"slug":52},158,"General","general-158",{"code":4,"msg":54,"data":55},"ok",{"site_id":56,"language":57,"slug":58,"title":59,"keywords":60,"description":61,"schema_data":62,"social_meta":119,"head_meta":121,"extra_data":123,"updated_unix":125},105,"en","collection-letter-litigation-risk-overview","Collection Letter Litigation - Risk Overview","","Collection letter litigation risk centers on credit unions facing class action settlements alleging defective Notices of Disposition and Notices of Deficiency. The document outlines how UCC Article 9 notice requirements—especially the Notice of Disposition and the Notice of Deficiency Balance—drive disputes when content is inaccurate, incomplete, misordered, or noncompliant with state procedures. It details common defects, improper public vs private sale classification issues, potential damages and penalties, and practical risk mitigation questions for ongoing review, correct required items, and staff training.",{"@graph":63,"@context":118},[64,80,101],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":41,"@type":70,"position":76},"https://docshare.wps.com/template/letters/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/collection-letter-litigation-risk-overview/276636/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/collection-letter-litigation-risk-overview/276636.png","ImageObject",442,249,{"name":88,"@type":89},"Jiven","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/pdf","2026-10-18","2026-09-15",true,{"@type":98,"interactionType":99,"userInteractionCount":47},"InteractionCounter",{"@type":100},"ViewAction",{"@type":102,"mainEntity":103},"FAQPage",[104,110,114],{"name":105,"@type":106,"acceptedAnswer":107},"Which UCC notices are most frequently tied to litigation and settlements?","Question",{"text":108,"@type":109},"Litigation commonly alleges defective Notices of Disposition and defective Notices of Deficiency. These notices are required under UCC provisions and can trigger major class action settlements when they do not meet requirements.","Answer",{"name":111,"@type":106,"acceptedAnswer":112},"Why does improper public vs private sale classification matter?",{"text":113,"@type":109},"If the Notice of Disposition indicates “public and/or private sale,” the credit union may not be compliant. State laws generally require disclosure as either a “public sale” or a “private sale,” and public sales require additional details such as date, time, and place.",{"name":115,"@type":106,"acceptedAnswer":116},"What potential damages or penalties may credit unions face?",{"text":117,"@type":109},"Depending on the state under UCC 9-625 and 9-626, possible outcomes include waiving the remaining deficiency, returning deficiency payments, statutory penalties (e.g., $500 or more per impacted member), return of service charges, and return of 10% of the original principal amount.","https://schema.org",{"og:url":78,"og:type":120,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":122,"canonical":78},"index,follow",{"doc_id":124,"site_id":56},276636,1790188288,{"code":4,"msg":5,"data":127},{"doc_id":124,"user_id":128,"nickname":88,"user_avatar":129,"doc_module":9,"category_id":40,"category_name":41,"doc_title":59,"doc_description":61,"doc_content":130,"file_id":131,"file_url":132,"file_type":133,"file_size":134,"view_count":47,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":79,"language":135,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":136,"faqs":137,"seo_title":138,"seo_description":61,"update_tm":139,"read_time":73},1099513958607,"https://ap-avatar.wpscdn.com/avatar/100002390cf8733938c?x-image-process=image/resize,m_fixed,w_180,h_180&k=1778829742770036399","Collection Letter Litigation  \nRisk Overview  \nLitigation and class action lawsuits  \nagainst credit unions alleging  \ndefective Notices of Disposition  \n(Notice of Sale or Notice of Intent to  \nSell Property) and defective Notices of  \nDeficiency have resulted in settlements  \ninto the millions of dollars.  \nEmerging Litigation Trends  \nClass action lawsuits alleging defective Notices of Disposition (Notice of Sale or Notice of Intent to sell repossessed collateral and defective Notices of Deficiency) can significantly impact credit unions.  \nThe Notice of Disposition – required by UCC 9-613 / 9-614-has been the primary cause of litigation issues. This notice references that the credit union has repossessed the property and notifies the member that the property will be sold.  \nAlso problematic in litigation has been the Notice of Deficiency Balance – UCC 9-616-which must explain that the repossessed property has been sold and that the member still owes for the balance due on the loan.  \nCommon Collection Letter Issues  \n• Notices contain inaccurate information  \n• Credit union staff removes sections of content that they deemno important or redundant  \n• Specifics regarding the sale of collateral does not appropriately establish if the sale is public or private Notices do not reference the member’s right to an accounting of the amount due  \n• Outside attorneys used have not discovered deficiencies  \n• Language and procedures do not follow the requirements of the applicable state  \n• Improper order, or missing, items in the Notices of Deficiency  \nTypical Scenario  \n• Member goes into default on a loan secured by a vehicle, and the credit union repossesses the collateral. Credit union sends a letter to notify the member that the vehicle will be sold  \n• After the sale, credit union sends a letter notifying the member of the deficiency balance to be paid. Credit union pursues legal action to collect the deficiency  \n• Member hires an attorney to represent him / her in the legal proceedings, and the attorney discovers the defects in the Notice of Disposition and Notice of Deficiency letters  \n• Member sues, or countersues the credit union for violations of the state Uniform Commercial Code (UCC) Article 9  \n• Lawsuit becomes a class action consisting of all the borrowers that received defective notices over the course of as many as six years  \n• Credit union incurs defense costs in additional to potential damages or penalties  \n10007752-0618 (rev 0921) © 2021 CUNA Mutual Group, All Rights Reserved.  \nCollection Letter Litigation  \nIMPROPER CLASSIFICATION  \nSome lawsuits have focused on improper classification of how repossessed vehicles are being sold. If the Notice of Disposition letter indicates “public and/or private sale” then you may not be compliant. State laws require the sale to be disclosed as a “public sale” or a “private sale.”  \nDealer-only auctions are usually considered private sales. Public sales could include auctions open to the public, selling vehicles in the credit union’s parking lot, or internet sales that are open to the public. Public sales need additional disclosure information including date, time and place. Vehicle sales changing from one type (e.g. , Public) to the other (e.g. , Private) likely require a second Notice of Disposition.  \nPotential Credit Union Damages or Penalties  \nUnder UCC9-625 and 9-626 (which vary by state), these potential damages or penalties exist:  \n• Waiving any remaining deficiency balance  \n• Returning any payments of deficiency balances  \n• Statutory penalties such as $500 or more for each impacted member  \n• Return of service charges (some interpret this to be interest paid)  \n• Return of 10% of the principal amount of the original debt  \nIn fact, one class action lawsuit example resulted in settlement in excess of $5 million.  \nRisk Mitigation Questions / Tips  \n• Do you regularly review your collection letters?  \n• Do Notices of Disposition contain the eight required items","cbCain4qf1rWe7m2","https://ap.wps.com/l/cbCain4qf1rWe7m2","pdf",356544,"English","# Litigation Risk Overview\n## Emerging Litigation Trends\n## Common Collection Letter Issues\n## Typical Scenario\n## Improper Classification\n## Potential Credit Union Damages or Penalties\n## Risk Mitigation Questions / Tips\n## Commonly Asked Question: Which State Applies?","[{\"question\":\"Which UCC notices are most frequently tied to litigation and settlements?\",\"answer\":\"Litigation commonly alleges defective Notices of Disposition and defective Notices of Deficiency. These notices are required under UCC provisions and can trigger major class action settlements when they do not meet requirements.\"},{\"question\":\"Why does improper public vs private sale classification matter?\",\"answer\":\"If the Notice of Disposition indicates “public and/or private sale,” the credit union may not be compliant. State laws generally require disclosure as either a “public sale” or a “private sale,” and public sales require additional details such as date, time, and place.\"},{\"question\":\"What potential damages or penalties may credit unions face?\",\"answer\":\"Depending on the state under UCC 9-625 and 9-626, possible outcomes include waiving the remaining deficiency, returning deficiency payments, statutory penalties (e.g., $500 or more per impacted member), return of service charges, and return of 10% of the original principal amount.\"}]","Collection Letter Litigation - Risk Overview | PDF",1789494513]