Does the FDCPA apply to my situation?
November 4, 2009 by Todd Murray · Leave a Comment
It is an unfortunate and little-known fact that the Fair Debt Collection Practices Act (FDCPA) does not apply to every debt collection situation. Two requirements must be met before the FDCPA comes into play.
First, the debt that is involved must be a “consumer debt”. The FDCPA defines “consumer debt” as any debt where the money was used to buy goods or services that were “primarily for personal, family, or household purposes.” What does this mean in English? It means that business debts are not covered by the FDCPA. Only debts incurred to buy goods or services for use by you, your family, or in your house.
Second, there must be a “debt collector” involved. Under the FDCPA, “debt collector” is a term of art that means a business that collects the debts of another. This means that the original lender or creditor is not covered by the FDCPA. So if you had a Capital One credit card and the Capital One collection department is calling you, they are not required to follow the FDCPA. But if ABC collection agency is collecting on behalf of Capital One, the FDCPA applies to them. Law firms are also covered by the FDCPA if they regularly collect consumer debts. So the FDCPA definitely applies to a collection law firm, but probably doesn’t apply to a law firm that only occasionally handles consumer collection cases.
Of course, even if your situation involves a consumer debt and a debt collector, there must still be a violation of the FDCPA. This article details many of the common FDCPA violations.
If you’re dealing with debt collectors, make sure to download and use my free debt collection call log so that you can document all of the debt collectors’ communications. And if the debt collector does anything that you think was unfair; untrue; or harassing, oppressive, or abusive, please contact me to discuss the situation further. I offer a free case review for all FDCPA cases and if I agree to handle your case, you won’t have to pay me any money up front. My fees come from the money I recover from you if you win your case or accept a negotiated settlement.
Debt collectors cannot violate one part of the FDCPA in an attempt to comply with another
October 29, 2009 by Todd Murray · Leave a Comment
The Fair Debt Collection Practices Act (FDCPA) requires that every voice message left by a debt collector tell you that the communication is from a debt collector. The FDCPA also prohibits debt collectors from telling third parties that you owe a debt. This can create a problem for debt collectors that leave voice messages. On the one hand, the debt collector must disclose that the communication is from a debt collector in the message. But on the other hand, disclosing that the communication is from a debt collector may violate the FDCPA’s prohibition of telling third parties about a debt. Debt collectors often whine about this conundrum.
The recent case of Edwards v. Niagra Credit Solutions, Inc. involved this exact scenario. The debt collector, apparently as a policy, did not disclose that the call was from a debt collector in voice messages. When it was sued under the FDCPA, the debt collector complained that if it left the required notice, it risked violating the part of the FDCPA that prohibits disclosing that a consumer owes a debt to a third party. The judge brushed aside the debt collector’s complaint of being in an impossible position by pointing out that the FDCPA “does not guarantee a debt collector the right to leave answering machine messages” and held that it is not legal to violate one part of the FDCPA in an attempt to comply with another part.
(photo: bepositivelyfit)
What is an Order for Disclosure?
October 14, 2009 by Todd Murray · Leave a Comment
In Minnesota, when a creditor obtains a judgment, they can request that the court send you a form called an Order for Disclosure or OFD. The form asks you where you work, how much you make, where you bank, and other questions about your assets. The idea is to allow the creditor to discover what assets you have available that may allow you to pay the judgment.
But here is the critical part: you MUST fill out the OFD and return it to the creditor within 10 days. If you don’t, then the creditor can go to a judge and ask the judge to issue a bench warrant for your arrest for failing to fill out and return the OFD. That’s right, they can haul you to jail for not filling out a form. Some of you may remember that I previously wrote about how you cannot go to jail for not paying your debts. And this is still true. But under Minnesota law, you can go to jail for contempt of court, which is essentially what refusing to fill out an OFD is. So if you get an Order for Disclosure in the mail, make sure you truthfully fill it out and return it. Not every debt collector will seek a bench warrant for failure to return an OFD, but some will and you don’t want to spend time in jail just for failing to fill out a form.
(photo: abardwell)
Can a debt collector serve me with a lawsuit by mail?
September 16, 2009 by Todd Murray · Leave a Comment
I’ve been asked several times recently whether a debt collector can serve someone with a lawsuit by mail. In Minnesota, the answer is yes, but only if you sign a form acknowledging receipt of the lawsuit. Merely mailing you a lawsuit is not valid service. If you don’t sign and return the acknowledgment, there is no service and you are under no obligation to respond to the lawsuit.
Apparently, some debt collectors are mailing lawsuits to consumers as a collection tactic. I imagine the belief is that the consumer will believe they have been served with the lawsuit and, out of fear, immediately call up the debt collector to make payment. If that is, in fact, the intent, I believe the approach is misleading. And depending on how the debt collector’s cover letter is worded, this tactic may be a violation of the Fair Debt Collection Practices Act (FDCPA).
If you receive a debt collection lawsuit in the mail, only sign and return the acknowledgment if you intend to answer the lawsuit within 20 days of the date you sign the acknowledgment. If you sign and return the acknowledgment, but don’t answer the lawsuit, a default judgment will probably be entered against you.
If you live in Minnesota and want help answering a debt collection lawsuit, feel free to contact me by using the contact form in the upper right corner of this page. I offer a number of flexible representation options, so even if you can only afford to pay a few hundred dollars, I might be able to help you.
Debt collectors cannot lie or mislead you when collecting a debt
September 14, 2009 by Todd Murray · Leave a Comment
The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from lying or misleading you when collecting debts. Probably the most common false or misleading representations made by debt collectors are when they misstate the character, amount, or legal status of a debt.
Examples of misrepresenting the “character” of a debt include: (1) threatening a lawsuit when the statute of limitations has expired; (2) claiming you owe a debt you are not legally obligated to pay, such as a debt of a deceased relative; and (3) suggesting a debt is due even though it has been discharged in bankruptcy.
Examples of misrepresenting the “amount” of a debt include: (1) failing to give you credit for payments you made; and (2) adding unauthorized charges, such as interest or fees, to the balance of the debt. This prohibition would also apply to a debt that you’ve already paid in full.
Examples of misrepresenting the “legal status” of a debt include: (1) attempting to collect money on a non-existent judgment; (2) threatening immediate garnishment when judgment has not been taken; and (3) implying that a lawsuit has been filed or served.
In addition to misrepresenting the character, amount, or status of a debt, the FDCPA also specifically defines the following conduct by debt collectors as false and misleading:
- Telling you that they are an attorney when they are not
- Implying that you have committed a crime or that you will go to jail if you don’t pay the debt
- Threatening to garnish your bank account or wages if the debt collector does not intend to do so
- Implying that documents are legal process, such as a lawsuit, when they are not
- Suggesting that documents are not legal process or do not require action by you when, in fact, they do
The FDCPA does not limit its definition of false and misleading representations to the conduct described above. It forbids just about any conduct that can be construed as false or misleading.
If you’re dealing with debt collectors, make sure to download and use my free debt collection call log so that you can document all of the debt collectors’ communications. And if the debt collector does anything that you think was unfair; untrue; or harassing, oppressive, or abusive, please contact me to discuss the situation further. I offer a free case review for all FDCPA cases and if I agree to handle your case, you won’t have to pay me any money up front. My fees come from the money I recover from you if you win your case or accept a negotiated settlement.
(photo: Joe Penniston)
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