The FDCPA makes lawyers personally liable for FDCPA violations for the consumer's actual damages, attorney's fees, and up to $1000 statutory damages


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A unanimous U.S. Supreme Court [1995] upheld the plain language of the Fair Debt Collection Practices Act (FDCPA) and applied its proscriptions to the litigation activities of a collection lawyer. Heintz v. Jenkins, ___ U.S. ___, 131 L. Ed. 2d 395, 63 U.S.L.W. 4266 (April 18, 1995). The staff of the Federal Trade Commission and some trade groups had argued that the Fair Debt Collection Practices Act applied to a lawyer's dunning letters and phone calls but not to legal notices sent by a lawyer or activities of a lawyer in connection with a collection suit.See National Consumer Law Center, Fair Debt Collection 4.6.2 (Boston: 2d ed. 1991 & '94 Supp.). [Note:

The FDCPA makes lawyers personally liable for FDCPA violations for the consumer's actual damages, attorney's fees, and up to $1000 statutory damages

Attorney Heintz had brought suit for a bank on the deficiency balance remaining on a car loan after the car had been repossessed and sold. That balance included a $4,173 charge allegedly for collateral insurance. The bank's claim was alleged to violate the FDCPA by including a charge for unauthorized loan default insurance rather than the authorized collateral insurance. This would be a misrepresentation of the amount of the debt violating the FDCPA, 15 U.S.C. 1692e(2)(A). Because the misrepresentation was made by the bank's lawyer, he could be held personally liable.

Lawyers Regularly Collecting Consumer Debts Are Subject To All of the FDCPA's Provisions

The Heintz decision also makes it clear that lawyers who are covered by the FDCPA are covered by all of its provisions prohibiting not only abusive but also deceptive and unfair debt collection activities. The prohibition against deception requires more than literal truthfulness in collection. It prohibits lawyers from using truthful statements which have a capacity to mislead an unsophisticated consumer. National Consumer Law Center, Fair Debt Collection 5.7.1 (Boston: 2d ed. 1991 & 1994 Supp.). The detailed requirements of the FDCPA are clearly set out in the statute for the most part, making the statutory language an excellent starting place for preparing for compliance. The more general, broad standards prohibiting abuse, deception and unfair practices require judicial gloss and some familiarity with the case law. NCLC's 987 page treatise on the FDCPA is the primary compilation of FDCPA case law in an accessible form.

Other requirements of the FDCPA apply to lawyers who regularly collect consumer debts. For example:

* Collection suits must be filed in the court in the county where the consumer resides or signed the contract or where real estate that is the subject of the suit is located. 15 U.S.C. 1692I.

* A collection suit may be threatened only when suit is authorized by the creditor, and the attorney fully intends to file suit promptly. 15 U.S.C. 1692e(10). (Unless another course of conduct is made clear in any lawyer's collection letter, a lawyer's letter implicitly threatens suit.)

* Telephone contacts to collect a consumer debt must be made between 8:00 a.m. and 9:00 p.m. 15 U.S.C. 1692c(1).

* Contacts with a consumer's employer are strictly limited to obtaining the consumer's address. 15 U.S.C. 1692b, 1692c(a)(1), 1692c(c).

FDCPA Covers Regular Collection of Consumer Debts, Excludes Creditors' Inhouse Counsel

Lawyers who regularly collect consumer debts for others must comply with all the provisions of the FDCPA. 15 U.S.C. 1692-16920. Conversely, collection of commercial or business debts are not covered by the FDCPA and are not affected by this new ruling. While there is no bright line test for when a lawyer is "regularly" collecting a consumer debts, the threshold is passed when the collector is engaged in collection activities on an occasional basis. See 131 Cong. Rec. H10534-H10536 (daily ed., Dec. 2, 1985) (remarks of Reps. Annunzio and Hiler). See also, National Consumer Law Center, Fair Debt Collection 4.2.2, 4.2.6.3 (Boston: 2d ed 1991 & 1994 Supp.).

Inhouse counsel of creditors are excluded from FDCPA coverage as long as they make clear their corporate affiliation, e.g. using corporate letterhead. 15 U.S.C. 1692a(6)(A). National Consumer Law Center, Fair Debt Collection at 4.2.3, 4.2.6.3, 4.3.1. Corporate counsel who use letterhead which creates the false impression that they are independent of their employer violate the FDCPA by doing so. 15 U.S.C. 1692e(14). See Id. 5.7.16, 5.7.5.

The Supreme Court's decision upheld the decision of the Court of Appeals for the Seventh Circuit and overruled the contrary decision Green v. Hocking, 9 F.3d 18 (6th Cir. 1993). Most courts that had considered the issue had rejected Green v. Hocking. See National Consumer Law Center, Fair Debt Collection Appdx H.1.2.1.1 (Boston: 2d ed. 1991 & '94 Supp.)

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