Opinion ID: 897648
Heading Depth: 2
Heading Rank: 3

Heading: Violation of the FDCPA

Text: [¶ 29] The DFI contends CybrCollect is violating 15 U.S.C. 1692c(b), the Federal Fair Debt Collection Practices Act. Consequently, according to the DFI, CybrCollect is in violation of N.D. Admin. Code § 13-04-02-04(6), which states debt collectors may not [v]iolate sections 804 through 810 of the Federal Fair Debt Collection Practices Act. The FDCPA states: (b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector. 15 U.S.C. 1692c(b). [¶ 30] Under North Dakota law, an administrative hearing may not be held unless the parties have been served with a written specification of issues for hearing or other document indicating the issues to be considered and determined at the hearing. N.D.C.C. § 28-32-21(3)(c). In the Notice of Hearing and Specification of Issues provided to CybrCollect, the issues were: Whether CybrCollect has engaged in acts, practices, or transactions in violation of N.D.C.C. ch. 13-05 such that the Commissioner may impose a cease and desist order against CybrCollect under the provisions of N.D.C.C. ch. 13-05, and whether such acts, practices, or transactions require further relief beyond the imposition of a cease and desist order. These were the issues CybrCollect received notice of and the issues before the ALJ. [¶ 31] In a letter dated July 29, 2003, the DFI commissioner requested that CybrCollect brief two additional issues related to the FDCPA: (1) whether CybrCollect's contact with the check writer's financial institution inquiring whether sufficient funds were available to re-present the NSF check is a communication with third parties, which is prohibited by 15 U.S.C. § 1692c(b); and, (2) whether CybrCollect's debiting of a check writer's account is a communication that necessitates CybrCollect's sending of a written notice to the debtor according to 15 U.S.C. § 1692g(a). [¶ 32] CybrCollect argues the actions of the DFI in expanding the scope of this case to include new legal theories raised after the first ALJ hearing violates the procedural requirements of the Administrative Agencies Practice Act. See N.D.C.C. ch. 28-32. Our Court has held that [d]ue process requires a participant in an administrative proceeding be given notice of the general nature of the questions to be heard, and an opportunity to prepare and to be heard on those questions. Saakian v. N.D. Workers Compensation Bureau, 1998 ND 227, ¶ 11, 587 N.W.2d 166. We have stated that notice is adequate if it fairly apprises the party of the nature of the proceedings. Id. These due process principles are embodied in N.D.C.C. § 28-32-05(3)(c), which requires a written specification of issues before an administrative hearing.... Id. Basic notions of fundamental fairness dictate a person challenging an agency action must be adequately informed in advance of the questions to be addressed at the hearing so the person can be prepared to present evidence and arguments on those questions. Id. In this case, the specification of issues was broadly stated as whether CybrCollect had engaged in acts in violation of N.D.C.C. ch. 13-05, but the record makes it clear that the alleged violation was CybrCollect's failure to obtain a written authorization from the check writer prior to electronically collecting collection fees. [¶ 33] On April 19, 2003, CybrCollect signed an agreement with the DFI that CybrCollect could only collect collection fees electronically if it verified the check writer had signed a written authorization. The agreement provided the restriction would remain in force until the DFI, district court, or Supreme Court entered a final order. The ALJ framed the issue before him as Without a written authorization from the debtor can a fee of $25.00 be collected electronically from an account? After the administrative hearing, the DFI raised an entirely new violation and asked CybrCollect to brief it. The DFI alleged a violation by CybrCollect of N.D. Admin. Code § 13-04-02-04(6) because of its violation of the Federal Fair Debt Collection Practices Act, 15 U.S.C. 1692(b), which prohibits communication by the debt collector with the debtor's bank. CybrCollect did not have any prior notice of this alleged violation and no opportunity to prepare and present evidence on the issue to the ALJ. We conclude CybrCollect did not receive adequate notice of this violation, was unfairly surprised and prejudiced. The DFI, therefore, cannot rely on this alleged violation to support its cease and desist order and decision in this case.