Consumer protection lawsuits surge as attorneys debate what's driving increase

Federal consumer protection lawsuits reached a decade-high in 2025, fueled by a surge in credit reporting and telemarketing claims. But attorneys disagree over whether the increase reflects greater consumer harm, reduced federal enforcement or litigation strategies designed to capitalize on favorable court rulings.

A new Lex Machina report found that filings jumped 31% to 20,353 cases last year, with more than 12,000 additional lawsuits filed during the first half of 2026. Fair Credit Reporting Act lawsuits rose 44% to 7,750 cases in 2025, while Telephone Consumer Protection Act filings surged 63% to 2,748.

Claire Johnson Raba, an assistant professor at the University of Illinois Chicago School of Law and co-principal investigator of Princeton University's Debt Collection Lab, said several factors may be contributing to the increase, including the Trump administration's retreat from federal consumer protection enforcement.

"I think it's a confluence of things that are occurring," Raba said in an interview.

She pointed to an April 16, 2025, memorandum from Consumer Financial Protection Bureau Chief Legal Officer Mark Paoletta directing the agency to focus enforcement on cases involving measurable financial harm.

The memorandum called for a 50% reduction in supervisory examinations, prioritized fraud involving identifiable victims and shifted resources away from enforcement that state authorities could undertake. It also deprioritized oversight of consumer data, medical debt, student loans and digital payments.

Raba said the changes could encourage state attorneys general and private lawyers to pursue violations that might previously have drawn federal scrutiny.

"In the face of retrenchment and a lack of enforcement at the federal level across many areas of consumer protection and protection for employee rights, civil rights, we see states and private attorneys stepping up to fill that void and file additional cases," she said.

But Raba cautioned against attributing the increase solely to federal policy changes, noting that filings began rising before the administration shifted its enforcement priorities.

She suggested that plaintiffs' attorneys may also be adapting to stricter standing requirements established by the U.S. Supreme Court.

In TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), the court held that plaintiffs seeking damages in federal court must demonstrate concrete harm rather than merely a statutory violation.

The ruling complicated consumer class actions involving credit reporting and other statutory claims, particularly when plaintiffs could not establish that inaccurate information had been disclosed or caused a legally recognizable injury.

Raba said attorneys may now be developing more effective ways to plead claims that satisfy those requirements. Growing public awareness of how personal information is collected, sold and used could also be contributing to the increase, she said.

Consumer protection attorney Shennan Kavanagh likewise emphasized the growing role of private litigation as federal enforcement contracts.

"When the federal agencies and laws that exist to protect consumers are gutted, consumers are left exposed to increased exploitation," Kavanagh said in written comments.

She said class actions have become an increasingly important enforcement tool, particularly as artificial intelligence creates new risks involving consumer information.

"Consumer data has become a valuable currency, and misuse of that data impacts every aspect of people's lives, including whether they qualify for credit, housing or jobs," Kavanagh said.

California is likely to remain a major venue for those disputes, she added, given its concentration of technology companies and comparatively strong consumer protection laws.

The Central District of California was the nation's busiest federal district for consumer protection litigation from 2023 through 2025, according to Lex Machina, with 4,682 cases. Those included 1,385 FCRA claims, 863 TCPA cases and 832 lawsuits alleging violations of the Fair Debt Collection Practices Act.

But Eric J. Troutman, a defense attorney at Troutman Amin LLP who specializes in TCPA litigation, disputed the suggestion that rising telemarketing filings reflect greater consumer harm or declining government enforcement.

Instead, he attributed the increase to favorable class certification decisions and plaintiffs' attorneys seeking settlements by threatening substantial statutory damages.

"The spike (and now potential crash) in TCPA class action filings has nothing to do with actual harm to consumers or a rise (or fall) in unwanted calls," Troutman said in written comments.

He said some high-volume plaintiffs' firms have pursued strategies emphasizing settlements within 90 days rather than prolonged litigation.

Troutman also argued that recent judicial decisions narrowing potential TCPA liability could reverse the trend.

Although Lex Machina recorded another 1,658 TCPA lawsuits during the first half of 2026, Troutman said subsequent developments suggest filings could decline sharply.

He cited disagreements among federal courts over whether text messages qualify as telephone calls under the TCPA's do-not-call provisions, as well as rulings questioning whether those protections extend to cellular telephones.

He also pointed to judicial scrutiny of litigation practices involving the Heidarpour Law Firm.

In August, a federal judge in Oregon ordered the firm and a plaintiff to preserve electronic devices and communications related to TCPA litigation in Wilson v. Freeway Insurance Services of America LLC, No. 6:25-cv-01869.

Troutman predicted that TCPA class action filings could finish 2026 below their 2025 total despite the sharp increase earlier this year.

The broader rise in consumer litigation also extends to debt collection.

Lex Machina reported that FDCPA filings increased 13% to 4,648 cases in 2025, although they remained well below their 2017 peak.

Stephanie Carroll, directing attorney of consumer rights and economic justice at Public Counsel, has raised concerns about the volume of debt collection litigation in California state courts.

In a letter urging the Little Hoover Commission to investigate the state's debt collection system, Carroll and other consumer advocates estimated that debt collectors and debt buyers filed approximately 112,000 limited civil cases in Los Angeles County Superior Court during the 2024-25 fiscal year. Those cases accounted for more than 70% of limited civil filings, excluding unlawful detainer actions.

The letter also estimated that fewer than 2% of defendants in debt collection cases have legal representation.

Advocates warned that the prevalence of default judgments allows collectors to obtain enforceable judgments even when debts may be inaccurate or inadequately documented.

The competing explanations underscore the difficulty of using lawsuit filings as a measure of consumer harm.

Consumer advocates view private litigation as increasingly important to enforcing statutory protections amid reduced federal oversight. Defense attorneys contend that favorable court rulings and the economics of class action litigation can drive filings independently of underlying misconduct.

Whether the surge continues may depend as much on the courts' treatment of consumer claims as on changes in federal enforcement priorities.