By Justin P. Nichols*
26

Introduction
Corruption runs rampant in the debt
collection industry and federal law has proved illequipped to stop it.1 This article explores the history
and prognosis of the debt collection industry,compares and contrasts federal debt collection
laws with Texas law, examines the effectivenessof seeking redress under each statutory scheme,
and advocates Texas practitioners use state law
rather than federal law to pursue relief for Texas
consumers aggrieved by debt collectors.
Journal of Consumer & Commercial Law

History & Background
From 1950 to 1971 consumer credit in the United Statesrose from $21.5 billion to $137.2 billion.2 In November 1957,
when Americans owed $48.4 billion in consumer debt,3 theGeorgia Supreme Court held “a consumer who voluntarily
applies for and obtains credit impliedly consents for her creditor
to take all reasonable action needed to collect the bill.”4 Today,
Americans owe some $2.5 trillion in consumer debt,5 and thebusiness of collecting the debt has grown exponentially.
In 1976 there were 5,000 debt collection firms across thecountry, collectively returning some $5 billion in outstanding
debt; each firm employing an average of eight employees.6 By
2005 there were 6,500 debt collection agencies, collectively
returning $39.3 billion in debt, and each hiring an average of 70
debt collectors.7 While many industries are contracting, the debt
collection industry is expected to continue to grow steadily; by
19.34% from 2008 to 2018.8
The path to the massive consumer credit and debt collectionindustries is not without a colorful history. In 1973 the Texas
Legislature, citing the need to address unethical debt collection
practices and harassment of consumers9 by “control[ing] andcurtail[ing] the practices used in the collection of debts,”10
enacted the Texas Debt Collection Act (“TDCA”).11 In 1978
Congress took up the issue. While some felt a federal law would
infringe on states’ rights, others argued state laws intended toprotect consumers from debt collectors were inadequate.12 In the
end Congress, finding “abundant evidence” of abusive, deceptive,
and unfair debt collection practices,13 enacted the Fair Debt
Collection Practices Act (“FDCPA”).14 Prior to the enactmentof the FDCPA, states were left to their own devises to regulate
debt collection practices.15 Today, it is not so much the right tocollect a debt in issue, but rather the manner in which the rightis exercised.16
Two major events triggered the furious growth of the debt
collection industry. During the 1980’s the Federal Deposit
Insurance Corporation began selling the debts previously owed tofailed banks to third parties.17 Secondly, the nation’s largest bankat the time, Bank of America, also began selling and assigning
old credit card debt to third party collectors.18 Thus began thewidespread practice of trading old debt, which continues to growtoday. And, because hundreds of companies buy old debt withoutdated, insufficient, or inaccurate information about debtors,19
the number of consumer complaints about the debt collectionindustry is growing faster than the industry itself.20
The Federal Trade Commission (“FTC”) receives more
complaints about the debt collection industry than any othercategory,21 and complaints are on the rise. In 2009 the FTC
received 119,609 complaints about in-house debt collectors;
a number which increased by 17% to a whopping 140,036
complaints in 2010.22 As for complaints involving third-party
debt collectors, the FTC processed 88,326 complaints in 2009
and 108,997 complaints in 2010; an increase of 23.4% in justa year’s time.23 All in all, nearly half of all consumer complaints
handled by the FTC involve debt collectors.
Comparison of the FDCPA and the TDCA
There are some important similarities, differences,advantages, and disadvantages to the FDCPA and Texas law,which includes the TDCA and common law torts unique to ourstate.
Application
The FDCPA applies to a person who “collects or attempts
to collects debts… owed… or asserted to be owed [to] another.”24
In short, the FDCPA applies only to third party, professional
Journal of Consumer & Commercial Law

debt collectors.25 Conversely, the TDCA applies to both debt
collectors (anyone who collects debts26) with special designation
for third party debt collectors.27 In 1995 the Supreme Court
extended the definition of “debt collector” in the context of
the FDCPA to include attorneys who regularly collect debts,28
and the TDCA largely follows the Supreme Court’s decision
when attorneys become subject to law regulating debt collection
practices.
Licensing and Bonding
The FDCPA does not have any licensing requirement for
third party debt collectors. Conversely, the TDCA requires any
third party debt collector that collects debts from Texas consumers
to obtain a $10,000 surety bond in favor of any person damaged
by a violation of the TDCA, and register the bond with thesecretary of state.29 Texas law also allows the surety to be sued
along with the third party debt collector,30 and a consumer neednot show a cognizable interest in the bond to maintain a cause ofaction for relief.31
Verification & Disputes
Both the federal and Texas statues provide procedures fora consumer to dispute a debt. While both statutes only apply
to disputes with third-party debt collectors, the procedures varysignificantly.
The FDCPA provides that a consumer may, within 30
days of receiving an initial communication from the collector,
write the collector and demand verification of the alleged debt
and the name and address of the original creditor.32 Generally,a debt collector must disclose the right to demand verificationin its initial communication to a consumer.33 However, debt
collectors always want consumers to pay more attention to thedemand for money than to the notice of the right to demandvalidation,34 which can create confusion for consumers. Oncethe initial 30-day period passes the debt collector is no longer
obligated to provide verification, and the consumer loses themeans by which to dispute a debt; a problem which has led the
FTC to recommend Congress amend the FDCPA to require amore conspicuous notice to consumers of their rights.35
In contrast, the TDCA permits a consumer to dispute theaccuracy of an alleged debt being collected by a third party debt
collector, but does not prescribe any particular timeframe.36
Upon receipt of a dispute under the TDCA the debt collector has
30 days in which to admit the alleged inaccuracy, deny the alleged
inaccuracy, or state it has not had enough time to complete its
investigation (in which case the debt collector must correct its file
as requested by the consumer).37 While the debt collector may
not have to produce validation documents to the consumer under
the TDCA, the absence of a time period in which to file a disputeallows Texas consumers to demand a debt collector investigate thealleged debt at any point during the debt collection process – asignificant advantage over the FDCPA.
Enforcement Schemes and Remedies of the FDCPA, theTDCA, and Texas Common Law
Both the FDCPA and the TDCA create a private cause ofaction for a consumer aggrieved by violations and also provides amechanism of administrative enforcement.
Administrative Enforcement
Until recently, the FTC was charged with enforcing the
FDCPA. Following the enactment of Dodd-Frank, the FTC
and the Consumer Financial Protection Bureau [CFPB] share
responsibility for enforcing the Act, with the CFPB having
primary authority.38 Because the CFPB has just begun to function,27

however, the FTC is still very active in its enforcement role.
Conduct by debt collectors that peaks the interest of the FTC,
however, must typically be extreme and repetitive, and individualcomplaints, no matter how valid, may often go unnoticed or
unaddressed.39 Although the FTC is forbidden from issuing
additional rules beyond the language of the FDCPA,40 the CFPB
now has the authority to do so. The FTC, unlike the CFPB, may
only treat violations of the FDCPA as violations of trade rules andseek injunctive relief.41 And while the FTC may seem to havegreat power to stop abusive debt collection practices by turning to
the courts, the FTC filed only three debt collection enforcement
actions in 2010 and seven in 2011.42 Only time will tell if the
CFPB takes a more active enforcement role.
Similarly, the TDCA allows the attorney general tosue for injunctive relief to prevent a violation of the TDCA.43
However, though receiving 3,390 consumer complaints regarding
debt collectors in 2010,44 the attorney general’s office estimates it
filed only one suit in 2010 based on the TDCA.45 There is also
at least one administrative regulation, applying only to lenders
regulated by the Office of the Consumer Credit Commission,
which prohibits using physical force or violence in an attempt tocollect a debt.46
While both federal and state statutes authorize action
to be taken by administrative agencies, in practice, an extremely
small number of suits are ever filed against debt collectors.
Private Causes of Action, Torts, & Remedies
Strict Liability & Statutory Damages
Both the FDCPA and the TDCA are generally strict liability
statutes; that is, a consumer need not show actual damages to beentitled to a statutory award for a violation.47 The FDCPA allows
a court to award up to $1,000 per case involving debt collection
violations,48 even without any proof of damages.49 Conversely,
the TDCA allows a court to award not less than $100 per violationof certain provisions of the TDCA.50 Unlike the FDCPA,
which establishes maximum relief, the TDCA establishes only aminimum statutory award for violations of certain provisions. It
should be noted, too, that the statutory award of not less than$100 per violation only comes into play when a violation isproven but actual damages are not shown,51 though a plaintiff
is entitled to statutory damages when she sues for and obtains
injunctive relief irrespective of damages.52 However, the boundsof how high the maximum can go has not been tested in Texas
courts. An important difference
between the two laws is that asingle FDCPA case, without ashowing of actual damages, isworth only up to $1,000, while
a TDCA case is worth not lessthan $100 per certain violation,
which can easily amount tomore than $1,000 per case.
Further, both statutes
allow for actual damages to beawarded to a consumer,53 but
actual damages can be difficult
to prove. For example, it may
be difficult to quantify the costof a debt collector who calls
at 7:00 a.m. on a Sunday, or adebt collector who threatens a
consumer with arrest if he fails
to pay his phone bill. This iswhere Texas law has a leg up on
the FDCPA.
28

The Common Law Tort of Unreasonable Collection in Texas
Because of Texas’s long-standing statutory provisions
protecting debtors (e.g. homestead provisions and a wide range ofproperty exempt from levy upon judgment54), interstate creditors
are more likely to rely on harassment, abuse and high interest
rates when collecting from Texas consumers.55 So, in addition
to the remedies prescribed by the TDCA, Texas recognizes thecommon law cause of action of wrongful/unreasonable debt
collection.56
In the beginning, the cause of action for unreasonable
collection was an intentional tort with unlimited room to growand develop.57 But in 1953, Duty v. General Finance,58 the Texas
Supreme Court recognized a debt collector may not resort to any
cruel device which can be imagined simply to collect a debt.59 By
1956, Texas appellate courts had held reckless conduct, combinedwith malice, but absent intent, was sufficient to sustain an award
for unreasonable collection.60 In 1963, in Moore v. Savage,61
Texas courts held a plaintiff who proves negligence, coupledwith physical injury, could be entitled to judgment without
any showing of recklessness.62 Modern cases hold the elementsof a claim for unreasonable collection amount to “a course ofharassment that [is] willful, wanton, malicious, and intended toinflict mental anguish and bodily harm,”63 though courts have notforeclosed on the possibility of a consumer obtaining a judgment
based on a lesser measure of culpability.
Injunctive Relief
While both the FDCPA and the TDCA grants standing
to a state agency to sue for injunctive relief, only the TDCA
entitles an individual consumer to seek an injunction against
a debt collector.64 And, unlike the traditional requirements
imposed on a plaintiff seeking injunctive relief, under the TDCA
no proof of irreparable injury need be presented – only that a
violation occurred in the past.65 An injunction, when properly
pled, can be quite broad, and extend beyond a debt collector’s
action toward a single consumer, and apply to a debt collector’s
general activity within the state.66 In this sense, and in termsof injunctive relief, the TDCA gives individual consumers equal
power as the attorney general to enforce the TDCA. And, withthe lower threshold necessary to be entitled to an injunction, thelikelihood of prevailing and recovering attorney fees (discussed
below) is much higher than other civil suits.
Culpability, Exemplary & Punitive Damages
One of the most pronounced ways in which the Texas tortof unreasonable debt collection
differs from the statutory
scheme of the FDCPA is in
the area of exemplary damages
and damages for emotional
distress. The FDCPA does
not provide any explicit
authorization for exemplary
damages.
Conversely,
exemplary damages may beawarded for unreasonable debt
collection67 if the offending
conduct is proven by clear
and convincing evidence.68 In
considering whether to award
exemplary damages and theamount, if any, courts are toconsider 1) the nature of thewrong, 2) the character ofthe offender’s conduct, 3) thesituation and sensibilities of theparties, 4) the extent to which
Journal of Consumer & Commercial Law

the conduct offends the public’s senses, and 5) the culpability ofthe offender.69 Ultimately, the amount of damages to which aparty is entitled is left to the jury.70 Further, reckless behavior bya debt collector, coupled with a showing of proximate cause can
support an award for mental suffering.71 Also, in addition to thecommon law tort for wrongful debt collection, a violation of the
TDCA’s is automatically a violation of the Texas Deceptive Trade
Practices Act72 (“DTPA”), which entitles a consumer to mental
anguish damages and treble economic damages if the offender
acted knowingly, and both treble mental anguish and economic
damages if the offender acted intentionally.73 Further, a dispute
over the degree of culpability is enough to survive a motion forsummary judgment and proceed to trial to resolve the intent
issue.74 In Household Credit v. Driscol,75 the court held even if adebt collector stops abusive conduct after a consumer complains,evidence of prior conduct is factually sufficient to find gross or
reckless conduct.76 The ultimate correction of the error does not
excuse a debt collector’s previous compounding of the problem.77
In short, Texas law specifically contemplates consideration of thedegree of culpability of an offending debt collector – an element
notably absent from the FDCPA.
Modern Methods of Evading Debt Collection Laws and Possible
Remedies
Deregulation of the credit industry, resulting largely fromthe Supreme Court’s decisions in two important cases effectively
nullifying state usury laws,78 enables subprime borrowers to easily
obtain credit, and high risk borrowers (including minorities,
rural, poor, and elderly consumers79) are often the targets ofdeceptive debt collection practices.80 And, more and more debt
collectors are using creative tactics to minimize the effectivenessof the FDCPA.81 The FDCPA has simply become ineffective
and incapable of protecting consumers from unscrupulous debt
collectors.82
Debt collectors are using technology to identify and target
vulnerable debtors,83 which can yield a higher rate of return oncollection efforts versus more sophisticated consumers. Thismethod of pseudo discrimination is prohibited by the ACA
International’s (the largest trade organization for the debt
collection industry) code of ethics,84 but the ACA recently ended
its practice of facilitating and investigating complaints filed byconsumers against members of ACA International.85 In thepast ACA International proactively pursued complaints, madefindings, and conditioned membership in the association oncompliance with ethical practices, including not discriminating
against certain groups of debtors. Now, the ACA merely
forwards the complaint to the company without any followup or investigation whatsoever. Perhaps if the FDCPA was
supplemented to include the ethical provisions of ACA’s Codeof Ethics,86 the consumer or the CFPB may have a means ofprosecuting discriminatory practices which intentionally target
unsophisticated consumers who are more likely to pay.
Another means by which debt collectors are circumventing
the FDCPA is the use of small claims courts. Debt collectors hire
lawyers, many of which are paper-mill law firms, who use the lax
pleading requirements of small claims courts to obtain default
judgments that would surely be more thoroughly scrutinized ina court of record.87 Consumers are starting to fight back, andlearning they can often win suits brought by third party debt
assignees by simply contesting the suits.88 But by filing suit, debt
collectors are often exempt from the disclosure requirements.89
Finally, while the FDCPA may have been effective against
combating the debt collection abuses of the past, it needs
to be amended to account for the new modern-day tricks.90
Collectors are now outsourcing activities oversees, where foreign
debt collectors flatly ignore the provisions of the FDCPA and
Journal of Consumer & Commercial Law

consumers have little or no recourse.91 And, where the FDCPA
fails to offer adequate remedies to consumer’s whose debts arecollected on foreign soil, the TDCA offers a special opportunity
for relief. Not only does the TDCA create liability for debt
collectors, but a rarely used provision also creates liability for acreditor who hires a debt collector when the creditor has actual
knowledge that the debt collector repeatedly violates the TDCA.92
By imposing liability on the creditors who hire the unscrupulous
debt collectors, even if the debt collector is oversees, a consumer is
far more likely to be able to reach a viable defendant in the UnitedStates under the TDCA instead of the FDCPA.
Attorney Fees
As a final note on remedies, and of great importanceto practitioners, both the FDCPA and the TDCA prescribe
the mandatory recovery of attorney fees to a prevailing party.93
And, under the TDCA and its tie-in to the DTPA, even when acreditor countersues for money owed, the mere establishment of
the violation will justify an award for attorney fees, regardless ofwhether the case yields the consumer a net recovery.94
Forums in Which to Litigate and Their Implications
Consumer AwarenessIn the past, a major hindrance to the effectiveness of the
FDCPA was unawareness of the act.95 Until recently, the FTC
engaged in a comprehensive consumer education program,including an animated video regarding consumer rights,96 andin 2010, the FTC distributed more than 65,000 brochures to
consumers, and the electronic version of the brochure was accessed
online approximately 680,000 times.97 The brochure encourages
consumers to file complaints with their state attorney general,98
but that can often be unhelpful for consumers. For example, eventhough there were more than 50,000 visits in 2010 to the Texas
attorney general’s website on debt collection, which yielded 3,390
complaints,99 only one debt collection case was filed for certain.100
The attorney general’s website advises consumers to send written
notification to collectors to cease communications, and explains
they may sue collectors for injunctions and damages,101 but noinformation is given on how exactly to accomplish this task.
Thus, many consumers enter the courts without representation in
an attempt to obtain relief.
Proceeding Pro Se
Many practitioners are reluctant to accept debt collection
cases because fees are typically contingent and lawyers will not
front costs if they do not feel there is a likelihood of success.102
In many cases, even though consumers are aware of the FDCPA
they remain unwilling to bring lawsuits.103 But there are plenty of
consumers who do sue on their own, and they are faced with doing
battle against large debt collection firms with disproportionate
resources, and a plethora of procedural challenges.
There is a perception pro se lawsuits lack merit because of abelief that good claims attack legal representation and bad claims
do not.104 But this may not be the case. However, while thepleadings of pro se complaints are viewed with some leniency,105
they are held to the same procedural requirements as attorneys.106
Now, after the Supreme Court’s holding in Bell Atlantic v.
Twombly107 in 2007, which requires trial courts to disregard
conclusory allegations in pleadings without any presumption oftruth,108 and more recently, Ashcroft v. Iqbal109 in 2009, which
effectively emasculated the doctrine of liberal construction of
pro se pleadings under Haines,110 pro se lawsuits are dismissedin federal courts 85% of the time based on F. R. C. P. 12(b)(6)111 – twice the rate of other suits. 112 And, if a litigant survives
initial motions to dismiss, courts are generally reluctant to provide
any further leniency, especially at the summary judgment stage,
29

and hold pro se litigants to strict procedural rules.113 This trend
gives little assurance that pro se litigants will have adequate accessto the courts.114
Pro se claims comprise a substantial portion of federal court
dockets115 – 37% to be exact116 – and often find themselves
confused, scared, and uncertain when trying to navigate thecomplicated federal court system,117 or when negotiating with
big debt collection companies. These consumers need legal
representation, and it is worthwhile for lawyers to accept thesetypes of cases if they carefully develop a strategy in approachingsuits against debt collectors.
Selecting a Forum in Which to File Suit
Consumers can sue a debt collector under state law, federallaw, or both,118 but the forum and law chosen can have a profound
impact on the outcome of a lawsuit. Typically, plaintiffs regard
federal courts as a less favorable forum119 and instead prefer state
courts.120
When filing a debt collection lawsuit in state courts, lawyers
should be careful not to include any claim based on the FDCPA.
Because the FDCPA is based on federal law, a defendant sued instate court for violations of the FDCPA will likely remove thesuit to federal court121 and invoke the court’s federal question jurisdiction.122 Only 37%
of plaintiffs whose cases
are removed to federal
court based on federal
LQWHUHVWMXVWL¿HVWKH question jurisdiction
prevail on their FDCPA
claims.123 Federal courts
have not been expansive
when interpreting the
FDCPA,124 and, therefore, it is better to rely solely on state law claims, which, in thecase of the TDCA are often more stringent than the provisions of
the FDCPA.125
Also, to avoid federal court a suit must seek realistic damages when suing a diverse defendant. A diverse debt collector canremove the case to federal court and invoke the court’s diversity
jurisdiction if the suit seeks more than $75,000 in damages.126 In
cases removed to federal court based on diversity, only 34% of
plaintiff’s win.127 Diversity may be destroyed in suits against third
party debt collectors by adding TDCPA claims against the debt
collector’s surety,128 if any, and the original creditor,129 which may
be Texas citizens for diversity purposes.
Because plaintiffs tend to be so unsuccessful in federal court,
whether based on FDCPA claims or diversity, practitioners filingsuit against debt collectors (and other parties, if need be) should
do so in state court, for reasonable damages, and for state law
claims.








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Conclusion
When the FDCPA was enacted critics complained it would
preempt state laws, and arguing Congress should stay out of anissue that, in the 1970’s, was viewed as only affecting a small
portion of the population.130 But the consumer credit industry
has always been plagued with abuses,131 and the problems are only
getting worse as consumer credit card debt continues to grow.132
While creditors do have a right to expect to be paid, their rightto collect is not unlimited.133 No ethical or professional businessinterest justifies the outrageous conduct134 so many consumers
witness today. Texas has been on the forefront of protecting
consumers through the TDCA, its tie-in to the DTPA, and thecommon law tort of unreasonable collection. By carefully draftinga pleading to include only state law claims, practitioners can
avoid a costly federal forum and pursue remedies unique to Texas
30

law, including injunctive relief, statutory and treble damages,
exemplary damages, and attorney fees. The TDCA is a far better
choice for consumers, pro se or otherwise, and practitioners, who
might otherwise be leery of accepting such a case. The TDCA
and the common law tort of unreasonable collection offers Texas
consumers all the tools necessary to successfully combat abusive
debt collectors, and makes it worthwhile for practitioners toaccept debt collection cases.
* Justin P. Nichols received his undergraduate degree fromSouthern Methodist University and his J.D. from St. Mary’s
University School of Law. He currently owns The Nichols Law
Firm, PLLC. Special thanks goes to Genevieve Hebert-Fajardo,
clinical professor of law at the Center for Legal and Social Justiceat St. Mary’s University School of Law, for her advice, insight, andguidance on this project.
1 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
713 (2006).
2 William R. Crow, Jr., Comment, The Texas Debt Collection
Practices Act: Relief for the Harassed Consumer?,  S. M’ L. J.
, 773 n.1 (1977).
3 F. R., Federal Reserve Statistical Release: G.19 Consumer
Credit (Dec. 7, 2011), available at http://www.federalreserve.gov/
releases/g19/Current/ (last visited Dec. 27, 2011).
4 Gouldman-Taber Pontiac, Inc. v. Zerbst, 100 S.E.2d 881,
883 (Ga. 1957) (concluding a creditor who wrote a consumer’s
employer regarding a private debt did not act unreasonably).
5 F. R., Federal Reserve Statistical Release: G.19 Consumer
Credit (Dec. 7, 211), available at http://www.federalreserve.gov/
releases/g19/Current/ (last visited Dec. 27, 2011).
6 Matthew W. Ludwig, Abuse, Harassment, and Deception: How
the FDCPA is Failing America’s Elderly Debtors, 16 E L. J.
135, 141 (2008).
7 Matthew W. Ludwig, Abuse, Harassment, and Deception: How
the FDCPA is Failing America’s Elderly Debtors, 16 E L. J.
135, 141 (2008).
8 U.S. B  L S, Nat’l Employment Matrix,
Bill and Acct. Collector: 2008 and 2018, Projected (2009), available
at ftp://ftp.bls.gov/pub/special.requests/ep/ind-occ.matrix/occ_
pdf/occ_43-3011.pdf (last visited Oct. 13, 2011).
9 The Texas Debt Collection Act: Hearings on Tex. S.B. 252
Before the Sen. Comm. on Jurisprudence, 63d Leg., R.S. 4 (Apr.
5, 1973) (comments of Sen. Gammage) (transcript available fromthe Legislative Reference Library of Texas).
10 House Comm. on Judiciary, Bill Analysis, Tex. S.B. 252, 63rd
Leg., R.S. (1973).
11 Act of May 22, 1973. 63rd Leg., R.S., ch. 547., Gen & Sp.
Laws of Tex. (now codified as T. F. C. A. § 392 (West2010)).
12 Kirsten N. Arnold, Note, Getting Payment for a Clean Billof Health: Reconciling the Health Insurance Portability andAccountability Act (“HIPPA”) with the Fair Debt Collection Practices
Act (“FDCPA”) for Health Care Debt Collection, 93 I L. R.
605, 614 (2008).
13 15 U.S.C. § 1692, sec. 802(a).
14 15 U.S.C. § 1692.
15 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
718 (2006).
16 EMC Mortg. Corp. v. Jones, 252 S.W.3d 857, 870 (Tex.
App.—Dallas 2008, no pet.).
17 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
Journal of Consumer & Commercial Law

World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
725 (2006).
18 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
725 (2006).
19 Matthew W. Ludwig, Abuse, Harassment, and Deception: How
the FDCPA is Failing America’s Elderly Debtors, 16 E L. J.
135, 155 (2008).
20 See Matthew W. Ludwig, Abuse, Harassment, and Deception:
How the FDCPA is Failing America’s Elderly Debtors, 16 E L.
J. 135, 157 (2008).
21 F. T C’, Annual Report 2011: Fair Debt Collection
Practices Act, at 4 (2011), available at http://www.ftc.gov/os/2011/03/110321fairdebtcollectreport.pdf (last visited Oct. 12, 2011).
22 F. T C’, Annual Report 2011: Fair Debt Collection
Practices Act, at 5 (2011), available at http://www.ftc.gov/os/2011/03/110321fairdebtcollectreport.pdf (last visited Oct. 12, 2011).
23 F. T C’, Annual Report 2011: Fair Debt Collection
Practices Act, at 5 (2011), available at http://www.ftc.gov/os/2011/03/110321fairdebtcollectreport.pdf (last visited Oct. 12, 2011).
24 15 U.S.C. §1692a, sec. 803(5) (emphasis added).
25 A. G.  T., http://www.oag.state.tx.us/consumer/
debt_collection.shtml (describing the differences between the
FDCPA and the TDCA) (last visited Oct. 24, 2011).
26 T. F. C A. § 392.001(6) (defining the term “debtcollector”).
27 See T. F. C A. § 392.001(7) (defining the term
“third party debt collector”); see also A. G.  T., http://
www.oag.state.tx.us/consumer/debt_collection.shtml (describing
the application of the ) (last visited Oct. 24, 2011).
28 Heintz v. Jenkins, 514 U.S. 291, 292 (1995) (affirming theSeventh Circuits’ application of the FDCPA to lawyers who
regularly collect debts, including initiating litigation for the
purposes of collection consumer debts).
29 T. F. C A. § 392.101
30 T. F. C A. § 392.102 (authorizing a plaintiff to sue
both the third party debt collector and the surety).
31 Marauder Corp. v. Beall, 301 S.W.3d 817, 820-21 (Tex.
App.—Dallas 2010, no pet.)
32 15 U.S.C. § 1692g, sec. 809(a)(4) and (5).
33 15 U.S.C. § 1692g, sec. 805(a).
34 Elwin Griffith, Identifying Some Trouble Spots in the Fair Debt
Collection Practices Act: A Framework for Improvement,  N. L.
R. 762, 787 (2005).
35 Elwin Griffith, Identifying Some Trouble Spots in the Fair Debt
Collection Practices Act: A Framework for Improvement,  N. L.
R. 762, 826 (2005).
36 T. F. C A. § 392.202(a).
37 T. F. C A. § 392.202(b).
38 See 15 U.S.C. § 1692l, sec. 814(a). In January 2012,
the CFPB and the FTC entered into a Memorandum ofUnderstanding (“MOU”) to coordinate efforts to protect
consumers and avoid duplication of federal law enforcement andregulatory efforts. Memorandum of Understanding Between theConsumer Financial Protection Bureau and the Federal Trade
Commission (Jan. 2012). The MOU is available at, http://ftc.
gov/os/2012/01/120123ftc- cfpb-mou.pdf.
39 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. CAL. L. REV.
711, 722 (2006).
40 15 U.S.C. § 16921l, sec. 814(d).
41 Matthew W. Ludwig, Abuse, Harassment, and Deception: How
the FDCPA is Failing America’s Elderly Debtors, 16 E L. J.
135, 146 (2008).
42 See generally, CFBP A R , F D
Journal of Consumer & Commercial Law

C P A, (2012), available at http://files.
consumerfinance.gov/f/201203_cfpb_FDCPA_annual_report.
pdf; FTC, A R : F D C
P A, at 11 (2011), available at http://www.ftc.gov/os/2011/03/110321fairdebtcollectreport.pdf (also noting the FTC
settled with West Asset Management in March 2011 for $2.8
million – the largest penalty ever assessed in a debt collectioncase)
43 T. F. C A. § 392.403(d).
44 Email from Jordan Hale, Assistant Pub. Info. Coordinator,
Office of the Attorney General of Texas, to Justin P. Nichols (Nov.
9, 2011) (responding to a request for public information, No. 1132042, regarding debt collector complaints) (on file with author).
45 Email from Jordan Hale, Assistant Pub. Info. Coordinator,
Office of the Attorney General of Texas, to Justin P. Nichols(Dec. 15, 2011) (responding to a request for public information,
No. 11-32311, suits filed by the attorney general’s office in 2010
based on TDCA violations) (on file with author).
46 T. A. C § 83.859 (West 2010).
47 Bruce N. Menkes and Anna-Katrina S. Christakis, The FDCPA
Take a New Direction: Federal Review of State Court Litigation
Practices, 63 B. L. 717, 717 (2008); see also Marauder Corp.
v. Beall, 301 S.W.3d 817, 822 (Tex. App.—Dallas 2010, no pet.)(holding proof of actual damages is not a pre-requisite to recovery
of statutory damages under the TDCA).
48 15 U.S.C. § 1692k, sec. 813(a)(2) (emphasis added).
49 F. T C’., Debt Collection FAQs: A Guide forConsumers, at 4 (2009), available at http://www.ftc.gov/bcp/edu/
pubs/consumer/credit/cre18.pdf (last visited Oct. 12, 2011).
50 T. F. C A. § 392.403(e) (providing minimum
damages which shall be awarded to a consumer who successfully
maintains an cause of action against a debt collector forviolating §§ 392.101 (bonding requirement), 392.202 (dispute
procedures), or 392.301(a)(3) (representing or threatening torepresent to a third party that the consumer is willfully refusing
to pay a debt when the consumer has filed a written dispute
regarding the debt)).
51 Marauder Corp. v. Beall, 301 S.W.3d 817, 822 (Tex. App.—
Dallas 2010, no pet.).
52 Marauder Corp. v. Beall, 301 S.W.3d 817, 823 (Tex. App.—
Dallas 2010, no pet.)
53 15 U.S.C.§ 1692k, sec. 813(a)(1); and T. F. C A.
§ 392.403(a)(2).
54 See generally T. P. C A. §42 et. seq. (outlining
the types of personal property exempt from seizure, execution,
garnishment, or attachment).
55 William R. Crow, Jr., Comment, The Texas Debt Collection
Practices Act: Relief for the Harassed Consumer?,  S. M’ L. J.
, 776 (1977).
56 See Duty v. Gen. Fin. Co., 273 S.W.2d 64, 65 (Tex. 1954) (firstrecognizing the common law tort of wrongful debt collector);
see also Boe W. Martin, A Creditor’s Liability for Unreasonable
Collection Efforts: The Evolution of a Tort in Texas, 9 S. T. L.
J. 127, 135 (1967) (clarifying that it is more accurate to call thecause of action “unreasonable collection”).
57 Boe W. Martin, A Creditor’s Liability for Unreasonable
Collection Efforts: The Evolution of a Tort in Texas, 9 S. T. L.
J. 127, 132 (1967); see also EMC Mortg. Corp. v. Jones, 252
S.W.3d 857, 868 (Tex. App.—Dallas 2008, no pet.)
58 273 S.W.2d 64.
59 Duty v. Gen. Fin. Co., 273 S.W.2d 64, 66 (Tex. 1954).
60 Indus. Fin. Serv. Co. v. Riley, 295 S.W.2d 498, 506 (Tex.
Civ. App.—Dallas 1956, writ granted) (suggesting a finding ofrecklessness, combined with malice, will support a judgment
against a debt collector for unreasonable collection efforts), aff’d31

in part and rev’d in part on other grounds, 302 S.W.2d 652 (Tex.
1957).
61 359 S.W.2d 95.
62 Moore v. Savage, 359 S.W.2d 95, 96 (Tex. Civ. App.—
Waco 1962, writ ref ’d n.r.e.) (concluding a cause of action for
unreasonable collection efforts does not require willfulness ormaliciousness, but a showing of negligence causing physical injury
is enough to sustain damages); see also Boe W. Martin, A Creditor’s
Liability for Unreasonable Collection Efforts: The Evolution of a Tort
in Texas, 9 S. T. L. J. 127, 134 (1967).
63 EMC Mortg. Corp. v. Jones, 252 S.W.3d 857, 868–69(Tex. App.—Dallas 2008, no pet.) (citing Montgomery Ward
& Co. v. Brewer, 416 S.W.2d 837, 844 (Tex. App.—Waco 1967,
writ ref ’d n.r.e.)).
64 T. F. C A. § 392.403(a)(1).
65
Marauder Corp. v. Beall, 301 S.W.3d 817, 820 (Tex.
App.—Dallas 2010, no pet.).
66
Marauder Corp. v. Beall, 301 S.W.3d 817, 821 (Tex.
App.—Dallas 2010, no pet.) (reversing the trial court’s issuance ofa statewide injunction against a debt collector when the plaintiff
only plead for individual relief, but suggesting had the plaintiff
sought statewide relief in her pleadings the court would haveupheld the broad injunction).
67 Pullins v. Credit Exchange of Dallas, Inc., 538 S.W.2d 681,
683 (Tex. Civ. App.—Waco 1976, writ ref ’d n.r.e.).
68 EMC Mortg. Corp. v. Jones, 252 S.W.3d 857, 873 (Tex.
App.—Dallas 2008, no pet.).
69 Alamo Nat’l Bank v. Kraus, 616 S.W.2d 908, 910 (Tex.
1981).
70 EMC Mortg. Corp. v. Jones, 252 S.W.3d 857, 871 (Tex.
App.—Dallas 2008, no pet.) (citing Grogan v. Santos, 617 S.W.
2d 312, 315-16 (Tex. Civ. App.—Tyler 1981, no writ).
71
Boe W. Martin, A Creditor’s Liability for Unreasonable
Collection Efforts: The Evolution of a Tort in Texas, 9 S. T. L. J.
127, 132 (1967). (citing Indus. Fin. Serv. Co. v. Riley, 295 S.W.2d498, 506 (Tex. Civ. App.—Dallas 1956, writ granted) as the firstcase to hold liability could be imposed for unreasonable collection
under some theory other than intentional conduct); Cf. Harned v.
E-Z Finance Co., 254 S.W.2d 81 (Tex. 1953) (rejecting an award
for mental anguish absent proof of accompanying physical injury);
but see William R. Crow, Jr., Comment, The Texas Debt Collection
Practices Act: Relief for the Harassed Consumer?,  S. M’ L.
J. , 779(1977) (explaining Texas courts generally construe
physical injury to include infliction of emotional distress).
72 T. F. C A. § 392.404(a) (making a violation of
the TDCA a deceptive trade practice actionable under the Texas
Deceptive Trade Practices Act).
73 T. B.  C. C § 17.50(b)(1).
74
Blanche v. First Nationwide Mortg. Corp., 74 S.W.3d444, 445-46 (Tex. App.—Dallas 2002, no pet.) (concluding a
consumer’s informal notice of bankruptcy to mortgagee raised afact issue as to the mortgagee’s degree of culpability which needed
to be resolved by the fact finder at trial in order to determine theamount of possible damages which could be awarded); see also
EMC Mortg. Corp. v. Jones, 252 S.W.3d 857 (Tex. App.—Dallas
2008, no pet.) (requiring a showing that the plaintiff was actuallydenied credit or was offered a higher interest rate in order tosupport an award for loss of credit reputation).
75 989 S.W.2d 72.
76 Household Credit Servs., Inc. v. Driscol, 989 S.W.2d 72,
88–89 (Tex. App.—El Paso 1998, pet. denied)77 EMC Mortg. Corp. v. Jones, 252 S.W.3d 857, 870 (Tex.
App.—Dallas 2008, no pet.).

32

78 See generally Marquette Nat’l Bank of Minneapolis v. Firstof Omaha Serv. Corp., 439 U.S. 297, 313 (1978) (holding abank may charge customers any rate allowed by the home state of
the bank, even when the maximum allowable interest rate in the
bank’s home state exceeds that of the consumer’s home state), andSmiley v. Citibank, 517 U.S. 735, 745 (1996) (declaring fines,
charges, dues, and fees are all considered “interest,” and banks arebound by the maximum interest allowed in the bank’s home state,
not the state of the consumer).
79 Matthew W. Ludwig, Abuse, Harassment, and Deception:
How the FDCPA is Failing America’s Elderly Debtors, 16 E L.
J. 135, 138 (2008).
80 Matthew W. Ludwig, Abuse, Harassment, and Deception:
How the FDCPA is Failing America’s Elderly Debtors, 16 E L.
J. 135, 137–38 (2008).
81 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
734 (2006).
82 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
724 (2006).
83 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
729 (2006).
84 ACA I’. Code of Ethics and Code of Operations of
ACA International, as amended on Nov. 23, 2010, at 4 (available
at http://www.acainternational.org/files.aspx?p=/images/12909/
codeofethics-ops_2010.pdf ) (last visited Dec. 27, 2011).
85 ACA I’. http://www.acainternational.org/about-file-anethics-complaint-209.aspx (informing consumers effective Sept.
19, 2011, ACA International will no longer directly mediate
consumer complaints against debt collectors) (last visited Dec. 27,
2011).
86 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
740 (2006) (proposing incorporation of the ACA’s Code of Ethics
into the FDCPA).
87 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
741-42 (2006).
88 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
746 (2006).
89 15 U.S.C. §1692g, sec. 809(d).
90 Matthew W. Ludwig, Abuse, Harassment, and Deception:
How the FDCPA is Failing America’s Elderly Debtors, 16 E L.
J. 135, 157 (2008).
91 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
732-34 (2006).
92 T. F. C A. § 392.306.
93 15 U.S.C. § 1692k, sec. 813(a)(3); and T. F. CA. § 392.403(b).
94 McKinley v. Drozd, 685 S.W.2d 7, 9 (Tex. 1985).
95
John Tavormina, Comment, The Fair Debt Collection
Practices Act: The Consumer’s Answer to Abusive Collection Practices,
52 T. L. R. 584, 599 (1978).
96F. T C’, Annual Report 2011: Fair Debt
Collection Practices Act, at 14 (2011), available at http://www.
ftc.gov/os/2011/03/110321fairdebtcollectreport.pdf (last visited
Oct. 12, 2011).
97
F. T C’, Annual Report 2011: Fair Debt
Collection Practices Act (2011), available at http://www.ftc.gov/os/2011/03/110321fairdebtcollectreport.pdf (last visited Oct. 12,2011).
Journal of Consumer & Commercial Law

98 F. T C’., Debt Collection FAQs: A Guide forConsumers (2009), available at http://www.ftc.gov/bcp/edu/
pubs/consumer/credit/cre18.pdf (last visited Oct. 12, 2011).
99 Email from Jordan Hale, Assistant Pub. Info. Coordinator,
Office of the Attorney General of Texas, to Justin P. Nichols(Nov. 9, 2011) (responding to public information request no.
11-32042, regarding debt collector complaints) (on file withauthor).
100 Email from Jordan Hale, Assistant Pub. Info. Coordinator,
Office of the Attorney General of Texas, to Justin P. Nichols(Dec. 15, 2011) (responding to public info. request no.: 1132311, estimating the number of TDCA-related lawsuits filed by
the attorney general in 2010) (on file with author).
101 A. G.  T., http://www.oag.state.tx.us/consumer/
debt_collection.shtml (last visited Oct. 24, 2011).
102 Roy K. Schneider, Comment, Illiberal Construction of Pro
Se Pleadings, 159 U. P. L. R. 585, 617-18 (2011).
103 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
723 (2006).
104 Roy K. Schneider, Comment, Illiberal Construction of Pro
Se Pleadings, 159 U. P. L. R. 585, 594 (2011).
105 Haines v. Kerner, 404 U.S. 519, 520 (1972) (per curium).
106 Jessica Case, Note, Pro Se Litigants at the Summary Judgment
Stage: Is Ignorance of the Law and Excuse?, 90 K. L. J. 701, 708(2002).
107 Bell Atlantic Corp. v. Twomldy, 550 U.S. 544, 555 (2007)(holding a plaintiff must allege more than mere conclusions andspeculation in order to survive summary judgment, and must
allege facts which, if true, would be grounds for relief ).
108 Roy K. Schneider, Comment, Illiberal Construction of Pro
Se Pleadings, 159 U. P. L. R. 585, 610 (2011).
109 Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949
(2009) (holding the allegations of facts which create thepossibility of misconduct is not enough, but rather the pleadings
must allege facts which are plausible).
110 See generally Haines v. Kerner, 404 U.S. 519 (1972).
111 F. R. C. P. 12(b)(6) (creating a defense against aplaintiff’s claims if the pleadings fail to state a claim upon which
relief can be granted).
112 Roy K. Schneider, Comment, Illiberal Construction of Pro
Se Pleadings, 159 U. P. L. R. 585, 617-18 (2011).
113 Jessica Case, Note, Pro Se Litigants at the Summary Judgment
Stage: Is Ignorance of the Law an Excuse?, 90 K. L. J. 701, 708(2002).
114 Roy K. Schneider, Comment, Illiberal Construction of Pro
Se Pleadings, 159 U. P. L. R. 585, 613 (2011).
115 Jessica Case, Note, Pro Se Litigants at the Summary Judgment
Stage: Is Ignorance of the Law an Excuse?, 90 K. L. J. 701, 702(2002).
116 Roy K. Schneider, Comment, Illiberal Construction of Pro
Se Pleadings, 159 U. P. L. R. 585, 592 (2011).
117 In-Depth: Leveling the Playing Field: Help for SelfFilers, T T B (Admin. Off. U.S. Cts., D.C.),
Jul. 2011, at 1, available at http://www.uscourts.gov/news/
TheThirdBranch/11-07-01/IN-DEPTH_Leveling_the_
Playing_Field_Help_for_Self-Filers.aspx (last visited Oct. 24,2011).
118 F. T C’., Debt Collection FAQs: A Guide forConsumers, at 4 (2009), available at http://www.ftc.gov/bcp/edu/
pubs/consumer/credit/cre18.pdf (last visited Oct. 12, 2011).
119 Matthew W. Ludwig, Abuse, Harassment, and Deception:
How the FDCPA is Failing America’s Elderly Debtors, 16 E L.
J. 135, 162 (2008).
120 Steven Plitt and Joshua D. Rogers, Charting a Course
Journal of Consumer & Commercial Law

for Federal Removal Through the Abstention Doctrine: A Titanic
Experience in the Sargasso Sea of Jurisdictional Manipulation, 56
DP L. R. 107, 107 (2006).
121 Matthew W. Ludwig, Abuse, Harassment, and Deception:
How the FDCPA is Failing America’s Elderly Debtors, 16 E L.
J. 135, 162 (2008).
122 28 U.S.C. § 1331 (2010) (creating federal question
jurisdiction for federal courts).
123 Steven Plitt and Joshua D. Rogers, Charting a Course
for Federal Removal Through the Abstention Doctrine: A Titanic
Experience in the Sargasso Sea of Jurisdictional Manipulation, 56
DP L. R. 107, 107-8 (2006).
124 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
723 (2006).
125 Lauren Goldberg, Note, Dealing in Debt: The High-Stakes
World of Debt Collection After FDCPA, 79 S. C. L. R. 711,
724 (2006).
126 28 U.S.C. §1332(a) (creating diversity jurisdiction forfederal courts).
127 Steven Plitt and Joshua D. Rogers, Charting a Course
for Federal Removal Through the Abstention Doctrine: A Titanic
Experience in the Sargasso Sea of Jurisdictional Manipulation, 56
DP L. R. 107, 108 (2006).
128 T. F. C A. § 392.102 (authorizing a plaintiff tosue both the third party debt collector and the surety).
129 Tex. Fin. Code Ann. § 392.306 (imposing liability on acreditor who has actual knowledge that the debt collector it hires
regularly violates the TDCA).
130 John Tavormina, Comment, The Fair Debt Collection
Practices Act: The Consumer’s Answer to Abusive Collection Practices,
52 T. L. R. 584, 587(1978).
131 Matthew W. Ludwig, Abuse, Harassment, and Deception:
How the FDCPA is Failing America’s Elderly Debtors, 16 E L.
J. 135, 137 (2008).
132 See Matthew W. Ludwig, Abuse, Harassment, and Deception:
How the FDCPA is Failing America’s Elderly Debtors, 16 E L.
J. 135, 147-48 (2008) (noting credit card debt increased by 89%
from 1992 to 2011).
133 Boe W. Martin, A Creditor’s Liability for Unreasonable
Collection Efforts: The Evolution of a Tort in Texas, 9 S. T. L. J.
127, 129 (1967).
134 Duty v. Gen. Fin. Co., 273 S.W.2d 64, 66 (Tex. 1954).

33