What you should know about the Federal Fair Debt Collection Practices Act.

• Author: Sinsley, Barbara A.

Until recently, most lawyers had never heard of the Federal Fair Debt Collection Practices Act(1) and had certainly never had occasion to review the Florida Consumer Protection Practices Act.(2) Then in April of 1995, the U.S. Supreme Court handed down an eye-opening decision in Heintz v. Jenkins, 115 S.Ct. 1489 (1995), and lawyers around the country began to contact their malpractice carriers and review their United States Code Annotated. There remain, however, those attorneys, either oblivious to the federal and state "Debt Collection Acts," or who simply surmise the acts do not apply to them. This article is intended not only for those who assume they are in an elite class to whom the acts do not apply, but also for those who are familiar with the acts. This article focuses on the federal act as the state act essentially mirrors the federal act.

Attorneys as Debt Collectors

The Federal Fair Debt Collection Practices Act, 15 U.S.C. [subsections] 1692 et seq. (FDCPA), was enacted in 1977 in an effort to curb the abusive practices by third party debt collectors.(3)

In 1986, the FDCPA was amended to include attorneys under the definition of "debt collectors" covered by the Act.(4) Before this amendment, the FDCPA contained an express exemption for lawyers that indicated that the term "debt collector" did not include "any attorney-at-law collecting a debt as an attorney on behalf of and in the name of a client." In 1995, the Supreme Court in Heintz v. Jenkins held that the FDCPA applied to attorneys who "regularly" engaged in consumer-debt-collection activities, even when that activity consists of litigation.(5)

The problem with Heintz is that it never explains how the FDCPA applies to litigation. For instance: Why would you have to attach the FDCPA notification required by 15 U.S.C. [sections] 1692g to a lawsuit giving the debtor 30 days to verify the debt when the rules of civil procedure require a response within 20 days? Do you have to repeat the "mini-Miranda" notice required by 15 U.S.C. [sections] 1692e(11) on all succeeding documents sent to the debtor, including court-issued documents? Do you have to give the debtor the "mini-miranda" at hearings? What about statutory notice letters such as the 3-day eviction letter, is the state statute pre-empted? You get the idea.

Clearly, the Supreme Court was not aware of the confusion that would be caused by the brevity of its decision. Fortunately, prior to and after the Heintz ruling, the circuit courts, as well as the Federal Trade Commission (FTC), have attempted to give guidelines to attorneys involved in debt collection.

What Is a Consumer Debt?

As an initial matter, the FDCPA applies only to "consumer debts." A "consumer" is defined by 15 U.S.C. [sections] 1692a(3) as "any natural person obligated or allegedly obligated to pay any debt." Further, the FDCPA defines a "debt" under 15 U.S.C. [sections] 1692a(5) as "any obligation or alleged obligation of consumer to pay money arising out of transactions in which the 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 a judgment." A "debt collector" is defined in 15 U.S.C. [sections] 1692a(6) as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose is to collect debts or who regularly attempts to collect debts."

The FTC, in its Statements of General Policy or Interpretation of Staff Commentary of the Fair Debt Collection Practices Act, issued a list of certain examples of what the word "debt" was intended to define.(6) This term included:

1) overdue obligations such as medical bills;

2) a dishonored check that was tendered in payment for goods or services acquired which were used primarily for personal, family or household purposes; and

3) a student loan because the consumer is purchasing "services."

Under the definition of "debt," this author believes that included as "consumer" debt collection activities are evictions on residential properties and the replevin of a personal automobile or household items as both involve "personal, family or household" interests. The collection of child support, however, has been specifically exempted from the...