NEW TECHNOLOGY AND THE FAIR DEBT COLLECTION PRACTICES ACT PRESENTED BY: Raymond P. Wendolowski, Jr., Esq. 1
Fair Debt Collection Practices Act (FDCPA) 2
FDCPA FAIR DEBT COLLECTION PRACTICES ACT Passed in 1978 and amended in 1986 to include attorneys as debt collectors Defines “debt collector” as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. PA state law has its own version of the FDCPA known as the Fair Credit Extension Uniformity Act (FCEUA) 3
FDCPA FAIR DEBT COLLECTION PRACTICES ACT 15 USCS § 1692a (3) – Consumer: any natural person obligated or allegedly obligated to pay any debt. 15 USCS § 1692a(5) – Debt: any obligation or alleged obligation of a consumer to pay money arising out of a transaction 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 judgment. 4
FDCPA FAIR DEBT COLLECTION PRACTICES ACT 15 USCS § 1692a(6) – Debt collector: any person who uses any instrumentality 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 or asserted to be owed or due another. 5
FDCPA FAIR DEBT COLLECTION PRACTICES ACT See 15 USCS § 1692c : (d) “Consumer” defined. For the purpose of this section, the term “consumer” includes the consumer’s spouse, parent (if the consumer is a minor), guardian, executor or administrator. 6
IMPORTANT ELEMENTS OF FDCPA Jurisdictional Ceasing Validation Notice Mini Miranda Considerations Communications Requires that a letter be sent to the The FDCPA requires that the debt In the case of any action to If the debtor notifies the debt collector that debtor within five days of the initial collectors identify themselves as such enforce an interest in real property he refuses to pay the debt or requests that communication with the debtor stating and the nature of the communication. securing the consumer’s communications cease, then the debt that the debtor has the ability to This means that specific language be obligation, such action should be collector must cease communication with request verification of the debt, if inserted in the initial communication brought in a judicial district in the debtor. disputed, upon written request within with the consumer debtor. Debt which such real property is *Exceptions: thirty (30) days of receipt of the letter. collectors must inform the debtor in located. -debt collector may advise the consumer specific terms that “This is an attempt If the debtor responds to the letter and -in the case of an action not that further collection efforts are being to collect a debt by a debt collector. requests information or disputes the described above, the action should terminated. Any information obtained will be used debt, then the debt collector may not be brought where the debtor -debt collector may inform the consumer for that purpose.” In an effort to ensure have further contact with the debtor resides or in the jurisdiction where that the debt collector is invoking a compliance, it is recommended that the until such information is provided. the consumer signed the contract specified remedy. language be placed in any and all that is sued upon. written communications with the debtor as well as expressed verbally at the beginning of the first telephone conversation with the debtor. Written correspondence should have the “warning” in regular size print so as to not hide the language. 7
Mr. Joe Debtor January 17, 2014 123 Main Street Pittsburgh, PA 15200 CREDITOR: Bank Associates, Inc. AMOUNT: $6,174.95 Dear Mr. Debtor: We have been retained to represent Bank Associates, Inc. in a claim against you. Your immediate remittance of $6,174.95 should be made payable to BERNSTEIN-BURKLEY, P.C., Attorneys at Law, and mailed to this office by February 17, 2014. If we do not receive payment we will recommend that our client take appropriate action. Should you have any question, please feel free to communicate with me at (412) 456-8100. NOTICE THIS IS A COMMUNICATION FROM A DEBT COLLECTOR AND IS AN ATTEMPT TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. THIS LAW FIRM WILL PRESUME THIS DEBT TO BE VALID UNLESS YOU DISPUTE THE VALIDITY OF ALL OR ANY PART OF IT WITHIN 30 DAYS OF RECEIPT OF THIS LETTER. IF YOU NOTIFY US IN WRITING THAT YOU DISPUTE ALL OR A PORTION OF THIS DEBT, WE WILL OBTAIN AND SEND TO YOU VERIFICATION OF THE DEBT OR A COPY OF ANY JUDGMENT AGAINST YOU ARISING OUT OF THIS DEBT. ALSO, UPON WRITTEN REQUEST WITHIN 30 DAYS AFTER RECEIPT OF THIS NOTICE, WE WILL PROVIDE YOU WITH THE NAME AND ADDRESS OF THE ORIGINAL CREDITOR, IF DIFFERENT FROM THE CREDITOR NAMED ABOVE. WE RESERVE THE RIGHT TO TAKE LEGAL ACTION WITHIN THE 30 DAY VALIDATION PERIOD IF OUR CLIENT INSTRUCTS US TO DO SO. Very truly yours, BERNSTEIN LAW FIRM, P.C. Nicholas D. Krawec, Esquire 8
“MINI - MIRANDA WARNING” THIS DEBT COLLECTOR IS ATTEMPTING TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. Required warning per 15 U.S.C. Section 1692e (11) which provides in pertinent part: A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section: (11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action. 9
DEBTOR CONTACT TELEPHONE CONTACT AND WRITTEN CONTACT WITH DEBTOR The Fair Debt Collection Practices Act (FDCPA- 15 USC § 1692) 15 USC 1692b – Acquisition of Location Information-The FDCPA restricts methods by which debt collectors may acquire information (skip tracing) regarding a debtor. 15 USC 1692c – Communication in Connection with Debt Collection-The FDCPA limits contact with the debtor in certain circumstances, times and places as well as limiting debt collector communications with third parties. 15 USC 1692d – Harassment or Abuse – The FDCPA defines six specific acts that would be deemed harassment or abuse by any debt collector attempting to collect a debt. Collectors must be mindful that the FDCPA does not limit harassment to the six acts. Debt collectors must not take any action that could reasonably interpreted by the debtor as harassment or abuse. 10
DEBTOR CONTACT TELEPHONE CONTACT AND WRITTEN CONTACT WITH DEBTOR 15 USC 1692e – False or Misleading Representations – The FDCPA lists sixteen collection practices that are deemed to be deceptive or false representations. Such actions by a debt collector are prohibited collection practices. 15 USC 1692f – Unfair Practices – The FDCPA lists eight collection practices that are deemed to be unfair (unconscionable) collection practices. 15 USC 1692g – Validation of Debts – A technical section under the FDCPA requires that the collector respond within five days of the initial communication with the debtor by letter informing the debtor of the amount owed, the name of the creditor and a statement notifying the debtor of his/her right to request validation documents of the debt. See the demand letter attached as Appendix A. 11
THERE’S A STATE VERSION OF THE FDCPA It’s the FCEUA (Fair Credit Extension Uniformity Act) 12
TELEPHONIC COMMUNICATION 13
TELEPHONIC COMMUNICATION Telephone Consumer Protection Act (“TCPA”), 47 U.S.C.A. § 227 What is restricted? What constitutes a call? Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, (9th Cir. 2009) Section 227(b)(A)(iii) – “Catch all” Prohibition 14
TCPA-APPLICATION TO DEBT COLLECTION While certain provisions of the TCPA apply only to telephone solicitations and not debt collection calls, the prohibited use of auto- dialers has been found to apply to debt collection calls. Griffith v. Consumer Portfolio Services, Inc., 838 F. Supp. 2d 723 (2011). 15
EXPRESS CONSENT Prior Express Consent – This is an affirmative defense to a TCPA claim. Consent must be given at the time of the transaction that gave rise to the debt owed. 16
REVOCATION OF EXPRESS CONSENT Express Consent can be revoked. "[T]he weight of authority suggests that consent may be revoked under the TCPA and that if messages continue after consent is revoked, those messages violate the TCPA." Munro v. King Broadcasting Co. , 2013 WL 6185233 (W.D.Wash. 2013). 17
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