Fair Debt Collection Practices Act

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July 24, 2018

These materials were prepared for general instruction and are not to be relied upon as a substitute for professional legal advice or services. Because of ever changing law and its application, the reader is strongly cautioned and advised to seek the updated advice and research of a legal professional on specific issues and facts.



In the 1970's, the mention of a debt collector conjured up images of an obnoxious, loud, threatening, foul-mouthed annoyance who differed little from a common street thug. To some extent the reputation was earned and to a great extent it was exaggerated. Nevertheless, Congress had its attention drawn to the substantial number of abuses involving the collection industry, abuses which for the most part had not been curbed by the individual states. On March 20, 1978, the Federal Fair Debt Collection Practices Act (FDCPA) went into effect as 15 U.S.C. 1692-1692o. It is also became known as Title VIII of the Consumer Credit Protection Act.

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The FDCPA attempts to bridle the collector in his efforts to collect a consumer or retail debt. It does so by providing specific disclosures to the debtor, by regulating contacts with the debtor, and offering substantial remedies for the violation of these provisions.

The following information is offered for instructional purposes only and is not designed to be a substitute for a thorough study and understanding of the appropriate statutes and case law pertaining to these fast-changing areas of law.


Do I need to worry? Ask yourself:

1. Am I collecting a debt?
2. Am I pursuing a consumer as opposed to a business?
3. Am I a third party debt collector?

What is a 'debt' within the meaning of the Act?

The Act defines a 'debt' as:
. . . any obligation or alleged obligations of a consumer to pay money arising out of a transaction in which 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. (15 U.S.C. 1692a (5))

  A 'debt' within the meaning of the FDCPA is a consumer debt only. It is a debt based on personal, family or household purposes. It is important to note that commercial debts are not covered by the Act. However, this distinction is not always easy to draw. Take for example a debt arising from an investment. After a cursory examination the collector may not know whether this debt is wholly consumer or retail or whether the investment was made solely for business purposes. To be safe, unless the collector knows without any doubt that a debt is commercial and not consumer, the debt should be treated as a consumer or retail debt. Otherwise, the collector is taking a foolish risk.  (See Miller v. McCalla, Raymer, Padrick, Cobb, Nichols and Clark, L.L.C., 214 F.3d 872, 875 (7th Cir. 2000); First Commerce of America, Inc. v. McDonald, 1995 WL 592432 (Conn. Super. Sept. 29. 1995)(Not Reported in A.2d).

Who must comply?

The Act applies to a 'debt collector' which is defined 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.

Until 1986, an attorney doing collections did not need to worry about the restrictions of the FDCPA. An attorney's concerns were limited to the representation of collection agency clients which were being accused of harassment, vulgarities, or trickery. But in that year, attorneys lost their exemption through an amendment to section 1692a(6)(f) of the Act, forcing them to come to grips with the restrictions imposed by the Act.

The key word for an attorney is "regularly". Does the attorney or firm regularly collect debts for another entity? If so, the Act applies and its restrictions are imposed. What must be understood is that "regularly" does not equate with a "majority" or "substantial portion" of the practice. What will be looked at is the volume of collection business performed by the firm even though the collection portion of the firm's entire practice may be relatively small. (See Kistner v. Law Offices Margelefsky, 518 F.3d 433 (6th Cir. 2008)).

Normally a creditor's own collection efforts would not be regulated by the Act. Its provisions are generally reserved for the third party collector. But a creditor can become liable for violations if an employee of the creditor uses a name which would tend to lead the a debtor to think the debt is being collected by a third party. Certainly a creditor sending demands to its debtor in the guise of a "collection agency" to create the false impression that the debtor is dealing with a collection agency, attorney, or credit bureau would violate the Act. Additionally, an in-house counsel attempting to collect a debt for his employer by using letterhead designed to appear as an independent law firm would subject the creditor to the Act. (See Catencamp v. Cendent Timeshare Resort Group, 471 F.3d 780 (7th Cir. 2006))


Contacts with debtors

Oh, did I wake you? This is "Buck", a legal consultant with Smith, Smith and Smith. I don't know how you deadbeats can sleep at midnight knowing how you've stolen from ABC Corp. I have talked to the DA's office and they are getting ready to sue your *#@ for writing that $20 rubber check!!! And I just got off the phone with your mother. She was shocked at what you're trying to pull. No we're not going to give you documentation of this bill. You know *!#* well you owe it and I won't let you stall any more. If I don't have full payment by noon tomorrow I will talk to your boss to see if he can advance you some money. And if that doesn't work I know someone who will convince you to find the money.

Collectors are paid for results through commissions, bonuses, and increased benefits. But all too often a collection quotas or other expectations entice a collector to use any method possible to obtain a financial reward or other recognition. Many creditors ascended the ladder of their profession by deception, threats, filthy language, and annoying calls. The FDCPA attempts to overhaul this system by specifying how far a collector can go in obtaining payment. And the overhaul truly is mammoth.

The initial contact

Debt collectors, including attorneys, can no longer send the office boilerplate demand letter to a consumer debtor with deadlines, demands, and the usual threat of suit. Either in the initial communications or within five days of that contact, the collector must send a written notice to the debtor. The notice must conspicuously include:
1. The creditor's name;
2. The amount owed;
3. A statement indicating that unless the debtor disputes the debt within 30 days the collector will assume the debt is valid;
4. A statement that the collector will obtain verification of the debt if disputed within the 30 day period and the verification or documentation will be provided to the debtor; and
5. A statement that if written request is made within the 30 day period the collector will provide the name of the original creditor.

The language of this notice is not to be relegated to an inconspicuous corner of the communication. Nor is it to be placed on the back of the document or in translucent gray. It must be legible and large enough to be read easily. The test is whether the "least sophisticated" debtor will recognize and understand the disclosure.

Nor is it to be contradicted by language which would tend to downplay or detract from the language of this notice. Certain threats and deadlines which previously defined a demand letter now bring the attorney or collector dangerously close to violating the Act. An example of a demand letter designed to comply with the act is included in these materials as an appendix. (See Avila v. Rubin, 84 F.3d 222 (7th Cir. 1996)) Having read this notice, the unsuspecting debtor may easily determine that nothing needs to be addressed for at least 30 days and that he has been granted a short period of immunity from suit. Until a 2006 amendment, appellate courts differed on whether a collector could sue the debtor or at least continue collection measures during the 30 day period. That amendment clarified that a collector does indeed have the right to collect within those 30 days:

Collection activities and communications that do not otherwise violate this title may continue during the 30-day period referred to in subsection (a) unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.

Although, at first glance, this amendment appears to allow collection efforts during the 30 days the practical application is far more complicated. Do demands during the 30 day period overshadow or create an inconsistency? Does the filing of a suit confuse the consumer who thinks he has 30 days to address the debt? The Second Circuit, in Ellis v. Solomon and Solomon, P.C., 591 F.3d 130 (2nd Cir. 2010), held that a served Complaint during the validation period was overshadowing. Arguably, the cautious collector will wait patiently and silently during this period until a more definitive ruling defines what if any actions can be taken during the 30 days. The amendment also states that a “formal pleading” does not trigger the need for a validation notice. It then fails to define “formal pleading”. But the general understanding is that the exemption does not include motions, discovery requests, or like communications. If a collector files and serves a Complaint as an initial communication to the consumer the Complaint does not require a validation notice. However, if the debtor calls the attorney in reference to the suit, that communication triggers the requirement for a validation notice within five days. The potential for confusion and overshadowing is clear.

Ongoing disclosures

Each and every subsequent communication with the consumer must cite that the communication is from a “debt collector”. This subsequent ongoing notice has been loosely referred to as a “mini-Miranda warning”. The reference stems from the previous statutory requirement that the collector provide notice in each communication that "the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose." Although the language of the notice has been simplified by statute a substantial number of collectors continue to use the full “mini-Miranda warning” on all communications. This warning notice must be included in all telephone contacts with the consumer and must be affixed to all written communications with the consumer debtor. Many collection agencies and law firms have gone so far as to add the warning to their office voice mail recordings so that each debtor calling in will receive the warning.

The 10th Circuit in Dikeman v. National Educators, Inc., 81 F.3d 949 (10th Cir. 1996), ruled that it is not a violation to omit the warning in subsequent discussions with debtor’s attorney. However, the court clearly cautioned debt collectors to use notices if the attorney is the debtor.


When and where can the debtor be contacted?

The FDCPA also provides restrictions as to when and where a debtor can be contacted. A debtor cannot be contacted at a time which is unusual or knowingly inconvenient. The hours of 8 a.m. to 9 p.m. (at debtor's location) are recognized as reasonable. As technology is developed, more questions arise:

- Cell phones can be used with a variety of area codes. Is the area code always matched with debtor's location?
- Can the collector leave a message on voicemail?
- Can the collector "block" a call?
- Does an email or text to the debtor raise issues?

Nor can a debt collector contact a debtor who is known to be represented by legal counsel, unless the debtor's lawyer fails to respond within a reasonable time. Of course, an attorney collector will be held to a stricter standard by his bar membership. Furthermore, a debtor may not be contacted at his work place if the collector knows or should know that the debtor's employer forbids such contacts.

A collector is also prohibited from using post cards, see-through envelopes, or other stationery which could place a third party on notice that the sender is a debt collector or that the addressee is the subject of debt collection.

Contacts with third parties

One of the major objectives of the Act is to eliminate harassing, damaging collection contacts with third parties. Unless given express authority by the debtor or the court, or unless otherwise allowed by the Act, a collector can only contact the debtor, the debtor's attorney, the creditor, the creditor's attorney, his own attorney, and possibly a credit reporting agency, in reference to the debt. Otherwise, there can be no communications with third parties concerning the debt.

The Act does recognize that locating a debtor is an essential element of collecting a legitimate debt. But efforts to locate the debtor through third parties are severely limited.

First, the collector must identify himself and tell the third party he is trying to confirm the individual's location or address. Only if asked specifically can the collector identify his employer.

Second, no reference or inference can be made to the debt. Third, normally only one contact can be made with the third party. Lastly, once the collector knows that the debtor is represented by legal counsel, all location questions must be addressed to that attorney unless all such communications are ignored.

Harassment and abuse

Several collection tactics are cited in the FDCPA as being harassment or abuse and thus violative of the Act. The following list is not all inclusive:

* Obscene or profane language.
* Threats of violence or criminal conduct against anyone.
* Repeated telephone calls or allowing a phone to ring repeatedly with the intent to annoy or harass.
* Failure to identify the telephone caller (unless restricted by third-party provisions).
* Publishing a "deadbeat list".

False representations

The collector must be truthful with the debtor. The FDCPA defines this duty by offering the following examples of "false, deceptive, or misleading" conduct outlawed by the Act. Again, the list is not exhaustive.

* Implying that the collector is sponsored by or affiliated with a governmental entity, a credit reporting agency, or is an attorney when such is not the case.
* Holding out documents as legal process or other governmental documents when they are not.
* Implying that documents are not legal process when they are.
* Using a false business name (A person collecting a debt may use an alias if it is used consistently, the employer knows of the alias, and the collector can easily be identified by that name).
* Using a deceptive means to assist in the collection of a debt or to gain information on the debtor.
* To imply a crime has been committed in an attempt to scare or humiliate a debtor.
* Threatening to take legal or other action which either legally cannot be taken or which is not intended. (See Newman v. Checkrite California, Inc., 912 F. Supp. 1354 (E.D. Cal 1995)
* Communicating credit information which is inaccurate.
* Failure to use the “debt collector” warning, or "mini-Miranda warning" in all communications with the debtor.

Unfair practices

15 U.S.C. 1692f provides a further list of violations which are deemed "unfair" when undertaken by a debtor collector. Again, it is made clear that this is not an exhaustive list of violations:

* Using post cards to communicate with the debtor.
* Using envelopes which identify the sender as a debt collector.
* Collecting an amount which is neither expressly authorized by contract or by law. (See Patzka v. Viterbo College, 917 F. Supp. 654 (W.D. Wis. 1996), Sandlin v. Shapiro & Fishman, 919 F.Supp. 1564 (M.D. Fla, 1996), and Newman v. Checkrite California, Inc., 912 F. Supp. 1354 (E.D. Cal 1995))
* Causing the debtor to be charged for telephone calls or other communications incurred because the collector conceals the purpose of the communication.
* Threatening to deposit or depositing a postdated check prior to the appropriate date.
* Soliciting a postdated check with the intent to use the instrument to threaten or cause a criminal action to be filed.
* Accepting a check or instrument which is postdated by more than five days unless the person offering the check is given written notice that the collector intends to deposit the check not more than ten or less than three business days prior to deposit.
* Threatening to take, through "self help", any property when the collector has no present right of possession or has no present intent to take the property, or the property has been exempted by law.



No longer can a collector force a debtor to defend a suit in a far off county or state either by whim or contract. That earlier practice was usually based on fine print hidden in paragraphs or pages of boilerplate language in a consumer contract. That leverage disappears pursuant to the FDCPA.

Under the Act, if the action is based on an interest in real property or a security interest in that property, the suit must be filed in the county (or district) in which the property is situated. Otherwise, the debtor must be sued where the contract was signed or in the county (or district) in which the debtor resides. (See Hester v. Graham, 2008 WL 2958984 (5th Cir. 2008))


A collector may not use letterhead or other forms which tend to misrepresent the purpose of the communication. For example, stationery headed with "Smith, Smith and Smith", giving the appearance of a law firm and threatening litigation, would be suspect if the letter were generated by a collection agency. Nor can a collector present the debtor with forms appearing to be legal process when such simulated forms are designed only as a bluff.


How can a debtor (and debtor's attorney!) be made whole?

A technical violation of the Act can be a tragic lesson for an unsuspecting collector, including of course an attorney collecting a debt. 15 U.S.C. 1692k (a) allows damages to be awarded in the following forms:

a) Actual damages stemming from the violation;
b) Additional damages set by the court not to exceed $1,000.00;
c) If a class action, an additional amount not to exceed $500,000.00 or 1% of the debt collector's net worth (whichever is less) may be awarded; and
d) Costs and reasonable attorney fees.

The Act has generated an explosion of claims which some cynics would argue are filed for the sole purpose of generating attorney fees. Often, the violations may seem small and the damages even smaller. However, Johnson v. Eaton, 80 F.3d 148 (5th Cir. 1996), does provide that attorney fees will not be awarded in the absence of actual or statutory damages. But there are still firms throughout the nation eager to provide legal representation to the injured victims even when the target is an attorney. This boutique specialty saturates many areas of the country and Utah attorneys have not escaped pursuit. (See also, Avila v. Van Ru Credit Corporation, 1995 WL 683775 (N.D. Ill. Nov. 16, 1995)(Not Reported in F. Supp.) for discussion of “recycled pleadings”)


The collector is not without armor in defending an FDCPA suit. Under 15 U.S.C. 1692k(c), if a violation is found, the collector will not be held liable if he can show that the violation was not intentional and was simple error. The collector will also be required to show that the mistake was made despite established procedures designed to avoid such an error. Courts will also look to the frequency of the violations and whether the violation was intentional. One interesting interpretation is Sibley v. Firstcollect, Inc., 913 F. Supp. 469 (M.D. La. 1995), where the court ruled that reliance on the advice of legal counsel was insufficient to show bona fide error.

In a class action, the court will review the debtor's resources and the number of people affected by the violations.

Statute of limitations

Any action filed to enforce the Act must be filed within one year of the violation. Jurisdiction and venue Jurisdiction and venue are proper in any federal or state court in which the debtor received the objectionable communications regardless of whether the collector has an office in or anywhere near that particular district.

Is there a ‘safe harbor’?

The U.S. Seventh Circuit Court of Appeals expressed a need for a “safe harbor” demand letter designed to comply with the Act and avoid further court challenges. The following is the text of that suggested letter taken from Bartlett v. Heibl, 128 F.3d 497, 500-01 (7th Cir. 1997):

Dear [Consumer]:

I have been retained by Micard Services to collect from you the entire
balance, which as of September 25, 1995, was $1,656.90, that you owe Micard
Services on your MasterCard Account No. 541470117068749.

If you want to resolve this matter without a lawsuit, you must, within one
week of the date of this letter, either pay Micard $316 against the balance that
you owe (unless you’ve paid it since your last statement) or call Micard at 1-800-
221-5920 ext. 6130 and work out arrangements for payment with it. If you do
neither of these things, I will be entitled to file a lawsuit against you, for the
collection of this debt, when the week is over.

Federal Law gives you thirty days after you receive this letter to dispute
the validity of the debt or any part of it. If you don’t dispute it within that period,
I’ll assume that it’s valid. If you do dispute it—by notifying me in writing to that
effect--I will, as required by law, obtain and mail to you proof of the debt. And
if, within the same period, you request in writing the name and address of your
original creditor, if the original creditor is different from the current creditor
(Micard Services), I will furnish you with that information too.

The law does not require me to wait until the end of the thirty-day period
before suing you to collect this debt. If, however, you request proof of the debt
or the name and address of the original creditor within the thirty-day period that
begins with your receipt of this letter, the law requires me to suspend my efforts
(through litigation or otherwise) to collect the debt until I mail the requested
information to you.


[Collection Attorney]

At first glance, this letter appears to be of great value to the collector. However, before adopting the letter as a standard form for the office the practitioner should consider:

  • The letter infers the dispute or request must be made in writing.
  • The letter does not include the “Mini-Miranda” warning.
  • The letter appears to overshaddow the 30 day allowance by demanding payment within a week.

Arguably, the main contribution of the letter is to underscore the need for clarification and simplification of the Act.

Ideas for office procedures:

A few changes in office operations may be necessary to minimize the collector's exposure. Consider the following:

  • It is believed by some that the legislative and judicial trend is to expand coverage to include commercial debts. Based on this and the periodic difficulty in accurately labeling a debt, it would be safer to treat all debts as consumer debts.
  • Attorneys should never make demands (certainly not consumer demands) on claims you are not actually handling. Don't become the "false impression" created by a collection agency. (See Gonzalez v. Kay, 577 F.3d 600 (5th Cir. 2009)
  • Make sure all charges have a legal basis. Educate clients on the importance of full documentation of the debt and of requesting only amounts which can be justified by the law and practice of that jurisdiction.
  • Place the appropriate "mini-Miranda warning" or “debt collector identification” on all communications including telephone calls. Even oral warnings should be documented.
  • Mark consumer files to ensure recognition, e.g. red file folders, large orange sticky dots, etc.
  • Maintain a well documented procedure manual on FDCPA compliance and ensure that all associated with the process be educated and cautioned on FDCPA issues.

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