Live Blogging — The Fair Debt Collection Practices Act

Several of my colleagues in the office are gathered in the conference room, listening excitedly to a seminar on the Fair Debt Collection Practices Act (the “Act”). Since I know that so many of you are interested in the subject, I’m going to live blog it.

The presenter, J. Scott Watson, is regaling the audience by letting us know that he knew (and worked for) Mr. Lieberman (presumably not Joe), who was the defendant in the leading case which established that lawyers are “debt collectors”, under the Act.

A creditor, collecting its debts in the name of another, will be responsible for its conduct in connection with the collection of debts. In other words, an association whose representative uses a name other than the association, may be imposing the association and himself or herself to liability.

All debt collectors, including attorneys, are precluded from contacting debtors who are known to be represented by counsel. This is a non-issue to lawyers, as the Rules of Professional Conduct otherwise preclude such conduct.

The speaker suggests “reading the act in its entirety…”

A case called Foti established that a message on a voice mail, without the purpose of the call, violated the Act. On the other hand, identification of the reason for the call would be a violation, assuming a third party answered the call. The suggestion.

The speaker offers no suggestions; my suggestion — don’t leave messages on voice mail machines.

Never discuss a debt with anyone other than the debtor. If you are seeking someone’s location from a third party (which is allowed under a specific exemption), don’t disclose the reason for your inquiry. If someone contacts you purporting to be counsel for a debtor, request confirmation in writing, before proceeding.

Calling a deadbeat (er, I mean debtor) at work can be a real problem.

If a debtor requests that the debt collector cease collection activities, the debt collector must stop; the only exception will be the pursuit of judicial proceedings.

Perhaps the most troublesome aspect of the Act is the “least sophisticated debtor”; that requires that communications cannot be confusing to the least sophisticated debtor. That is, needless to say, a pretty low standard.

A new trend in litigation, according to the speaker, is suits arising from efforts to collect an amount that the debtor is not entitled to. For this reason, associations and managers must use extreme caution in referring collections to make certain that the information conveyed is accurate.

The recent Hicks case, from Florida, involved Section 1692; the debtor alleged that the voice mail messages were improper, in that they did not disclose the debtor’s identity, and the purpose of the call. The message said, “this is in regard to a personal matter….” The court certified a class action, based upon the assumption that the auto-dialer had most likely called a large number of individuals.

Campuzano involved a letter being sent, with the necessary warnings; it made an “offer” of a discount, for a quick call. The plaintiff suggested that it was deceptive in that the officer who had purportedly signed the letters had not actually been involved; the court noted that the officers of the company did not need to have personal knowledge of the letters in order to avoid liability. The court noted that the executives were not lawyers, suggesting a different standard for lawyers.

In McKinney v. Cadleway Properties, Inc., the court addressed the status of a successor who had acquired a debt; the successor will be treated as a debt collector.

Romano case involved an attempted call to Ruben Romano; he was speaking to Ruben, Sr., rather than Ruben, Jr. The discussion with the father disclosed the debt to the son. Either the speaker didn’t say, or I didn’t catch, what the court did under those facts. I’ll track it down, and supplement.

Fogel involved the collection of student loans from a law school graduate (oops!); the lawsuit was filed in the district of the primary Rutgers campus, which was in a different county than the law school, and the residence of the graduate. Again, I’ll follow up with the result.

Interesting question for the end of the seminar: If you have two debtors, should you send a letter to both? The speaker advises yes. That, of course, leads to another question; if you do so, can you bill for both?

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