A unanimous U.S. Supreme Court  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
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
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
* 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'
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,
188.8.131.52 (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, 184.108.40.206, 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.220.127.116.11 (Boston: 2d ed. 1991 & '94 Supp.)
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