Article Title: Me? a Collection Attorney? Hardly! I Am a Litigator With High Visibility Clients. the Fdcpa Is for 'debt Collectors'!
| Jurisdiction | United States,Federal |
| Citation | Vol. 2002 No. 05 Pg. 05-4 |
| Pages | 05-4 |
| Publication year | 2002 |
05-4 (2002). Article Title: Me? A Collection Attorney? Hardly! I Am a Litigator With High Visibility Clients. The FDCPA is for 'Debt Collectors'!
May, 2002
Article Title: Me? A Collection Attorney? Hardly! I Am a
Litigator With High Visibility Clients. The FDCPA is for
'Debt Collectors'
Author: Richard B. Frandsen
Article Type
Articles
Article
When you think about it, nearly all attorneys are
"collectors." Lawyers are hired to improve the
state of their clients, usually through a transfer of funds
or property. Although we might not think of ourselves as
"collection attorneys," those we pursue may
disagree
The Fair Debt Collection Practices Act or "FDCPA"
has become a favorite day-time talk show topic. Each show
features a poor soul appearing (with his attorney) to
tearfully tell his story of a collector committing
unspeakable horrors in an attempt to collect a debt. The
host, and of course the attorney, will invariably end each
show with a discussion of that ray of hope called the FDCPA
and the money waiting for a debtor if a violation can be
found.
When Congress targeted collection agency abuses in the
1970's, they sought to alleviate criminal threats,
harassing night time or repetitive calls, and efforts to
collect debts through employer or neighbor contacts. As years
passed and language was interpreted by the courts, coverage
appears to have expanded. And most notably, attorneys have
lost their exempt status. Now, even the most careful
attorney, one claiming never to have collected a debt, may
find himself in the cross hairs of that tearful debtor and
his attorney.
The FDCPA attempts to bridle the collector in his efforts to
collect a consumer, or retail, debt. It does so by providing
specific disclosures to the debtor, by regulating contacts
with the debtor, and offering substantial remedies for the
violation of these provisions.
Who and What Is Covered by the Act?
The Act defines a 'debt' as:
. . . any obligation or alleged obligations of a consumer to
pay money arising out of a transaction in which Money,
property, insurance, or services which are the subject of the
transaction are primarily for personal, family, or household
purposes, whether or not such obligation has been reduced to
judgment. (15 U.S.C. 1692a (5))
A 'debt' within the meaning of the FDCPA is a
consumer debt only. It is a debt based on personal, family or
household purposes. It is important to note that commercial
debts are not covered by the Act. However, this distinction
is not always easy to draw as reflected in the numbers of
appellate cases addressing the issue. To be safe, unless the
collector knows without any doubt that a debt is commercial
and not consumer, the debt should be seen as a consumer or
retail debt. Otherwise, the collector is taking a foolish
risk.
The next threshold is the determination of who is a 'debt
collector.' The Act covers:
. . . any person who uses any instrumentality of interstate
commerce or the mails in any business the principal purpose
of which is the collection of debts, or who regularly
collects or attempts to collect, directly or indirectly,
debts owed or due or asserted to be owed or due another.
Until 1986, an attorney doing collections did not need to
worry about the restrictions of the FDCPA. An attorney's
concerns were limited to the representation of collection
agency clients who were being accused of harassment,
vulgarities, or trickery. But in that year, attorneys lost
their exemption through an amendment to section 1692a(6)(f)
of the Act, forcing them to come to grips with the
restrictions imposed by the Act.
The key word for an attorney is "regularly." Does
the attorney or firm regularly collect debts for another
entity? If so, the Act applies and its restrictions are
imposed. What must be understood is that
"regularly" does not equate with "a
majority" or "substantial portion" of the
practice. What will be looked at is the volume of collection
business performed by the firm even though the collection
portion of the firm's entire practice may be relatively
small.
Normally a creditor's own collection efforts would not be
regulated by the Act. Its provisions are exclusively reserved
for the third party collector. But a creditor can become
liable for violations if an employee of the creditor uses a
name which would lead the debtor to think the debt is being
collected by a third party. Certainly a creditor sending
demands...
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