The Fair Debt Collection Practices Act, 15 U.S.C. 1692, et seq. Richard J. Perr, Esquire

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1 I. Overview II. III. The Fair Debt Collection Practices Act, 15 U.S.C. 1692, et seq. Richard J. Perr, Esquire a. Private civil cause of action b. Regulates debt collectors conduct c. Protects consumers from false, deceptive, harassing and oppressive debt collection practices d. Provides for statutory damages as well as actual damages plus attorneys fees and costs e. Federal jurisdiction may be removed to federal court unless FDCPA claim is raised in a counterclaim to a suit for collection Legislative Intent a. Enacted in 1978 b. Abusive debt collection practices contributed to the number of personal bankruptcies, marital instability, loss of employment and invasions of personal privacy c. Existing laws inadequate to redress these injuries d. Activity carried on through interstate commerce e. Eliminate competitive advantage held by debt collectors engaging in illegal tactics Enforcement (15 U.S.C. 1692k) a. Strict liability b. One year statute of limitations c. Individual suit i. Statutory damages up to $1,000 per action ii. Actual damages iii. Reasonable attorneys fees and costs d. Class action i. The lessor of $500,000 or up to 1% of the net worth of the collector ii. Reasonable attorneys fees and costs e. Bona Fide Error defense i. Questions of fact only

2 ii. Violation not intentional iii. Violation resulted from a bona fide error iv. Collector employed reasonable procedures to prevent such violations IV. Definitions (15 U.S.C. 1692a) a. Communication the conveying of information regarding a debt directly or indirectly to any person through any medium b. Consumer any natural person obligated or allegedly obligated to pay any debt c. Creditor any person who offers or extends credit creating a debt or to whom a debt is owed, but does not include any person who receives an assignment or transfer of the debt in default d. Debt any obligation or alleged obligation of a consumer to pay money arising out of a transaction primarily for personal, family or household purposes e. Debt Collector any person who uses the instrumentalities of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due another f. Location Information a consumer s place of abode and his telephone number at such place, or his place of employment V. Acquisition of Location Information (15 U.S.C. 1692b) a. Communication with a person other than the consumer b. Purpose: To acquire location information about consumer i. Identify himself ii. State that he is confirming or correcting location information concerning the consumer 1. Identify employer only if expressly requested iii. Cannot state consumer owes debt iv. Cannot communicate more than once 1. Unless requested to do so by person 2. Collector reasonably believes that the earlier response is erroneous or incomplete and person now has correct or complete information v. Cannot use post card

3 vi. May not use language or symbol on any envelope or contents of any envelope that the debt collector is in the collection business vii. May not communicate with any other person once collector knows the consumer is represented by an attorney 1. Has attorney s name and address or can readily ascertain it VI. Communication with Consumer (15 U.S.C. 1692c) a. May not communicate at any unusual time or place or a time or place known to be inconvenient to the consumer i. Collector must assume that it is inconvenient to communicate before 8 am and after 9 pm unless otherwise notified by consumer b. May not communicate with a consumer that collector knows is represented by an attorney c. May not communicate at place of employment is collector knows that the consumer s employer prohibits consumer from receiving such communication d. May not communicate with a third party that consumer owes a debt e. May not communicate with consumer if consumer notifies in writing to cease communication or that consumer refuses to pay a debt f. For purposes of this section, consumer includes consumer s spouse, parent (if the consumer is a minor), guardian, executor or administrator VII. Harassment or Abuse (15 U.S.C. 1692d) a. A debt collector may not engage in any conduct the natural consequences of which is to harass, oppress or abuse any person in collection with the collection of a debt b. The use or threat of violence or other criminal means to harm the person, reputation or property of any person c. The use of profane or obscene language d. The publication of a list of consumer who allegedly refuse to pay debts e. The advertisement for sale of any debt to coerce payment of the debt f. Causing a telephone to ring repeatedly or continuously with intent to annoy, abuse or harass g. Placing a telephone call without meaningful disclosure of caller s identity

4 VIII. False or Misleading Representations (15 U.S.C. 1692e) a. A debt collector may not use any false, deceptive or misleading representation in connection with the collection of any debt b. The false representation that the debt collector is affiliated with the United States or any State c. The false representation of the character, amount or legal status of any debt d. The false presentation or implication that any individual is an attorney or that any communication is from an attorney e. The representation that nonpayment will result in arrest or imprisonment f. The threat to take any action that cannot legally be taken or that is not intended to be taken g. The use of any written communication which simulates that the document was authorized or approved by an official of the United States or any State h. The failure to disclose in an initial communication that the debt collector is attempting to collect a debt and that any information will be used for that purpose, and the failure to disclose in any subsequent communication the communication is from a debt collector i. The use of any business name other than the true name of the debt collector s business IX. Unfair Practices (15 U.S.C. 1692f) a. Collection of any amount (including any interest, fee, charge or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law b. Cannot accept postdated check or payment by more than five (5) days unless consumer is notified in writing of the collector s intent to deposit the check not more than ten (10) nor less than three (3) days prior to the deposit c. Threatening to deposit any postdated check prior to the date on such check d. Communicating by post card e. Identifying one s business as a collection agency on the outside of an envelope f. Placing any language or symbol on the outside of an envelope

5 X. Validation of Debts (15 U.S.C. 1692g) a. Within 5 days after the initial communication, a debt collector must send a written notice to the consumer containing i. The amount of the debt ii. The name of the creditor to whom the debt is owed iii. A statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will assumed to be valid by the debt collector iv. A statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector v. A statement that, upon the consumer s written request within the thirtyday period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor b. Collection activity must cease if consumer requests validation until validation is provided c. Communication in the thirty-day period must not overshadow consumer s right to request validation XI. Legal Action by Debt Collectors (15 U.S.C. 1692i) a. Legal action to collect a debt i. Shall be brought in the judicial district where real property is located in the case of an action to enforce an interest in real property ii. Shall be brought in the judicial district where the consumer signed the contract sued upon iii. Shall be brought in the judicial district in which such consumer resides at the commencement of the action