Fair Debt Collection: What Every Lawyer Should Know
| Publication year | 1988 |
| Pages | 453 |
1988, March, Pg. 453. Fair Debt Collection: What Every Lawyer Should Know
Agreat deal of attention recently has been given to the Fair Debt Collection Practices Act ("FDCPA" or "Act").(fn1) Although the FDCPA has been in effect since 1978, the recent interest has been generated by a 1986 amendment which excised from the Act a provision excluding attorneys from its definition of "debt collector."(fn2) Now that lawyers fall within the definition of "debt collector" under the Act, an attorney who "regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another"(fn3) is subject to liability under its provisions. A small wave of consternation has rippled through the legal community as lawyers have tried to figure out how and when the Act applies to them.
In all instances in which the debt sought to be collected is incurred in connection with a consumer obligation (one that is primarily for "personal, family or household purposes"),(fn4) the attorney pursuing collection of the debt on behalf of a client is exposed to civil liability for damages, costs and attorney fees, plus "additional damages," not exceeding $1,000, for violations of the FDCPA.(fn5) The Act does not specify what kind of damages are "additional" damages nor is it clear from the provision whether the $1,000 limitation is per claim or per action (including all claims which may be joined under applicable rules of civil procedure).(fn6)
Enforcement of the FDCPA is delegated to the Federal Trade Commission ("FTC"). Violations of the Act are deemed to be unfair or deceptive acts under § 5 of the Federal Trade Commission Act.(fn7) The FTC may pursue the same remedies available for violation of FTC trade regulations, including cease-and-desist orders, civil actions and penalties up to $10,000 per violation.(fn8)
Perhaps the most distressing aspects of the FDCPA are its scheme for requiring notice to a debtor of the debtor's rights under the Act and its provisions regulating communications with the debtor. These statutory requirements make even the simplest collection case a potential labyrinth of conflicting time periods.
For example, assume that Attorney has been retained by Client, a landlord, to evict Tenant from her apartment for nonpayment of rent. Under the unlawful detainer provisions of CRS § 13-40-101 et seq., Tenant is entitled to three days' notice before an action in unlawful detainer is commenced.
Attorney calls Tenant on the telephone, identifies himself and informs Tenant that unless the rent is paid, she will be evicted and sued for damages. Tenant denies owing rent...
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