FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal...

60
FDCPA – Facts, Fiction & Reality

Transcript of FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal...

Page 1: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

FDCPA – Facts, Fiction & Reality

Page 2: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Legal Disclaimer

This information is not to be intended as legal advice and may not be used as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to assure that this information is up-to-date as of the date of publication. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel.

Page 3: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Introduction

Sherri L. Andrew

Mark Giddings

Page 4: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Agenda

• Welcome

• Overview of the FDCPA

• Third Party Communications

• Communicating with Consumers

• Deceptive Acts and Practices

• Wrap Up & Close

1

2

3

4

5

6

Page 5: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Overview of the FDCPA

• The purpose of the FDCPA

• The benefits of the FDCPA

• Who must comply with the FDCPA

• Whom the FDCPA protects

Discussion points:

Page 6: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) became federal law in March 1978.

The FDCPA is part of the Consumer Credit Protection Act that also includes:

•Truth in Lending Act•Equal Credit Opportunity Act•Fair Credit Reporting Act

Page 7: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Purpose & Benefits

• Protects consumers

• Benefits ethical collectors

• Sets a professional standard

• Fosters a fair and competitive environment

Page 8: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Who is a Consumer?

Consumers include any natural person who is obligated or allegedly obligated to pay any debt.

Page 9: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Who Must Comply?

• Third-Party Debt Collectors

• Debt Purchasers

• Attorneys

• Creditors in limited circumstances

Page 10: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

What is Debt?

• Any obligation or alleged obligation of a consumer arising out of a transaction primarily for personal, family or household purposes

Page 11: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Summary of Overview of the FDCPA

We have discussed the following topics:

The purpose of the FDCPA

The benefits of the FDCPA

Who must comply with the FDCPA

Who the FDCPA protects

Page 12: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Questions

Page 13: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Third Party Communications

• Identify who is considered a third party for purposes of communication under the FDCPA

• Identify what information you can and cannot seek when obtaining location information

Page 14: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Who May Be Contacted

• Consumer and consumer’s attorney

• Creditor and creditor’s attorney• Minor consumer’s parents• Consumer’s spouse (if permitted by state law)

• Consumer reporting agency• Debt collector’s attorney

Debt collectors can contact the following people when collecting a debt from a consumer:

Page 15: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Contacting the Consumer’s Attorney

If an attorney represents the consumer in regards to a debt which the consumer is collecting, the collector may only communicate with the attorney.

Page 16: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Skiptracing: Obtaining Location Information

• Identify yourself by name only

• State that you are trying to locate the consumer

• Request only home address, home phone number and place of employment

• Contact a third party only once

Page 17: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Third Party Communication Restrictions

DO NOT:

•Reveal the existence of a debt to any party

•Use symbols or language in written communication

•Use postcards

Page 18: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Employment Verification

You CAN:• Call the employer and request the company verify whether the consumer is currently employed by the company

You CANNOT:• Request the consumer’s work phone number, supervisor’s name, dates of employment, salary amount, dates of pay or any other information

Page 19: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Summary of Third Party Communications

We have discussed the following topics:

Third party definition for purposes of communication

Information you can and cannot seek when obtaining location information

Page 20: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Questions

Page 21: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Communicating with Consumers

• Requirements for written and oral communications with consumers

• How to handle to cease communication requests

• How to respond to disputes

Page 22: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Communication Defined

Communication is conveying information directly or indirectly to any person through any medium regarding a debt.

Page 23: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Communication is prohibited:

• At a time that is known to be inconvenient to the consumer

• Before 8:00 a.m. or after 9:00 p.m. local time at the consumer’s location

• If the consumer is represented by an attorney

• If it is known or reasonably understood that the consumer’s employer would prohibit it

Communication Restrictions

Page 24: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Discussion Questions

Page 25: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Mini-Miranda Disclosure

“This is an attempt by a debt collector to collect a debt.

Any information obtained will be used for that purpose.”

Page 26: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Mini-Miranda Disclosure

• Recite the mini-Miranda in the first written and first verbal communication with a consumer.

• All communications with consumers must indicate the communication is from a debt collector.

• Some state laws require the mini-Miranda in all communications with consumers.

Page 27: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Validation Notice

• Required disclosure provided to the consumer

• Informs consumer of their right to request verification of the debt

• Should be in writing

• Is required each time a subsequent agency takes over an account

Page 28: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Validation Notice

Validation notice must include the following information:

1. Amount of the debt2. Name of the creditor to whom the debt is owed3. Statement that the consumer has thirty days to

dispute debt or the debt is assumed valid4. Statement that if the consumer disputes debt in

writing within 30 days, debt collector will provide verification

5. Statement that the debt collector will provide the consumer name and address of original creditor if requested by the consumer in writing within 30 days

Page 29: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

A Validation Notice Should Include:

Mini-Miranda disclosure

(if it is the first time you are communicating with the consumer)

“See Reverse Side for Important Information”

(If the Validation Notice is printed on

the reverse side of the letter)

Page 30: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

• Demand immediate payment

• Be inconsistent so as to cause confusion

• Be printed in a smaller or lighter colored font

• Be buried in other text

Overshadowing

The validation notice should not:

Page 31: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Discussion Questions

Page 32: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Settlement Offers

SETTLEMENT OFFERS CANNOT:

• Overshadow the validation period

• Use deceptive language to present the offer

A settlement offer allows the consumer to settle the debt for an amount less than the total owed.

Page 33: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Web Sites

• Applies whether the consumer visits the site or not

• Web site must include federal and state-mandated disclosures

If a collection letter references the debt collector’s Web site, the Web site must comply with the FDCPA.

Page 34: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Leaving Messages• Majority of courts held message is a communication requiring mini-Miranda disclosure

• Catch-22 in that message may be heard by third party

• Collection agency must undertake risk management analysis to determine what, if any, message should be left for consumer

Page 35: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Discussion Questions

Page 36: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Cease Communications

The consumer has the right to request the collector cease communicating with her.

•Must be in writing

•Must be sent to the debt collector and not the creditor

Page 37: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Cease Communications

The debt collector should not communicate further except to:

•Advise that the collection efforts will be terminated

•Notify the consumer the debt collector or creditor may invoke certain rights as allowed by law

•Where applicable, notify the consumer of specific remedy the collector or creditor intends to take

Page 38: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Bankruptcy and Automatic Stay

• Immediately, when a consumer files for bankruptcy, the automatic stay goes into effect.

• The stay lasts until:the consumer receives a dischargeor the court closes the caseor the case is dismissed

Page 39: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Disputes

A consumer can dispute a debt at any time during the collection process.

•Dispute can be oral or written

•If reporting the debt, debt must be reported as disputed

•Written dispute during 30-day validation period triggers verification

Page 40: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Verification

• Collection activity must cease until verification is provided.

• Verification must be mailed by the debt collector to the consumer.

The consumer has the right to request verification in writing within the 30-day validation period.

Page 41: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Verification

• Debt collector confirms in writing the amount demanded is the amount owed.

• Appropriate verification of a debt will depend on the basis for the dispute.

What is verification of a debt?

Page 42: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Verification

• Until verification is provided, the debt collector is prohibited from pursuing collection activity on that account.

• Collectors must be knowledgeable about what constitutes proper verification.

What is verification of a debt?

Page 43: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Discussion Questions

Page 44: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Legal Action

You CAN:

Debt collectors can file suit during the validation period.

You CANNOT:

Debt collectors cannot contradict the right to request verification.

Page 45: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Venue for Legal Action

Suit must be filed in one of two venues:

•Judicial district in which the consumer signed the contract that is the basis for the debt or

•Judicial district in which the consumer resides at the time suit is filed

Page 46: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Summary of Communicating with Consumers

We have discussed the following topics:

Requirements for written and oral communications with consumers

How to handle cease communication requests

How to respond to disputes

Page 47: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Questions

Page 48: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Deceptive Acts and Practices

Following this topic, you will:

• Understand what conduct is considered harassment or abuse

• Recognize what the FDCPA considers to be false or misleading representations

• Identify what practices are considered unfair or unconscionable means to collect a debt

Page 49: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Harassment and Abuse

You may not engage in any harassing, oppressive or abusive conduct in connection with

the collection of a debt.

Page 50: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Harassment or Abuse

Examples of Harassment or Abuse:

• Use or threat of violence• Use of obscene or profane language• Publicizing list of consumers

refusing to pay debts

Page 51: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Harassment or Abuse

Examples of Harassment or Abuse:

• Advertising the sale of any debt to coerce payment

• Causing a telephone to ring repeatedly with the intent to annoy the consumer

• Placement of phone calls without meaningful disclosure of the caller’s identity

Page 52: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

False and Misleading Representations

You may not use any false, deceptive or misleading representation or means in connection with the collection of any debt.

Page 53: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

False or Misleading Representations

• False representation that the collector is affiliated with U.S. or any state

• False representation of character, amount or legal status of the debt

• False representation that the collector is or communication is from an attorney

• False representation that non-payment of the debt will result in the consumer’s arrest

Examples of False or Misleading Representations:

Page 54: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

False or Misleading Representations

Examples of False or Misleading Representations:

• Threat to take action that cannot legally be or is not intended to be taken

• Communicating false credit information• Failure to include mini-Miranda in

communications• Use of business name other than true business

name• False representation that debt collector is a

consumer reporting agency

Page 55: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Unfair Practices

You may not use unfair or unconscionable means to collect or attempt to collect any debt.

Page 56: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Unfair Practices

Examples of Unfair Practices:

• Collection of any amount not authorized by agreement creating the debt or permitted by law

• Acceptance of check post-dated by more than 5 days without providing written notice of intent to deposit 3-10 business days before depositing

• Depositing post-dated check prior to date on check

Page 57: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Unfair PracticesExamples of Unfair Practices:

• Causing consumer to incur charges for communications by concealing true purpose of communication

• Communicating with a consumer regarding a debt via postcard

• Using any language or symbol, other than debt collector’s address, on any envelope when communicating with consumer via mail

Page 58: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Summary of Deceptive Acts and Practices

We have discussed the following topics:

Conduct considered harassment or abuse

False or misleading representations

Practices considered unfair or unconscionable means to collect a debt

Page 59: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

Questions

Page 60: FDCPA – Facts, Fiction & Reality. Legal Disclaimer This information is not to be intended as legal advice and may not be used as legal advice. Legal advice.

We Apprec

iate Your Time