Source: http://www.nmhc.org/ThirdPartyGuidance.cfm?ItemNumber=58089
Timestamp: 2013-05-24 03:08:12
Document Index: 97334446

Matched Legal Cases: ['§ 1', '§ 1692', '§ 1692', '§ 1692', '§ 1692', '§ 1692']

FTC Advisory Opinion on Collection Activities under the FDCPA - - NMHC - National Multi Housing Council
FTC Advisory Opinion on Collection Activities under the FDCPA
This is in response to the American Collectors Association's ("ACA's") request for two Commission advisory opinions ("Request") regarding the Fair Debt Collection Practices Act ("FDCPA"), which the association submitted pursuant to Sections 1.1 - 1.4 of the Commission's Rules of Practice, 16 C.F.R. §§ 1.1 - 1.4. The two issues will be addressed in the order in which they were presented.
The Commission has voiced this opinion in recent annual reports to Congress mandated by the FDCPA. As the Commission stated in the 1999 report, for example, "Nothing within the language of the statute indicates that Congress intended an absolute bar to any appropriate collection activity or legal action within the thirty-day period where the consumer has not disputed the debt." Letter from Chairman Robert Pitofsky to the Honorable Albert Gore, Jr. regarding Twenty-First Annual Report to Congress Pursuant to Section 815(a) of the Fair Debt Collection Practices Act, at 10 (Mar. 19, 1999) ("1999 Annual Report"). Because there appears to be some confusion regarding whether the thirty-day period is a dispute period or a grace period, the Commission has recommended in recent annual reports that Congress clarify the FDCPA by adding a provision expressly permitting appropriate collection activity within the thirty-day period, if the debt collector has not received a letter from the consumer disputing the debt. The Commission emphasized that the clarification should include a caveat that the collection activity should not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt specified. (1999 Annual Report at 10-11.(2))
In responding to this issue, the Commission notes first that Section 809(a) of the FDCPA, 15 U.S.C. § 1692g(a), provides:
a statement that if the consumer notifies the debt collector in writing within thethirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
Section 803(2) of the FDCPA, 15 U.S.C. § 1692a(2), defines the term "communication" as "the conveying of information regarding a debt directly or indirectly to any person through any medium." In its Staff Commentary, Commission staff stated that the term "communication" "does not include formal legal action (e.g., filing of a lawsuit or other petition/pleadings with a court; service of a complaint or other legal papers in connection with a lawsuit, or activities directly related to such service)." 53 Fed. Reg. at 50101, comment 803(2)-2. Similarly, in the introductory portion of the Staff Commentary, Commission staff opined that "[a]ttorneys or law firms that engage in traditional debt collection activities (sending dunning letters, making collection calls to consumers) are covered by the FDCPA, but those whose practice is limited to legal activities are not covered."(3) Id. at 50,100.
Seven years after the Staff Commentary was issued, the United States Supreme Court held that the FDCPA's definition of "debt collector," Section 803(6), 15 U.S.C. § 1692a(6), "applies to attorneys who 'regularly' engage in consumer-debt-collection activity, even when that activity consists of litigation." Heintz v. Jenkins, 514 U.S. 291, 299 (1995). In arriving at this conclusion, the Court explicitly considered and rejected Commission staff's introductory remark regarding the coverage of litigation attorneys. Id. at 298. In light of Heintz, the Commission concludes that, if an attorney debt collector serves on a consumer a court document "conveying [] information regarding a debt," that court document is a "communication" for purposes of the FDCPA.(4)
Second, there is no conflict preemption based on state law standing as an obstacle to the full accomplishment and execution of Congressional purposes and objectives. As Congress declared in Section 802(e) of the FDCPA, 15 U.S.C. § 1692(e), the purpose of the panoply of protections under the federal debt collection statute is:
1. Section 809(b), 15 U.S.C. § 1692g(b), provides:
FTC's FDCPA Web Site