Federal Debt Collection

Question 1

The Fair Debt Collection Practices Act (FDCPA)

Answer 1

regulates federal debt collection

Scope: limited to consumers, who is any natural person obligated or allegedly obligated to pay a debt

Question 2

Debt Under FDCPA

Answer 2

is an obligation of a consumer to pay money arising out of a transaction undertaken primarily for personal, family, or household purposes

Does not have to be yet reduced to a judgment to be a debt under the FDCPA

Question 3

Debt Collector Under FDCPA

Answer 3

any person who uses an instrumentality of interstate commerce or the mails in a business for which the principal purpose is the collection of debts, or who regularly collects or attempts to collect the debts owed another

• Does not apply to an entity collecting its own debt
• Applies to attorney’s who regularly try to collect debt on behalf of their clients

Question 4

Prohibited Communication with Debtor (FDCPA)

Answer 4

1. time and place- can’t be an unusual time or place or at a known inconvenient place
2. If represented by an attorney, debt collector can only communicate with the attorney
3. place of employment: communication is prohibited at place of employment if known that employer prohibits such communication

Question 5

Communication with 3P (FDCPA)

Answer 5

Debt collector can only communicate with a 3P to:

1) obtain location information (cannot embarrass the consumer or talk about the debt)
2) with the prior consent of the consumer
3) with express permission by the court
4) as reasonably necessary to effectuate a post judgment judicial remedy

Question 6

Validation of Debt (FDCPA)

Answer 6

the debt collector must, either in the initial communication or within five days thereafter, send the consumer written notice containing:

1) the amount fo debt
2) the dame of the creditor
3) a statement that the debt will be assumed valid unless within 30 days the consumer disputes the debt
4) a statement that if the consumer gives timely notice of a dispute, the debt collector will obtain verification of the debt

Question 7

Disputed Debt (FDCPA)

Answer 7

If the debt is disputed, the debt collector must cease collection until compliance

Compliance may be sending verification of the debt or by sending the creditor’s name

Failure to dispute the validity of a debt is not an admission of liability

Question 8

Prohibited Conduct under the FDCPA

Answer 8

1. Harassment or Abuse (of anyone, not just consumer)
2. False or Misleading Representations
3. Unfair or unconscionable practice

Not exclusive list

Question 9

Forum Restrictions on Debt Collection Action (FDCPA)

Answer 9

An action to enforce an interest in real property may be brought only in a judicial district in which the property is located

In other cases, an action must be brought where the consumer signed the contract or where she resides at commencement of the action

Question 10

Liability under the FDCPA

Answer 10

Enforcement may be either administrative by the Federal Trade Commission or though a private cause of action

Action must be brought within 1 year of violation

Court can award actual damages + additional damages not to exceed $1,000 if action brought by an individual

Question 11

Attorney’s Fees under the FDCPA

Answer 11

Same as for the DTPA

If consumer is successful with be awarded AF

If action was brought in and faith and for harassment, debt collector can recover AF