Fair debt collection / Robert J. Hobbs ; contributing authors, Carolyn L. Carter [and others].
2011
KF1024 .H64 2011 (Map It)
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Details
Author
Title
Fair debt collection / Robert J. Hobbs ; contributing authors, Carolyn L. Carter [and others].
Published
Boston, MA : National Consumer Law Center, [2011]
Copyright
©2011
Call Number
KF1024 .H64 2011
Edition
Seventh edition.
ISBN
9781602480841
1602480842
1602480842
Description
2 volumes (xxxv, 1,273 pages) : forms ; 28 cm.
System Control No.
(OCoLC)743856252
Note
Includes access to companion website.
Bibliography, etc. Note
Includes bibliographical references and index.
Record Appears in
Library Has
v.1-2, suppl. 2012, 2013
Added Author
Table of Contents
Volume 1
About the Companion Website, Other Search Options
ix
pt. 1
Introduction
ch. 1
Introduction and Overview
1.1.
How to Use This Treatise
1
1.1.1.
Organization of the Treatise
1
1.1.2.
Companion Website for Fair Debt Collection
1
1.1.3.
Clearinghouse Numbers
1
1.1.4.
Read NCLC REPORTS and Fair Debt Collection Cumulative Supplement for Current Developments
2
1.1.5.
Co-Counseling with NCLC
2
1.1.6.
Who Is a "Debt Collector"
2
1.2.
Fair Debt Collection Training and Continuing Legal Education
2
1.3.
Representing Consumers with Fair Debt Collection Claims
3
1.4.
How Debt Collectors Operate
3
1.4.1.
Consumer Credit in the U.S.
3
1.4.2.
Financially Distressed Consumers
4
1.4.3.
Abusive Debt Collection
4
1.5.
The Debt Collection Process and the Players
5
1.5.1.
Debt Collection Starts with Creditors
5
1.5.2.
Contingent Fee Collection Agencies
7
1.5.3.
Collection Lawyers
8
1.5.4.
Debt Buyers
9
1.5.4.1.
Debt Buying and Selling Changing the Debt Collection Landscape
9
1.5.4.2.
FTC Shuts Down Rogue Debt Buyers
10
1.5.4.3.
Debt Buyers Increase Long-Term Pressure on Consumers
10
1.5.4.4.
Many of the Debt Buyers Claims Are Not Valid
11
1.5.4.5.
Debt Buyers Usually Have Little Information About the Debt
12
1.5.5.
Flat Rate Debt Collectors
13
1.5.6.
Consumer Locating Services, a.k.a. "Skip Tracers"
14
1.5.7.
Foreclosure Law Firms
14
1.5.8.
Check Collectors and Check Diversion Companies
15
1.5.8.1.
Check Collectors
15
1.5.8.2.
Check Collection Agencies Operating in Name of District Attorney
15
1.5.9.
Child Support Collector
15
1.5.10.
Credit Card Fee Harvesters Are Big Debt Collectors
16
1.5.10.1.
Credit Card Fee Harvesters
16
1.5.10.2.
Debt Collection Abuse by Fee Harvester Formerly Known As Cross Country Bank and Its Affiliated Debt Collector
16
1.5.10.3.
CompuCredit Fined
17
1.5.11.
Shoplifting Penalty Collectors
18
1.5.12.
Charge-Offs, Debtor's Income Taxes, and IRS Cancellation of Debt Form 1099-C
18
1.5.13.
Debt Collectors and Decedents' Estates
20
1.6.
Debt Collection Related Businesses
21
1.6.1.
Credit Reporting Agencies
21
1.6.2.
Credit Counseling Firms
22
1.6.3.
Debt Settlement Scams
22
1.6.4.
Foreclosure Rescue Scams Target Financially Distressed Consumers
24
1.6.5.
Consumer Arbitration Firms
24
1.6.6.
Process Servers
24
1.7.
"Debtor's Hell," Courts Rubber-Stamping Debt Collection Suits
25
1.8.
Technological Changes
26
1.8.1.
Computerization, Automated Calling, Recording Calls, Scripts
26
1.8.2.
Caller ID, Faxes, Cell Phones, and Privacy Issues
26
1.9.
Complaints About Collection Agencies Ranked First at Federal Trade Commission
27
1.10.
Debt Collection Laws Apply Broadly
28
1.10.1.
Introduction
28
1.10.2.
Abusive Landlord Conduct
28
1.10.2.1.
Overview
28
1.10.2.2.
Deceptive Eviction Notices
28
1.10.2.3.
Self-Help Eviction
28
1.10.2.4.
Confiscation of Tenant's Personal Property
29
1.10.2.5.
Excessive Withholding from Security Deposit
29
1.10.2.6.
Demanding and Collecting Rent Not Due
29
1.10.2.7.
Use of Abusive Language or Harassment to Collect Rent
29
1.10.3.
Abusive Lending Practices
29
1.10.3.1.
Overview
29
1.10.3.2.
Coverage
30
1.10.3.3.
Collection of Illegal Charges
30
1.10.3.4.
False Threats of Criminal Prosecution
30
1.10.4.
Litigation Misconduct
31
1.10.5.
Debt Pooling
31
1.10.6.
Utility Company Disputes
31
1.11.
Guide to Surviving Debt---Treatise for Consumers
31
ch. 2
Preparation of a Debt Collection Harassment Case
2.1.
Initial Interview
33
2.1.1.
Strategy for Initial Interview
33
2.1.2.
Questions to Uncover Damages
33
2.1.3.
Examining the Validity of the Debt
35
2.1.4.
Clarifying the Client's Legal Objectives
35
2.1.5.
Careful Case Selection
37
2.1.6.
Developing a Plaintiffs' Fair Debt Collection Practice
37
2.2.
Bankrupts' Fair Debt Collection Practices Claims
37
2.3.
Stopping Debt Harassment Without Litigation or Bankruptcy
37
2.3.1.
Introduction
37
2.3.2.
Directing the Collector to Stop Dunning Contacts
37
2.3.3.
Notifying the Collector That Bank Account Is Exempt from Seizure
38
2.3.4.
Proposing a Workout Agreement
39
2.3.5.
Complaining to Consumer Protection Agencies
40
2.3.6.
Complaining About Billing Errors
41
2.3.7.
Lawyer Letter Requesting the Collector to Stop Contacts
41
2.3.8.
Evaluating Strategies for Harassed Debtors
42
2.4.
Preparation of a Suit for Damages
43
2.4.1.
Client's Recording of Phone Calls
43
2.4.2.
Client's Written Statement
45
2.4.3.
Fee-Generating Debt Collection Cases Must Be Referred to Private Lawyers by Legal Services Corporation Grantees
45
2.4.4.
Developing the Case Chronology of Events
46
2.4.5.
Importance of Collector's Documents Recording the Dates and General Messages of Contacts
46
2.4.6.
Pattern or Practice Evidence
47
2.4.7.
Pleadings
48
2.4.7.1.
Importance of State Claims
48
2.4.7.2.
Choice of Federal or State Court
49
2.4.7.3.
Specificity of Pleading
49
2.4.7.4.
Avoiding Dismissal
51
2.4.7.5.
Structuring the Case
52
2.4.7.6.
Not Sending Demand Letters
52
2.4.7.7.
Sample Complaints
52
2.4.7.8.
Proper Service
52
2.4.7.9.
Debt Collectors' Defensive Strategies
53
2.4.8.
Mandatory Arbitration of Consumers' Claims
53
2.4.8.1.
Introduction
53
2.4.8.2.
Defendant Must Produce the Arbitration Agreement
54
2.4.8.3.
Debt Buyer's Right to Enforce the Creditor's Arbitration Agreement
54
2.4.8.4.
Can a Collection Agency or Attorney Take Advantage of the Creditor's Arbitration Agreement?
54
2.4.8.5.
Does the Nature of Consumer's Claims Fall Under the Arbitration Agreement
55
2.4.8.6.
Is NAF Designated As the Sole Arbitration Forum?
56
2.4.8.7.
Other Grounds to Challenge the Arbitration Clause's Enforceability
56
2.4.8.8.
Does the Court or Arbitrator Decide the Challenge to the Arbitration Requirement?
57
2.4.8.9.
Punitive Damages in Arbitration
57
2.4.8.10.
Class Arbitration
57
2.4.9.
Discovery
58
2.4.9.1.
Initial Focus
58
2.4.9.2.
Areas of Inquiry Permitted
59
2.4.9.3.
Delayed Production of Consumer's Recordings of Abusive Calls
63
2.4.10.
Prepare for Trial at Beginning of Case
63
2.4.11.
FDCPA Claims Frequently Determined by Summary Judgment
64
2.4.12.
Jury Trials Advised
64
2.4.13.
Offers of Judgment
64
2.4.13.1.
Offers of Judgment in General
64
2.4.13.2.
Offer of Judgment in Class Action FDCPA Cases
65
2.4.13.3.
Offers of Judgment in Individual Cases
66
2.4.14.
Pitfalls Using Surveys and Experts on Deception
68
2.4.14.1.
Cost of Survey Evidence
68
2.4.14.2.
Rejection of Survey and Expert Evidence
68
2.4.14.3.
Sources for Experts
69
2.5.
Proving the Nature, Cause, and Value of Actual Damages
70
2.5.1.
Maximizing Damage Awards
70
2.5.2.
Actual Damages in Collection Abuse Cases
70
2.5.2.1.
General Principles
70
2.5.2.2.
Common Types of Injuries Resulting from Debtor Abuse
71
2.5.2.2.1.
General
71
2.5.2.2.2.
Stress-related injuries
72
2.5.2.2.3.
Out-of-pocket losses
76
2.5.2.2.4.
Injuries to personal relations
77
2.5.2.3.
Leveraging Other Relief
78
2.5.3.
Evidence Must Establish the Existence, Extent, and Cause of an Injury and the Value of the Loss
79
2.5.4.
Compensable Emotional Stress and Other Losses Vary Among States
80
2.5.5.
Causation Is an Important Element in the Proof of Damages in a Debtor Harassment Case
81
2.5.6.
Preparing for a Jury Trial of an FDCPA Case
82
2.5.7.
Establishing Deception
83
2.6.
Punitive Damages
84
2.7.
Consumer Claims Against Collector's Professional Liability Insurer
86
2.8.
Creditor's Liability for Acts of Its Employees, Collection Agency, or Attorney
86
2.9.
Keeping Time Records for Awards of Attorney Fees
89
2.10.
Injunctions, Administrative Agency Complaints, and Community Education
90
2.11.
Consumers Representing Themselves in Court
90
pt. II
The Fair Debt Collection Practices Act
ch. 3
Overview of the Fair Debt Collection Practices Act
3.1.
Scope, Purpose, and Effective Date
93
3.2.
Constitutionality of the FDCPA
94
3.3.
Sources of Law and Research Aids
95
3.3.1.
Construing the Language of the Act
95
3.3.2.
Legislative History
96
3.3.2.1.
1977 Act
96
3.3.2.2.
1986 Amendment
98
3.3.2.3.
1996 Amendments
98
3.3.2.4.
2006 Amendments
98
3.3.2.5.
2010 Amendment
99
3.3.2.6.
Consumer Financial Protection Bureau Enforcement
99
3.3.2.7.
FTC Recommends Amendments to FDCPA
99
3.3.3.
Case Developments
100
3.3.4.
Federal Trade Commission Formal Advisory Opinions
100
3.3.5.
Federal Trade Commission Informal Staff Letters
100
3.3.6.
FTC Staff Commentary on FDCPA
102
3.3.6.1.
Introduction
102
3.3.6.2.
Authority of FTC Staff to Issue Commentary
102
3.3.6.3.
Proposed FTC Enforcement Policy
103
3.3.7.
Using This Treatise for FDCPA Issues
103
ch. 4
Persons and Transactions Covered by the Fair Debt Collection Practices Act
4.1.
Introduction
105
4.2.
Debt Collectors
105
4.2.1.
The Term "Debt Collector," 15 U.S.C. [§] 1692a(6)
105
4.2.2.
Any Person Whose Principal Business Is Collecting Debts Is a "Debt Collector"
106
4.2.3.
Any Person Who Regularly Collects Debts Owed to Another Is a "Debt Collector"
107
4.2.4.
FDCPA Applies to Debt Buyers
112
4.2.5.
Creditors Using False Names Are "Debt Collectors," 15 U.S.C. [§] 1692a(6)
113
4.2.6.
Repossession, Foreclosure, and Eviction Companies, 15 U.S.C. [§] 1692a(6)
114
4.2.6.1.
General
114
4.2.6.2.
Repossession Companies Coverage, 15 U.S.C. [§] 1692a(6)
115
4.2.6.3.
Foreclosure Lawyers and Companies Covered, 15 U.S.C. [§][§] 1692a(6), 1692a(6)(F)(iii)
116
4.2.6.4.
Eviction Lawyers Covered, 15 U.S.C. [§] 1692a(6)
119
4.2.7.
Forms Providers Who Misrepresent Their Collection Involvement Violate the Act, 15 U.S.C. [§] 1692j
120
4.2.7.1.
Flat-Rate and Other Collectors Covered
120
4.2.7.2.
Extent of Participation in the Collection Process
121
4.2.7.3.
Lawyers Must Review File Before Signing Collection Letter
123
4.2.8.
Lawyers Regularly Collecting Consumer Debts Must Now Comply with All FDCPA Provisions, 15 U.S.C. [§] 1692a(6)
124
4.2.8.1.
Introduction
124
4.2.8.2.
1986 Attorney Amendment
124
4.2.8.3.
Legislative History
124
4.2.8.4.
The "Regularly Collects" Requirement
125
4.3.
Persons Specifically Excluded from the Term "Debt Collector"
128
4.3.1.
Narrow Exemptions Help Define FDCPA Coverage
128
4.3.2.
Creditors' Employees Collecting in the Name of the Creditor Are Specifically Excluded, 15 U.S.C. [§][§] 1692a(6)(A), 1692a(4)
129
4.3.3.
A Commonly Owned or Affiliated Corporate Collector Collecting Only for Its Affiliates Is Specifically Excluded If It Is Not Principally a Debt Collector, 15 U.S.C. [§] 1692a(6)(B)
131
4.3.4.
State and Federal Officials Performing Their Duties Are Specifically Excluded, 15 U.S.C. [§] 1692a(6)(C)
132
4.3.5.
Process Servers Are Specifically Excluded, 15 U.S.C. [§] 1692a(6)(D)
134
4.3.6.
Bona Fide Nonprofit Consumer Credit Counselors Are Specifically Excluded, 15 U.S.C. [§] 1692a(6)(E)
134
4.3.7.
Attorneys Specifically Excluded Before 1986 Now Covered
135
4.3.8.
Persons Collecting Debts as Part of Bona Fide Fiduciary or Escrow Arrangements Are Specifically Excluded, 15 U.S.C. [§] 1692a(6)(F)(i)
135
4.3.9.
An Original Extender of Credit Collecting on Behalf of Another Excluded, 15 U.S.C. [§] 1692a(6)(F)(ii)
137
4.3.10.
Persons Collecting Debts Not in Default When Obtained Are Specifically Excluded, 15 U.S.C. [§] 1692a(6)(F)(iii)
137
4.3.11.
Enforcer of a Security Interest in an Account Used as Collateral for a Commercial Loan Exempt, 15 U.S.C. [§] 1692a(6)(F)(iv)
140
4.3.12.
Check Collection Companies Disguised As District Attorneys, 15 U.S.C. [§] 1692p
141
4.4.
Transactions Covered by the Act
142
4.4.1.
The Act Covers Only Debts Allegedly Owed by a Consumer, 15 U.S.C. [§] 1692a(3)
142
4.4.2.
Debts Covered by the FDCPA
142
4.4.2.1.
Consumer, Not Commercial, Debts Covered, 15 U.S.C. [§] 1692a(5)
142
4.4.2.2.
A Broad Range of Consumer Debts Are Covered
144
4.4.2.3.
Coverage of Noncontractual Obligations Questioned
148
4.5.
FDCPA Protects Consumers and Persons
150
4.6.
Collection Activities Broadly Covered
153
4.6.1.
Indirect, Attempted, and Mistaken Collections Covered
153
4.6.2.
Attempts to Collect Debt Covered
154
4.6.3.
Mistaken and "Alleged" Debts Covered
154
4.6.4.
"Communications" Covered by the FDCPA
156
4.6.5.
Responses to Consumers Covered
160
4.6.6.
Coverage of Communications to Consumer's Attorney
161
4.6.7.
Activities "in Connection with" "Collecting a Debt"
164
4.6.8.
Litigation Activities Covered
167
ch. 5
Consumer Protections and Rights Under the Fair Debt Collection Practices Act, 15 U.S.C. [§][§] 1692b to 1692j
5.1.
Overview; Encouraging the Exercise of FDCPA Rights
169
5.2.
General Principles of Construction of the Act
169
5.2.1.
Act Protects Least Sophisticated Consumers
169
5.2.2.
Waiver of FDCPA Protections Disfavored
171
5.2.3.
Strict Liability Under the FDCPA
171
5.2.4.
Effect to Be Given to the Plain Meaning of the Act
173
5.2.5.
Debtors Deserve Reasonable and Civil Treatment
173
5.2.6.
Issues Unique to Attorney Debt Collectors
173
5.2.6.1.
FDCPA Applies to Collection Attorneys
173
5.2.6.2.
Venue Provision
174
5.2.6.3.
Communications with Third Parties
174
5.2.6.4.
FDCPA Notices in Connection with Litigation
174
5.2.6.5.
Other Pitfalls to Avoid
174
5.2.7.
Lawyers' Ethical Obligations Intertwine with FDCPA
175
5.2.7.1.
Collection Lawyers May Not Engage in "Unfair" or Unethical Practices
175
5.2.7.2.
Ethical Rules Require Lawyers to Avoid False Threat of Suit
175
5.2.7.3.
Ethics Rules Require Interstate Collection Letters Avoid Misrepresenting Lawyer's Authority to Sue
176
5.2.7.4.
Ethics Rules Prohibit Deceptively Representing Only Part of the Effects of Suit
176
5.2.7.5.
Ethics Rules Restrict Intermingling Activities of Collection Agency and Attorney
177
5.2.7.6.
Ethical Responsibilities with Self-Represented Defendants
178
5.3.
FDCPA Limits a Collector's Communications with a Consumer
178
5.3.1.
Consumers' Privacy and Relationships Protected
178
5.3.2.
Contacts at Unusual or Inconvenient Times or Places Prohibited
179
5.3.2.1.
Text of 15 U.S.C. [§] 1692c(a)(1)
179
5.3.2.2.
Communications Broadly Covered
179
5.3.2.3.
Contacts at Inconvenient Times
179
5.3.2.4.
Contacts at Inconvenient Places
180
5.3.2.5.
Collector Should Inquire About Convenience of a Contact
180
5.3.2.6.
Other FDCPA Provisions Regulate Phone Calls
180
5.3.2.7.
Calling Cell Phones at Inconvenient Times or Places
181
5.3.3.
Collector May Not Contact a Consumer It Knows to Be Represented by an Attorney
181
5.3.4.
Contacts at Workplace Are Restricted
184
5.3.5.
Informing Most Other People of the Consumer's Indebtedness Is Prohibited
186
5.3.5.1.
Text of 15 U.S.C. [§] 1692c(b)
186
5.3.5.2.
Contacting Friends, Neighbors, Relatives, Employer Is Usually Prohibited
186
5.3.5.3.
Collector May Contact Certain Nondebtors
187
5.3.5.4.
Collector May Contact Others in Specific Situations
188
5.3.5.5.
Payments from Third Parties, Interpreters, Eavesdropping
189
5.3.5.6.
Leaving Messages for Consumers
189
5.3.5.7.
Inconsistent FTC Staff Interpretations on the Term "Communications"
192
5.3.5.8.
Relation to Other Provisions
193
5.3.6.
Obtaining Location Information About a Consumer from Other Persons Is Strictly Regulated
194
5.3.7.
Consumers May Modify, by Direct Prior Consent, Protections from Collection Contacts
197
5.3.8.
Right to Stop Collection Contacts
198
5.3.8.1.
Text of 15 U.S.C. [§] 1692c(c)
198
5.3.8.2.
Analysis
198
5.3.8.3.
Referring a Debt to Another Collector After Consumer's Request to Cease Collection
201
5.3.8.4.
Giving Notice of a State Right to Terminate Collection Contacts
201
5.4.
Conduct Serving to Harass, Oppress, or Abuse
202
5.4.1.
Harassing, Oppressive, and Abusive Conduct Generally Prohibited
202
5.4.2.
Collectors May Not Use or Threaten Violence or Criminal Conduct
207
5.4.3.
Collectors May Not Use Obscene, Profane, or Abusive Language
208
5.4.4.
Publishing a List of Allegedly Defaulting Debtors
209
5.4.4.1.
Text of 15 U.S.C. [§] 1692d(3)
209
5.4.4.2.
Shame Lists Prohibited
209
5.4.4.3.
Coded Lists of Debtors Must Conceal Identity
210
5.4.5.
Advertising a Debt for Sale to Coerce Payment
210
5.4.6.
Repeated or Continuous Telephone Calls Intended to Annoy, Abuse, or Harass Are Prohibited
211
5.4.7.
Collector's Employee Must Provide Meaningful Disclosure of Identity When Telephoning
213
5.4.7.1.
Text of 15 U.S.C. [§] 1692d(6)
213
5.4.7.2.
General
213
5.4.7.3.
Use of Aliases
214
5.5.
False, Deceptive, or Misleading Representations and Collection Methods Are Prohibited
215
5.5.1.
General
215
5.5.2.
Collectors May Not Use False, Deceptive, or Misleading Representations or Collection Means
215
5.5.2.1.
Selected Text of 15 U.S.C. [§] 1692e
215
5.5.2.2.
Courts Encouraged to Construe 15 U.S.C. [§] 1692e to Address New Forms of Deception
216
5.5.2.3.
FDCPA Deception Standard Builds on FTC Act
216
5.5.2.4.
Deception of the Consumer Plaintiff Not Required
218
5.5.2.5.
Least Sophisticated Consumer Standard Altered by Consumer's Legal Representation in Some Circuits
218
5.5.2.6.
Deceptive Implications of Statements
220
5.5.2.6.1.
Literal truth, half-truths, and deception
220
5.5.2.6.2.
Courts' difficulty with deceptive half-truths
221
5.5.2.7.
Courts Split on Whether Deception Is a Matter of Law, Fact, or Mixed
222
5.5.2.8.
Materiality Element of Deception Claims
223
5.5.2.9.
Expert Witnesses on Deception
225
5.5.2.10.
Base Claims on More Specific Provisions of Act When Possible
226
5.5.2.11.
Threat of Suit May Be Deceptive
227
5.5.2.11.1.
Misrepresenting imminence of suit, or intent or authority to sue
227
5.5.2.11.2.
Lack of intent to sue
228
5.5.2.11.2.1.
Establishing lack of intent to sue
228
5.5.2.11.2.2.
Using online databases to establish false suit threats
230
5.5.2.11.3.
Disguised threats of suit
230
5.5.2.12.
Other Deceptive Threats
232
5.5.2.13.
Other Deceptive Statements
235
5.5.2.13.1.
Overview
235
5.5.2.13.2.
Deceptive settlement offers
239
5.5.2.13.3.
Suits and statements involving time-barred debts
240
5.5.2.13.3.1.
Filing or threatening a time-barred suit is deceptive
240
5.5.2.13.3.2.
Which statute of limitations applies to debt collector's suit
240
5.5.2.13.3.3.
Requesting payment on time-barred debts without threatening suit may not be deceptive
242
5.5.2.13.4.
Deceptive Practices in State Debt Collection Suits Against Consumers
243
5.5.2.14.
Legislative History of 15 U.S.C. 1692e
248
5.5.3.
Collectors May Not Falsely Imply an Affiliation with the Government, 15 U.S.C. [§] 1692e(1)
248
5.5.4.
Collectors May Not Falsely Represent the Character, Amount, or Legal Status of a Debt
249
5.5.4.1.
Text of 15 U.S.C. [§] 1692e(2)(A)
249
5.5.4.2.
Character
249
5.5.4.3.
Amount
250
5.5.4.4.
Legal Status
257
5.5.5.
Collectors May Not Falsely Represent the Services They Have Rendered or the Compensation to Which They Are Entitled
259
5.5.6.
Falsely Implying That a Person Is an Attorney or That a Communication Comes from an Attorney Is Prohibited
259
5.5.6.1.
Overview, 15 U.S.C. [§] 1692e(3)
259
5.5.6.2.
Collection Lawyers Must Meaningfully Review Debts Before Demanding Payment
261
5.5.6.3.
Circuits May Allow Lawyer to Disclaim Involvement and Dun Before Reviewing the Claim
263
5.5.6.4.
Mass Filing of Lawsuits
264
5.5.7.
Implying That Nonpayment Will Result in Arrest, Garnishment, Seizure, or Sale If Such Action Is Unlawful or Unintended, 15 U.S.C. [§] 1692e(4)
267
5.5.8.
Threatening Unlawful or Unintended Action
268
5.5.8.1.
Text of 15 U.S.C. [§] 1692e(5)
268
5.5.8.2.
Least Sophisticated Consumer Standard
268
5.5.8.3.
False Threats of Legal Action
268
5.5.8.4.
Other False Threats
270
5.5.8.5.
Unlicensed Debt Collection
271
5.5.8.6.
Threats of Illegal Action
273
5.5.8.7.
Relation to Other Protections
276
5.5.9.
Falsely Implying That Transfer of a Debt Will Preclude a Consumer's Claim or Defense or Will Subject the Consumer to a Practice Prohibited by the Act
276
5.5.10.
Misrepresenting That the Consumer Committed a Crime or Engaged in Other Misconduct in Order to Disgrace the Consumer
277
5.5.11.
Communicating or Threatening to Communicate False Information Prohibited, 15 U.S.C. [§] 1692e(8)
278
5.5.12.
Using or Distributing Written Material Giving a False Impression of Its Source, Authorization, or Approval, 15 U.S.C. [§] 1692e(9)
282
5.5.13.
False Representations or Deceptive Means to Collect or Attempt to Collect a Debt or to Obtain Information About a Consumer, 15 U.S.C. [§] 1692e(10)
283
5.5.14.
Debt Collection Notice, 15 U.S.C. [§] 1692e(11)
287
5.5.14.1.
Overview
287
5.5.14.2.
Information Required by This Provision Must Be Effectively Provided
292
5.5.15.
Falsely Implying That Accounts Have Been Transferred to Innocent Purchasers for Value, 15 U.S.C. [§] 1692e(12)
294
5.5.16.
Falsely Implying That Documents Are Legal Process
294
5.5.17.
Using Any Business Name Other Than the True Name of the Collector's Business, 15 U.S.C. [§] 1692e(14)
295
5.5.18.
Misrepresenting That Legal Process Form Does Not Require Consumer's Action
297
5.5.19.
Falsely Implying That a Collector Is a Credit Reporting Agency
298
5.6.
Use of Unfair or Unconscionable Collection Means
299
5.6.1.
General Prohibition; Construing "Unfair" and "Unconscionable," 15 U.S.C. [§] 1692f
299
5.6.2.
Particular Unfair or Unconscionable Methods Prohibited
303
5.6.3.
Collecting an Amount Not Permitted by Law or Contract, 15 U.S.C. [§] 1692f(1)
307
5.6.4.
Restrictions on Soliciting, Accepting, and Depositing Postdated Checks, 15 U.S.C. [§] 1692f(2)
312
5.6.5.
Causing Expenses to a Person by Concealing the Collection Purpose of a Communication
314
5.6.6.
Repossession Regulated, 15 U.S.C. [§] 1692f(6)
315
5.6.7.
Sending Consumer a Postcard Prohibited, 15 U.S.C. [§] 1692f(7)
316
5.6.8.
Language and Symbols on Envelopes Restricted, 15 U.S.C. [§] 1692f(8)
317
5.7.
Verification of a Debt, 15 U.S.C. [§] 1692g
318
5.7.1.
Congress Considered Debt Verification "Significant"
318
5.7.2.
The Verification Rights Notice
318
5.7.2.1.
Text of 15 U.S.C. [§] 1692g(a)
318
5.7.2.2.
Overview
319
5.7.2.3.
Effectively Conveying the Notice
319
5.7.2.4.
Oral Verification Notices
321
5.7.2.5.
Providing Verification Rights Notices to Consumers
322
5.7.2.5.1.
Providing the notice before formal pleadings
322
5.7.2.5.2.
Providing the notice after initiating debt collection with formal pleadings
324
5.7.2.5.3.
Exception for certain legal notices
326
5.7.2.6.
Content of Verification Notice
326
5.7.2.6.1.
Statutory requirements
326
5.7.2.6.2.
Courts' recommended additions to verification notice
329
5.7.2.6.3.
Notice that oral disputes overcome collector's assumption of validity of debt, 15 U.S.C. [§] 1692g(a)(3)
331
5.7.2.6.4.
Disclosing the amount of the debt
332
5.7.2.6.5.
Confusing statement of the amount of the debt
334
5.7.2.7.
Collection Activities May Not Obscure, Confuse, or Contradict Verification Rights
334
5.7.2.7.1.
Some debt collection activities permitted during thirty-day verification right period, 15 U.S.C. [§] 1692g(b)
334
5.7.2.7.2.
Demands for immediate payment
336
5.7.2.7.3.
Suit or threat of suit
338
5.7.2.7.4.
Threats to credit report
340
5.7.2.7.5.
Telling consumer to telephone the debt collector
340
5.7.2.7.6.
Other debt collection activities during the period to request verification
341
5.7.2.7.7.
Question of law or fact and proof
342
5.7.2.7.8.
Legal standards
342
5.7.2.7.8.1.
Effective communication of the debt verification rights
342
5.7.2.7.8.2.
Obscuring or overshadowing the debt verification notice
342
5.7.2.7.8.3.
Contradiction of or inconsistency with debt verification rights
342
5.7.2.7.8.4.
Deception and confusion
343
5.7.3.
Verification of a Debt
344
5.7.3.1.
Text of 15 U.S.C. [§] 1692g(b)
344
5.7.3.2.
Consumers Should Request Verification in Writing
344
5.7.3.3.
A Debt Collector Verifies a Debt by Providing Information That Is Responsive to the Consumer's Request, 15 U.S.C. [§] 1692g(b)
345
5.7.3.4.
Debt Collector Must Cease Collection Until Debt Verified, 15 U.S.C. [§] 1692g(b)
350
5.7.4.
Failure by a Consumer to Exercise Verification Rights May Not Be Taken As an Admission of Liability, 15 U.S.C. [§] 1692g(c)
353
5.8.
Consumer May Direct Application of Payments When a Collector Holds Multiple Accounts
353
5.9.
Restrictions Against Bringing Suits in Inconvenient Forums
354
5.9.1.
Text of 15 U.S.C. [§] 1692i
354
5.9.2.
Suit Must Be Filed Where Consumer Resides or Signed Contract or Where Property Located
354
5.9.3.
Legislative History
356
5.10.
Supplying Forms That Misrepresent the Involvement of Another in the Collection Process
356
ch. 6
Fair Debt Collection Practices Act Litigation and Remedies
6.1.
Private Remedy Is Primary Enforcement Mechanism
357
6.2.
Evaluating Cases
357
6.2.1.
General
357
6.2.2.
Considerations Concerning Remedies
358
6.2.2.1.
Increasing FDCPA Individual Awards
358
6.2.2.2.
Class Actions Seeking FDCPA Damages
358
6.2.2.3.
Bringing a Class Action Seeking Declaratory or Injunctive Relief
358
6.2.3.
A Wide Range of Parties May Bring FDCPA Actions
359
6.2.4.
A Wide Range of Defendants May Be Named Under the FDCPA
359
6.2.4.1.
Employees and Officers
359
6.2.4.2.
Owners, Partners, Franchisors, and Parent Companies
360
6.2.4.3.
Collection Attorneys and Their Clients
360
6.2.4.4.
Forms Suppliers, Repossessors, and Insurers
361
6.2.4.5.
Joining Parties Otherwise Exempt from FDCPA Liability
361
6.2.5.
Trial by Jury
361
6.3.
Actual Damages, 15 U.S.C. [§] 1692k(a)(1)
362
6.3.1.
General
362
6.3.2.
Emotional Distress Damages
362
6.3.3.
Proof of Actual Damages
363
6.3.4.
Standards of Causation
364
6.3.5.
Relation Between FDCPA Actual Damages and Other Awards
364
6.4.
Statutory Damages in Individual Actions, 15 U.S.C. [§] 1692k(a)(2)(A)
365
6.4.1.
Introduction
365
6.4.2.
Are Statutory Damages Mandatory?
365
6.4.3.
Factors for Determining Amount of Statutory Damages Award
366
6.4.3.1.
General
366
6.4.3.2.
Actual Damages Not a Prerequisite
367
6.4.3.3.
Enhancing Statutory Damages
367
6.4.3.4.
Factors Reducing Statutory Damages Awards
369
6.4.4.
Relation Between FDCPA Statutory Damages and Other Awards
370
6.4.5.
Multiple Statutory Damages Awards
370
6.4.5.1.
Where There Are Multiple Plaintiffs
370
6.4.5.2.
Where There Are Multiple Defendants
370
6.4.5.3.
Where There Are Multiple FDCPA Violations
370
6.5.
Punitive Damages
371
6.5.1.
Punitive Damages May Be Unavailable Under FDCPA
371
6.5.2.
Punitive Damages in Supplemental State Claims
372
6.6.
FDCPA Class Actions
373
6.6.1.
Practical Considerations
373
6.6.2.
Rule 23 Requirements for Class Certification
374
6.6.2.1.
Introduction
374
6.6.2.2.
Numerosity
374
6.6.2.3.
Commonality
375
6.6.2.4.
Typicality
376
6.6.2.5.
Adequacy of Representation
377
6.6.2.6.
Choice Between Certifying Under Rule 23(b)(2) or 23(b)(3)
378
6.6.2.7.
Rule 23(b)(3)---Predominance, Superiority and Manageability
379
6.6.2.7.1.
General
379
6.6.2.7.2.
Special considerations where class action seeks actual damages
380
6.6.3.
FDCPA Class Actions for Statutory Damages
381
6.6.3.1.
General
381
6.6.3.2.
Computing One Percent of Net Worth
382
6.6.3.3.
Increasing Each Class Member's Recovery of Statutory Damages
383
6.6.3.4.
Factors Affecting Amount of Class Statutory Damages Award
384
6.6.4.
Defense Tactics
384
6.6.5.
Settlements
385
6.7.
Declaratory or Injunctive Relief
386
6.7.1.
Declaratory Relief
386
6.7.2.
Injunctive Relief
386
6.7.3.
Injunctive Relief Under Supplementary State Law Claims
387
6.8.
Attorney Fees for Prevailing Consumers
387
6.8.1.
General
387
6.8.2.
Is a Fee Award Mandatory?
388
6.8.3.
Attorney Fees Where Claim Is Settled
389
6.8.3.1.
Right to Attorney Fees
389
6.8.3.2.
Negotiating a Settlement Containing Attorney Fees
392
6.8.4.
The Written Fee Agreement
394
6.8.5.
Common Fund Attorney Fee Awards in Class Actions
395
6.8.6.
The Lodestar Approach to Calculating Attorney Fees
395
6.8.6.1.
General
395
6.8.6.2.
Determining the Allowable Hours
396
6.8.6.2.1.
General standards
396
6.8.6.2.2.
Examples of allowable hours
397
6.8.6.2.3.
Computing allowable hours where consumer does not prevail on all claims
398
6.8.6.2.4.
Fees for work on fee petition, appeal, or related proceedings
399
6.8.6.3.
Establishing the Hourly Rate
400
6.8.6.4.
Downward Adjustments to the Lodestar
402
6.8.6.5.
Upward Adjustments to the Lodestar
402
6.8.7.
Costs
403
6.8.8.
Fee Applications
404
6.8.8.1.
Requirements
404
6.8.8.2.
Preparation of the Fee Application
404
6.8.9.
Appealing Attorney Fee Awards
406
6.9.
Proof of Debt Collector's Intent Not Required
406
6.10.
Statute of Limitations
407
6.10.1.
Introduction
407
6.10.2.
The Discovery Rule
407
6.10.3.
When There Is a Series of Violations
408
6.10.4.
When Does the Limitations Period Start Running?
409
6.10.5.
Tolling the Limitations Period
410
6.10.6.
Counting the One-Year Period
411
6.10.7.
When Is the FDCPA Complaint Deemed Filed?
411
6.10.8.
Recoupment
411
6.11.
Jurisdiction and Venue
412
6.11.1.
State and Federal Courts Have Concurrent Jurisdiction
412
6.11.2.
Personal Jurisdiction over Out-of-State Collectors
413
6.11.2.1.
Overview
413
6.11.2.2.
"Transaction of Business" Test in Long-Arm Statutes
413
6.11.2.3.
Tort Tests in Long-Arm Statutes
414
6.11.3.
Federal Court Venue
415
6.11.4.
Joining State Law Claims in Federal Court
416
6.11.5.
Federal Court Joinder of Creditors Subject to State Claims
417
6.12.
Relation of the FDCPA to State Laws and Other Federal Statutes
418
6.12.1.
Relationship to State Law
418
6.12.2.
Maine Granted FDCPA Exemption
419
6.12.3.
Relationship to Other Federal Statutes
420
6.13.
Federal Agency Enforcement
420
6.13.1.
Rulemaking and Agency Interpretations
420
6.13.2.
FTC Enforcement
420
6.13.3.
Consumer Financial Protection Bureau Enforcement
421
6.13.4.
Other Agency Enforcement
422
ch. 7
Debt Collector's Defenses and Counterclaims
7.1.
General
423
7.2.
Bona Fide Error Defense, 15 U.S.C. [§] 1692k(c)
423
7.2.1.
Overview
423
7.2.2.
Mistaken Interpretation of FDCPA Not an Error
424
7.2.3.
Errors of State Law or Other Federal Law
425
7.2.4.
Factual Errors and Clerical Mistakes
426
7.2.5.
Bona Fide Error
427
7.2.6.
Whether the Error Was Unintentional
429
7.2.7.
Whether the Collector Maintained Reasonable Procedures
431
7.3.
Good Faith Conformity with a Formal FTC Advisory Opinion Later Ruled Invalid Is a Defense to an FDCPA Suit, 15 U.S.C. [§] 1692k(e)
436
7.4.
Prior Litigation May Bar an FDCPA Action
437
7.4.1.
Overview
437
7.4.2.
Res Judicata and Collateral Estoppel
437
7.4.3.
Comity
439
7.4.4.
Rooker-Feldman Doctrine
439
7.4.5.
Sovereign Immunity of Government Officials
442
7.4.6.
Litigation and Witness Immunity
442
7.5.
Other Defenses
444
7.6.
Federal Courts Usually Refuse Supplemental Jurisdiction over a Debt Collector's Counterclaim to Collect the Underlying Debt
447
7.7.
Attorney Fees and Sanctions Against the Consumer or Consumers' Attorney
447
7.7.1.
Attorney Fees and Costs Awards to FDCPA Defendants, 15 U.S.C. [§] 1692k(a)(3)
447
7.7.2.
Rule 11 Sanctions
450
7.7.3.
Sanctions for Multiplying Proceedings
451
pt. III
Other Federal and State Debt Collection Claims
ch. 8
Other Federal Claims
8.1.
Fraudulent or Defamatory Use of Mails
453
8.2.
Collecting for Unordered Merchandise May Be Illegal
454
8.3.
Telephone and E-Mail Harassment
455
8.3.1.
Criminal Statutes
455
8.3.2.
Protections Under the Telephone Consumer Protection Act
455
8.3.2.1.
Potential Applications to Debt Collection
455
8.3.2.2.
Exceptions to the Restrictions on Autodialed and Prerecorded/ Artificial Voice Calls
456
8.3.2.2.1.
Exceptions to restrictions on calls to cell phones
456
8.3.2.2.2.
Exceptions to restrictions on artificial voice calls to residential lines
457
8.3.2.2.3.
Calls to non-debtors; withdrawal of consent
457
8.3.2.2.4.
Burden of proof regarding exceptions
457
8.3.3.
Use of Caller ID As a Debt Collection Device
458
8.3.3.1.
Introduction
458
8.3.3.2.
Transmitting Inaccurate Caller ID Information
458
8.3.3.3.
Meaningful Disclosure Under FDCPA Applies to Caller ID
458
8.3.3.4.
Automatic Number Identification (ANI) and Blocking Transmittal of Caller ID
458
8.3.4.
Protection from Electronic Messaging Harassment
459
8.3.5.
Enforcement of Telephone Company Tariffs by FCC and State Public Utility Commissions
460
8.3.5.1.
Introduction
460
8.3.5.2.
Is the Telephone Service Governed by a Tariff Rule or State Regulation?
460
8.3.5.3.
Enforcement of Tariff Requirements
461
8.3.5.4.
Claims Under Federal Communications Act
462
8.3.5.5.
If No Tariff Protection or Regulation Applies to the Telephone Service
462
8.3.6.
Telephone Harassment of a Consumer Who Is Not the Intended Recipient of the Call or Who Is Not the Debtor
463
8.4.
Truth in Lending Disclosures
463
8.4.1.
Are TIL Disclosures Required When Collector Enters into a Repayment Agreement with the Debtor?
463
8.4.2.
Collector's Liability for Originator's TIL Violation
464
8.5.
Extortionate Collection Methods and Other RICO Violations
465
8.5.1.
Advantages and Disadvantages of RICO Claims
465
8.5.2.
Qualifying Conduct---Collection of an Unlawful Debt or Pattern of Racketeering Activity
465
8.5.3.
RICO's Substantive Prohibitions
466
8.5.4.
RICO and Debt Collection
467
8.5.5.
State Racketeering Statutes
467
8.6.
The Fair Credit Reporting Act
467
8.6.1.
Overview
467
8.6.2.
Creditors' and Collectors' Roles in Ensuring the Accuracy of Credit Reports
468
8.6.2.1.
Liability of Furnishers Under the FCRA
468
8.6.2.2.
Common Types of Inaccuracy by Debt Collectors
468
8.6.3.
Creditors' and Collectors' Liability for Making Inaccurate Reports to Credit Bureau
469
8.6.3.1.
Notice of the Dispute
469
8.6.3.2.
Furnisher's Duty to Conduct a Reasonable Investigation
470
8.6.3.3.
Reinvestigation Time Limits
470
8.6.3.4.
Prohibition Against Re-Reporting Inaccurate Information
471
8.6.4.
Improperly Acquiring Credit Reports
471
8.6.5.
Special Duties Where Debt Arises from Fraud or Identity Theft
471
8.6.6.
Creditors and Collectors As Consumer Reporting Agencies
472
8.6.7.
FDCPA and Other Prohibitions Relating to Credit Reports
472
8.6.7.1.
Publicizing Indebtedness; Deceptive Use of "Credit Bureau" in Name
472
8.6.7.2.
Disputed Debts and the Verification Process
473
8.6.7.3.
Threatening to Report Debt
473
8.7.
UCC Article 3 and the Electronic Fund Transfers Act
473
8.7.1.
Introduction
473
8.7.2.
Preauthorized Drafts and UCC Article 3
473
8.7.3.
Electronic Fund Transfers and the EFTA
475
8.7.4.
Collecting Fees Electronically for Returned Items Under the EFTA
476
8.7.5.
Electronic Fund Transfers and NACHA Rules
477
8.7.6.
Other Remedies for Unauthorized Withdrawals
478
8.8.
Discrimination in Choice of Collection Tactics on the Basis of Consumer's Race, Religion, Sex, Age, or Other Prohibited Category
478
8.9.
Federal Credit Repair Organizations Act
480
8.9.1.
Overview
480
8.9.2.
Coverage of Creditors and Collectors
480
8.9.3.
Substantive Restrictions on Credit Repair Organizations
481
8.9.4.
Substantive Prohibitions Applicable to Any "Person"
482
8.9.5.
Private Remedies
482
8.10.
Collection of Taxes by Private Debt Collection Agencies
483
8.11.
Bankruptcy
484
8.11.1.
General
484
8.11.2.
Bankruptcy Basics
484
8.11.2.1.
Chapter 7 Overview
484
8.11.2.2.
Chapter 13 Overview
485
8.11.2.3.
Choosing to File and Choosing a Chapter
486
8.11.2.4.
The Automatic Stay
486
8.11.2.5.
Property of the Estate and Exemptions
490
8.11.2.6.
Discharge
491
8.11.3.
Bankruptcy Impact on Consumers' Claims
493
8.11.3.1.
General
493
8.11.3.2.
Claims Arising Before Bankruptcy
493
8.11.3.3.
Claims Arising During a Bankruptcy Case
495
8.11.3.4.
Claims Arising After a Bankruptcy Case
496
8.11.3.5.
Litigating Claims in Bankruptcy
496
8.11.3.6.
FDCPA Attorney Fees and Bankruptcy
496
8.11.4.
Federal and State Fair Debt Collection Claims That Arise Out of Bankruptcy
497
8.11.4.1.
Introduction
497
8.11.4.2.
FDCPA Claims Arising Out of or in Conjunction with the Bankruptcy Code
498
8.11.4.3.
FDCPA and Proof of Claim Problems
500
8.11.4.3.1.
Overview of the bankruptcy claims process
500
8.11.4.3.2.
FDCPA liability for creditors' abuse of the claims process
500
8.11.4.4.
Preemption of State Debt Collection Laws
501
8.12.
Constitutional Torts
502
8.12.1.
Introduction
502
8.12.2.
State Action
502
8.12.2.1.
General; State As Creditor
502
8.12.2.2.
Private Parties
503
8.12.3.
What Protections Due Process Requires
505
8.12.4.
Fourth Amendment Claims
507
8.12.5.
Immunity
508
8.13.
Other Federal Restrictions on Debt Collection
510
ch. 9
Tort Remedies
9.1.
Introduction
511
9.1.1.
Overview
511
9.1.2.
Preemption
512
9.1.2.1.
FDCPA Does Not Preempt Tort Claims
512
9.1.2.2.
Preemption by Bankruptcy Code or Other Federal Statutes
512
9.1.3.
Privilege
513
9.1.3.1.
Privilege for Statements Made in Judicial Proceedings
513
9.1.3.2.
Common Interest Privilege
517
9.1.3.3.
Anti-SLAPP Statutes
518
9.1.4.
Immunity Under the Fair Credit Reporting Act
519
9.1.5.
Identity Theft
519
9.2.
Intentional or Negligent Infliction of Emotional Distress
520
9.2.1.
Elements of Intentional Infliction of Emotional Distress
520
9.2.2.
What Constitutes Severe Mental Distress
521
9.2.3.
Whether Physical Injury or Other Non-Emotional Injury Is Required
522
9.2.4.
What Constitutes Actionable Conduct
523
9.2.5.
Negligent Infliction of Emotional Distress
531
9.2.6.
Recovery of Emotional Distress Damages for Other Collection Torts
534
9.3.
Invasion of Privacy
535
9.3.1.
Overview
535
9.3.2.
Intrusion upon the Debtor's Right to Seclusion
537
9.3.3.
Holding Up to False Light
540
9.3.4.
Public Disclosure of Private Facts
542
9.4.
Intentional Interference with Contractual Relationships or Prospective Economic Relations
544
9.4.1.
Introduction
544
9.4.2.
Tortious Interference with a Contract
546
9.4.3.
Tortious Interference with Prospective Economic Relations
547
9.4.4.
Justification As a Defense
548
9.5.
Defamation
549
9.6.
Malicious Prosecution and Abuse of Process
555
9.6.1.
Introduction
555
9.6.2.
Malicious Prosecution
556
9.6.2.1.
Summary of Elements
556
9.6.2.2.
Institution of a Proceeding
557
9.6.2.3.
Lack of Probable Cause
558
9.6.2.4.
Malice or Improper Purpose
560
9.6.2.5.
Termination in Favor
562
9.6.2.6.
Examples
564
9.6.3.
Abuse of Process
565
9.6.3.1.
Elements
565
9.6.3.2.
"Process" Defined
567
9.6.3.3.
Ulterior Purpose
568
9.6.3.4.
Examples
570
9.7.
Other Debt Collection Torts
572
9.8.
Attorney's Liability to Third Parties for Collection Negligence
577
9.9.
Liability of Principals, Officers
578
ch. 10
Other State Remedies
10.1.
Introduction
581
10.1.1.
Benefits of State Statutory Claims
581
10.1.2.
Preemption Issues
581
10.1.3.
Privilege Issues
582
10.1.4.
Special Issues in Utility Collection Cases
583
10.2.
Consumer Protections Under State Debt Collection Statutes and Regulations
583
10.2.1.
Overview
583
10.2.2.
Constitutionality of State Debt Collection Statutes
584
10.2.3.
State Debt Collection Statutes' Coverage
585
10.2.3.1.
Types of Debts Covered
585
10.2.3.2.
Types of Activities Covered
587
10.2.3.3.
Types of Collectors Covered
587
10.2.3.3.1.
Creditors collecting their own debts
587
10.2.3.3.2.
Entities not in the business of debt collection
590
10.2.3.3.3.
Coverage of specific entities
590
10.2.3.3.4.
Coverage of servicing, billing, and mortgage foreclosure
592
10.2.3.4.
Coverage of Types of Debtors
594
10.2.4.
State Debt Collection Statutes' Protections
594
10.2.4.1.
General Standards
594
10.2.4.2.
Privacy
596
10.2.4.3.
Abusive Collection Activities
597
10.2.4.4.
Unfair and Deceptive Debt Collection Activities
600
10.2.4.5.
Unlicensed Collection Activity
606
10.2.5.
State Debt Collection Statutes' Remedies
606
10.2.5.1.
Is There a Private Cause of Action?
606
10.2.5.2.
Relief Available
608
10.2.5.3.
Defenses
611
10.3.
General State Consumer Protection Statutes Prohibiting Unfair and Deceptive Acts and Practices (UDAP)
613
10.3.1.
Nature and Advantages of a UDAP Claim
613
10.3.2.
UDAP Coverage of Debt Collection Activities
613
10.3.2.1.
General
613
10.3.2.2.
Debt Collection Is in Trade or Commerce
614
10.3.2.3.
Coverage Under Statutes Requiring a "Consumer Transaction"
614
10.3.2.4.
Types of Creditors, Collectors, and Debts Covered
615
10.3.2.5.
What Consumers Are Protected?
617
10.3.2.6.
State-by-State Survey of UDAP Statute's Coverage of Debt Collection
617
10.3.3.
Deceptive Debt Collection Activities
624
10.3.4.
Unfair and Unconscionable Debt Collection Activities Under UDAP Statutes
626
10.3.5.
Violation of Another Debt Collection Statute As UDAP Violation
629
10.3.6.
UDAP Remedies for Debt Collection Violations
630
10.4.
State Credit Repair Organization Statutes
632
10.4.1.
Introduction
632
10.4.2.
Coverage
632
10.4.3.
Substantive Prohibitions
632
10.4.4.
Private Remedies
633
10.5.
Unauthorized and Unethical Practice of Law by Creditors, Lawyers, and Collection Agencies
633
10.5.1.
Unauthorized Practice of Law by Creditors
633
10.5.2.
Unauthorized Practice of Law by Collection Agencies
633
10.5.3.
Unethical Practice of Law by Lawyers
636
10.5.4.
Remedies for Unauthorized Practice of Law and Ethical Violations
638
10.6.
State Criminal Statutes
640
10.7.
Enjoining Abusive Debt Collection Practices
640
10.8.
Other State Limitations on Debt Collection
641
10.8.1.
State Laws Governing Specific Businesses
641
10.8.2.
Usury Laws
641
10.8.3.
Privacy Laws
641
10.8.4.
State Loan Broker Laws
642
10.8.5.
State Laws Regulating Telemarketing, Autodialing, and Artificial Voice Messages
642
ch. 11
Credit Counseling, Debt Settlement or Negotiation, and Debt Elimination Providers
11.1.
Introduction
643
11.2.
Credit Counseling
643
11.2.1.
The Credit Counseling Industry
643
11.2.2.
The Requirement of Credit Counseling Before Filing Bankruptcy
644
11.2.3.
Abuse of Nonprofit Status
646
11.2.3.1.
The Significance of Nonprofit Status
646
11.2.3.2.
IRS Enforcement Efforts
646
11.2.3.3.
2006 Revision to Tax Exemption Standards for Credit Counseling Agencies
647
11.2.4.
Legal Claims
648
11.2.4.1.
Federal and State Credit Repair Laws
648
11.2.4.2.
State Debt Pooling, Debt Management, and Credit Counseling Laws
648
11.2.4.2.1.
Types of laws
648
11.2.4.2.2.
Substantive provisions
650
11.2.4.3.
FTC Regulation of Debt Relief Services
651
11.2.4.3.1.
Telemarketing Sales Rule Coverage of Debt Relief Services
651
11.2.4.3.2.
Exemptions
652
11.2.4.3.3.
Disclosures
652
11.2.4.3.4.
Prohibition against collection of fees before results are achieved
653
11.2.4.3.5.
Calculating the permissible fee once results are achieved
653
11.2.4.3.6.
Escrowing fees
654
11.2.4.3.7.
Deceptive telemarketing acts and practices
654
11.2.4.3.8.
Recordkeeping and substantiation of claims
654
11.2.4.3.9.
Enforcement
655
11.2.4.4.
UDAP Claims
655
11.2.4.5.
Fair Debt Collection Practices Act
655
11.2.4.6.
Claims Based on Telemarketing Calls to Consumers on Do-Not-Call List
656
11.2.4.7.
Other State and Federal Claims
656
11.2.5.
State and Federal Enforcement
656
11.3.
Debt Settlement or Negotiation Agencies
657
11.3.1.
Nature of Debt Settlement and Debt Negotiation
657
11.3.2.
Abuses by Debt Settlement and Debt Negotiation Providers
658
11.3.3.
Potential Legal Claims
659
11.3.3.1.
State and Federal Credit Repair Organization Laws; FDCPA
659
11.3.3.2.
State Debt Management Laws
660
11.3.3.3.
Provisions of the FTC's Telemarketing Sales Rule That Regulate Debt Relief Services
661
11.3.3.4.
UDAP Claims and Common Law Claims
661
11.4.
Debt Elimination
662
11.4.1.
Types of Debt Elimination Schemes
662
11.4.2.
Litigating Against Debt Elimination Schemes
663
Index
665
Quick Reference to Consumer Credit and Sales Legal Practice Series
695
Volume 2
Appendix A
Text of the Fair Debt Collection Practices Act
A.1.
Cross-Reference Table of Public Law 95-109 Section Numbers with 15 U.S.C. Section Numbers
717
A.2.
Fair Debt Collection Practices Act
717
A.3.
Senate Report No. 95-382 on the Fair Debt Collection Practices Act
724
Appendix B
Federal Trade Commission Advisory Opinions and Staff Letters Regarding the Fair Debt Collection Practices Act
B.1.
Federal Trade Commission Advisory Opinions
729
B.1.1.
Introduction
729
B.1.2.
Federal Trade Commission FDCPA Advisory Opinion, June 23, 2009
729
B.1.3.
Federal Trade Commission FDCPA Advisory Opinion, March 19, 2008
730
B.1.4.
Federal Trade Commission FDCPA Advisory Opinion, October 5, 2007
731
B.1.5.
Federal Trade Commission FDCPA Advisory Opinion, March 31, 2000
733
B.2.
FTC Informal Staff Letters
736
Appendix C
Federal Trade Commission Staff Commentary on the Fair Debt Collection Practices Act
759
Appendix D
Federal Standards for Private Tax Collectors
771
Appendix E
Summary of State Debt Collection Statutes
777
Appendix F
Practice Aids
F.1.
General Interview Checklist for Debt Collection Harassment
789
F.1.1.
General Questions
789
F.1.2.
Client's General Objectives
789
F.1.3.
Contacts by Letter
790
F.1.4.
Contacts by Telephone or Personal Visit
790
F.1.5.
General Questions on Damages
790
F.1.6.
Third Party Contacts
791
F.1.7.
Miscellaneous Collection Abuses
791
F.1.8.
General Questions on Underlying Debts
792
F.1.9.
Current Debts
792
F.2.
Chronology of Debt Collection Contacts
792
F.3.
Fair Debt Collection Act Violations Checklist (15 U.S.C. [§][§] 1692 to 1692p)
793
F.3.1.
Coverage
793
F.3.2.
Notice Violations
793
F.3.3.
False or Misleading Representations
794
F.3.4.
Unfair Practices
795
F.3.5.
Harassment or Abuse
796
F.3.6.
Communications with the Consumer and Third Parties
796
F.3.7.
Other Violations
797
F.3.8.
Damages
797
F.3.9.
Documents
798
F.4.
Abbreviations Commonly Used by Collectors
798
Appendix G
Sample Complaints
G.1.
Complaint Including Both Federal and State Causes of Action
801
G.2.
Complaint Under Fair Debt Collection Practices Act
803
Appendix H
Sample Discovery
H.1.
Sample Interrogatories
805
H.1.1.
Version One
805
H.1.2.
Version Two
806
H.2.
Sample Requests for Production
808
H.2.1.
Version One
808
H.2.2.
Version Two
809
H.3.
Sample Requests for Admissions
810
H.3.1.
Version One
811
H.3.2.
Version Two
811
H.4.
Sample Class Discovery
812
H.4.1.
Interrogatories
812
H.4.2.
Requests for Admissions
812
H.4.3.
Requests for Production of Documents
812
Appendix I
Sample Trial Documents
I.1.
Sample Brief in Support of Motion for Partial Summary Judgment
813
I.2.
Sample Jury Voir Dire Questions, Instructions, and Proposed Verdict Sheet
818
I.2.1.
Sample Plaintiff's Request for Voir Dire Questions
818
I.2.2.
Sample Proposed Jury Instructions
818
I.2.3.
Sample Verdict Sheet
823
I.3.
Pretrial Order
824
I.4.
Trial Brief
826
I.5.
Motion in Limine
828
I.5.1.
Plaintiff's Character
828
I.5.1.1.
Motion
828
I.5.1.2.
Memorandum in Support of Motion in Limine
828
I.5.2.
Attorney Fees
829
Appendix J
Sample Documents for Award of Attorney Fees
J.1.
Sample Motion for Award of Attorney Fees
831
J.2.
Sample Declaration in Support of Motion for Attorney Fees
832
J.3.
Sample Order for the Award of Attorney Fees
832
J.4.
Sample Memorandum in Support of Award of Attorney Fees
832
Appendix K
Fair Debt Collection Practices Act Case Summaries
K.1.
Coverage
839
K.1.1.
"Debt," 15 U.S.C. [§] 1692a(5)
839
K.1.1.1.
General Principles
839
K.1.1.2.
Rent, Condo Fees, and Co-op Fees
840
K.1.1.2.1.
Covered
840
K.1.1.2.2.
Not covered
841
K.1.1.3.
Dishonored Checks
842
K.1.1.3.1.
Covered
842
K.1.1.3.2.
Not covered
844
K.1.1.3.3.
Check diversion exemption
844
K.1.1.4.
Torts and Insurance Debts
844
K.1.1.4.1.
Covered
844
K.1.1.4.2.
Not covered
845
K.1.1.5.
Other Types of Debts
845
K.1.1.5.1.
Covered
845
K.1.1.5.1.1.
Utility bills
845
K.1.1.5.1.2.
Student loans
845
K.1.1.5.1.3.
Other
845
K.1.1.5.2.
Not covered
846
K.1.1.5.2.1.
Tax bills
846
K.1.1.5.2.2.
Child support
847
K.1.1.5.2.3.
Shoplifting, fines, and crimes
847
K.1.1.5.2.4.
Other
848
K.1.1.6.
Whether Debt Is a Consumer Debt
849
K.1.1.6.1.
Consumer debts covered
849
K.1.1.6.2.
Business debts not covered
851
K.1.2.
"Debt Collector," 15 U.S.C. [§] 1692a(6)
855
K.1.2.1.
General Definition
855
K.1.2.2.
Coverage of Specific Types of Collectors
860
K.1.2.2.1.
Attorneys
860
K.1.2.2.2.
Repossession
866
K.1.2.2.3.
Foreclosure companies
868
K.1.2.2.4.
Printing and mailing services
874
K.1.2.2.5.
Check guaranty companies
874
K.1.2.2.6.
Debt buyers [See also K.1.2.3.8, Debts assigned before default]
874
K.1.2.2.1.
Debt collector's employees
875
K.1.2.2.8.
Check diversion collectors
877
K.1.2.3.
Scope of Specific Exclusions
877
K.1.2.3.1.
Creditor, 15 U.S.C. [§] 1692a(6)(A)
877
K.1.2.3.1.1.
Creditor exempt
877
K.1.2.3.1.2.
Creditor covered
886
K.1.2.3.2.
Affiliated corporations, 15 U.S.C. [§] 1692a(6)(B)
889
K.1.2.3.3.
State and federal officials, 15 U.S.C. [§] 1692a(6)(C)
890
K.1.2.3.4.
Legal process servers, 15 U.S.C. [§] 1692a(6)(D)
893
K.1.2.3.5.
Nonprofit credit counselors, 15 U.S.C. [§] 1692a(6)(E)
894
K.1.2.3.6.
Fiduciaries and escrows, 15 U.S.C. [§] 1692a(6)(F)(i)
894
K.1.2.3.7.
Originators, 15 U.S.C. [§] 1692a(6)(F)(ii)
895
K.1.2.3.8.
Debts assigned before default, 15 U.S.C. [§] 1692a(6)(F) (iii) [See also K.1.2.2.6, Debt buyers]
895
K.1.2.3.9.
Certain secured parties, 15 U.S.C. [§] 1692a(6)(F)(iv)
902
K.1.2.4.
Derivative Liability of Defendants
902
K.1.3.
Flat Rate Debt Collection, 15 U.S.C. [§] 1692j
906
K.1.4.
Persons Protected; Standing Issues
908
K.1.5.
Communications Covered
912
K.1.6.
Miscellaneous
916
K.1.7.
General Validity and Interpretation of FDCPA
917
K.1.7.1.
Purposes and General Interpretation
917
K.1.7.2.
Federal Trade Commission Authority and Expertise
920
K.1.7.3.
Preemption and Relation to Other Laws [See also K.3.7.5, Bankruptcy Court Issues]
921
K.2.
Violations
923
K.2.1.
Acquisition of Location Information, 15 U.S.C. [§] 1692b
923
K.2.2.
Communication in Connection with Debt Collection, 15 U.S.C. [§] 1692c
925
K.2.2.1.
Time and Place of Communications, 15 U.S.C. [§] 1692c(a)(1)
925
K.2.2.2.
Communicating with Represented Consumer, 15 U.S.C. [§] 1692c(a)(2)
926
K.2.2.3.
Communications at Workplace, 15 U.S.C. [§] 1692c(a)(3)
931
K.2.2.4.
Communications with Third Parties, 15 U.S.C. [§] 1692c(b)
932
K.2.2.5.
Ceasing Communications, 15 U.S.C. [§] 1692c(c)
936
K.2.2.6.
Other
939
K.2.3.
Harassment or Abuse, 15 U.S.C. [§] 1692d
939
K.2.3.1.
Abusive Language, 15 U.S.C. [§] 1692d(2)
939
K.2.3.2.
Repeated or Continuous Telephone Calls, 15 U.S.C. [§] 1692d(5)
941
K.2.3.3.
Meaningful Telephone Identification, 15 U.S.C. [§] 1692d(6)
944
K.2.3.4.
General Standard: Harass, Oppress, or Abuse, 15 U.S.C. [§] 1692d
945
K.2.3.4.1.
General standard violated
945
K.2.3.4.2.
General standard not violated
948
K.2.3.5.
Other
951
K.2.4.
False or Misleading Representations, 15 U.S.C. [§] 1692e
952
K.2.4.1.
Least Sophisticated Consumer and Other General Standards
952
K.2.4.2.
Deceptive Thread of Legal Action
953
K.2.4.3.
Other Deceptive Threats
958
K.2.4.4.
Deceptive Implication of Attorney Involvement, 15 U.S.C. [§] i692e(3)
971
K.2.4.5.
Unlicensed Collection Agencies
983
K.2.4.6.
Use of "Credit Bureau" in Name
983
K.2.4.7.
Use of Telegrams and Simulated Telegrams
984
K.2.4.8.
Communicating False Credit Information, 15 U.S.C. [§] 1692e(8)
984
K.2.4.9.
Providing 15 U.S.C. [§] 1692e(11) Notices
988
K.2.4.10.
Disclosing the Amount of the Debt, 15 U.S.C. [§][§] 1692e(2)(A), 1692g(a)(1) [See also K.2.2.6, Other]
995
K.2.4.11.
False Representation of Character or Legal Status of the Debt, 15 U.S.C. [§] 1692e(2)(A)
1008
K.2.4.12.
Deceptive Practices in Debt Collection Suits
1011
K.2.4.13.
False Impression of Communication's Source, Authorization, or Approval, 15 U.S.C. [§] 1692e(9)
1018
K.2.4.14.
Use of True Business Name, 15 U.S.C. [§] 1692e(14)
1020
K.2.4.15.
Misrepresenting Collector As Credit Reporting Agency, 15 U.S.C. [§] 1692e(16)
1022
K.2.4.16.
Debt Settlement Offers
1022
K.2.4.17.
Time-Barred Debts
1024
K.2.4.18.
Deceptive Statements About Urgency
1027
K.2.4.19.
State Required Notices
1027
K.2.4.20.
Other Deceptive Acts
1027
K.2.5.
Unfair Practices, 15 U.S.C. [§] 1692f
1034
K.2.5.1.
General Unfairness Standards
1034
K.2.5.2.
Collection of Unauthorized Amounts
1036
K.2.5.3.
Postdated Checks
1044
K.2.5.4.
Repossession Practices
1044
K.2.5.5.
Postcards and Envelopes
1046
K.2.5.6.
Garnishment, Execution, Exempt Property
1047
K.2.5.7.
Unlicensed Collection
1048
K.2.5.8.
Time-Barred Debts
1049
K.2.5.9.
Unfair Practices in Debt Collection Suits
1050
K.2.5.10.
Other Unfair Practices
1052
K.2.6.
Validation of Debts, 15 U.S.C. [§] 1692g
1054
K.2.6.1.
Least Sophisticated Consumer and Other General Standards
1054
K.2.6.2.
Duns Overshadow Validation Notice
1056
K.2.6.3.
Oral Validation Requests and Disputes
1071
K.2.6.4.
Proper Verification of the Debt
1071
K.2.6.5.
Proper Debt Validation Rights Notice [See also K.2.6.2, Duns Overshadow Validation Notice]
1077
K.2.6.6.
Amount of Debt [See also K.2.4.10, Disclosing the Amount of the Debt]
1087
K.2.6.7.
Ceasing Collection of Unverified Debt
1089
K.2.6.8.
Other
1092
K.2.7.
Distant Forums, 15 U.S.C. [§] 1692i
1095
K.2.8.
Furnishing Deceptive Forms, 15 U.S.C. [§] 1692j [See also K.1.3, Flat Rate Debt Collection]
1098
K.2.9.
Miscellaneous
1098
K.3.
Remedies and Litigation
1099
K.3.1.
Damages
1099
K.3.1.1.
Actual Damages
1099
K.3.1.2.
Statutory Damages in Individual Actions
1106
K.3.1.3.
Other Damages Issues
1116
K.3.2.
Class Actions
1117
K.3.3.
Consumer's Attorney Fees and Costs
1138
K.3.3.1.
Standards for Award of Attorney Fees
1138
K.3.3.2.
LSC Programs
1145
K.3.3.3.
Examples of Attorney Fee Awards
1146
K.3.3.4.
Costs, 15 U.S.C. [§] 1692k(a)(3)
1156
K.3.4.
Injunctive or Declaratory Relief (Including Class Actions)
1156
K.3.5.
Statute of Limitations
1159
K.3.6.
Debt Collector's Defenses and Counterclaims
1171
K.3.6.1.
Bona Fide Error Defense, 15 U.S.C. [§] 1692k(c)
1171
K.3.6.2.
Other Defenses and Counterclaims
1186
K.3.6.3.
Offers of Judgment
1193
K.3.6.3.1.
Individual actions
1193
K.3.6.3.2.
Class actions
1196
K.3.6.4.
Debt Collector's Claim for Attorney Fees and Costs, 15 U.S.C. [§] 1692k(a)(3)
1198
K.3.6.5.
Arbitration
1206
K.3.6.6.
Litigation Privilege, Witness and Other Immunity
1209
K.3.7.
Jurisdiction and Venue
1210
K.3.7.1.
Removal and Federal/State Jurisdiction Issues
1210
K.3.7.2.
Collector's Counterclaims and Ancillary Jurisdiction
1213
K.3.7.3.
Consumer's State Claims and Supplemental Jurisdiction
1214
K.3.7.4.
Long-Arm Jurisdiction and Venue
1220
K.3.7.5.
Bankruptcy Court Issues
1223
K.3.7.6.
Other Jurisdictional Issues
1231
K.3.7.7.
Rooker-Feldman Issues
1232
K.3.8.
Pleadings and Motions Practice
1236
K.3.9.
Discovery
1247
K.3.10.
Trials
1252
K.3.11.
Res Judicata
1253
K.3.12.
Miscellaneous
1257
Appendix L
Debt Collection on the Web
1259
Appendix M
Finding Pleadings, Primary Sources on the Companion Website
M.1.
Pleadings and Primary Sources Found on the Companion Website
1263
M.2.
How to Access the Website
1264
M.3.
Locating Documents on the Website
1265
M.4.
How to Use the Documents, Find Microsoft Word Versions, and Locate Additional Features
1268
M.5.
Electronic Searches of This and Other NCLC Treatises' Chapters
1268
M.6.
Finding Additional Pleadings
1268