Fair Debt Collection: 14.10.1.3 Scope of collection activities
Section 6306 defines a “qualified tax collection contract” as a contract under which PCAs perform a very limited set of activities:
Section 6306 defines a “qualified tax collection contract” as a contract under which PCAs perform a very limited set of activities:
The IRS had previously conducted two pilot programs that placed federal tax debts with PCAs, in 1996–1997 and in 2006–2009.
Any contract between the IRS and a PCA must prohibit the PCA from committing any act or omission that IRS employees are prohibited from committing in the performance of similar duties.586 These prohibitions include communicating at inconvenient times and places; contacting represented debtors (with certain exceptions); calling the debtor at work if the PCA knows the debtor’s employer prohibits such calls; and various other types of harassment and abuse.587
The Internal Revenue Code (IRC) includes a civil remedy against a debt collector who recklessly, intentionally, or negligently disregards any provision of the tax code or any regulation under it.599 The taxpayer has the right to bring suit in federal court for “actual, direct economic damages,” with a cap of $1,000,000 ($100,000 in the case of negligence), plus costs.600 Unlike suits when the misdeeds are committed by IRS employees, the plaintiff need not exhaust administrative remedies.
Debt collection misconduct may violate a number of federal postal laws.
A section of the Postal Reorganization Act (PRA)16 prohibits billing or dunning for unordered, mailed merchandise (unless mailed by a charitable organization soliciting contributions). It provides that the recipient of unordered, mailed merchandise has a right to treat it as a gift.
The federal Communications Decency Act28 prohibits the following actions in interstate or foreign communications:
The Telephone Consumer Protection Act of 1991 (TCPA)37 amended the Federal Communications Act of 1934. It added a section to protect consumers from invasions of privacy such as automated and prerecorded telephone calls, junk faxes, and telemarketing calls.38 Since the TCPA has attractive remedies,39 it can be of significant benefit to debtors to the extent it applies to debt collection.
As noted above, the TCPA prohibits the use of any automatic telephone dialing system or artificial or prerecorded voice message in a call to a cell phone, pager, or the like, or when the called party is charged for the call, unless the called party has given prior express consent to be called.54 The phrases “cellular telephone service” and “any service for which the called party is charged for the call” are alternative; it is not necessary that the cellular consumer be charged for the call.
Whether a showing of harm or damage is an element of a common law tort is not only important for practitioners asserting these claims, but is also highly relevant to the question whether consumers have standing to assert claims under the FDCPA and other consumer law statutes in federal court. Accordingly, in its discussion of individual tort claims this chapter pays particular attention to whether they impose a requirement to show actual damage.
A false arrest or false imprisonment claim may be viable if a creditor or collector wrongfully restricts the debtor’s freedom of motion in some way483 or causes the debtor to be arrested.484 The elements of false imprisonment are an act intended to confine the plaintiff, which results directly or indirectly in confinement, and that plaintiff is aware of the confinement or is injured by it.
The TCPA prohibits the use of an “automated telephone dialing system” to call a cell phone without prior express consent.64 It defines this term as “equipment that has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator, and (B) to dial such numbers.”65
The TCPA prohibits calls to cell phones and other sensitive numbers without the called party’s consent if the call uses an artificial or prerecorded voice.71 In most cases, the meaning of “artificial or prerecorded voice” should be clear.
The statute includes two exceptions to the prohibition against autodialed or artificial/prerecorded voice calls to cell phones: calls made for emergency purposes and calls made with the prior express consent of the called party.86 A former exception for calls to collect government debt was struck down by the Supreme Court in 2020 as an unconstitutional content-based restriction on speech.87
The prohibition of autodialed or prerecorded voice calls to cell phones does not apply where the called party has provided “prior express consent.”90
The TCPA provides for substantial recoveries in cases in which a debt collector harasses a “wrong party” with automated calls to a cell phone. Such a non-debtor has standing to bring a TCPA claim.106 As a result, it is important to determine exactly who provided consent for the calls.
Many courts have held that consent may be revoked at any time, in any reasonable way.122 A 2015 FCC ruling reiterates this point specifically:
[C]onsumers may revoke consent in any manner that clearly expresses a desire not to receive further messages, and . . . callers may not infringe on that ability by designating an exclusive means to revoke.
The FCC’s 2015 declaratory ruling, upheld by the D.C. Circuit,126 makes clear that any statement in which “the called party clearly express[es] his or her desire not to receive further calls” is sufficient to show revocation.127 To assess whether any particular means of revocation used by a consumer is reasonable, the FCC stated that it would:
Recently, creditors have begun inserting provisions in form agreements purporting to authorize the use of automated equipment to contact consumers at any number furnished by the consumer or otherwise obtained by the creditor.
A 2017 Eleventh Circuit decision holds that, just as a consumer can provide limited consent to receive robocalls, a consumer can also revoke consent partially.156 In the case before it, the consumer had attempted to revoke consent to receive debt collection calls during her working hours. The court held that she had the right to do so and remanded for a jury determination of whether her instructions to the creditor were clear enough.
The TCPA prohibits placing a call that uses an artificial or prerecorded voice to a residential telephone line.157 What constitutes a prerecorded or artificial voice call is discussed in § 14.3.2.4, supra.
Among other things, this guidance informs furnishers, including debt collectors, that the CFPB, “intends to look carefully at the accuracy and dispute-handling practices of furnishers providing rental information to [consumer reporting agencies (CRAs)].” It also notes that “[e]victing tenants in violation of the CDC Order, State, or local moratoria, or evicting or threatening to evict them without apprising them of their legal rights under such moratoria, may violate prohibitions against deceptive and unfair practices under the Fair Debt Collection Practices Act a
The Consumer Financial Protection Bureau has now, effective November 30, 2021, enacted Regulation F, interpreting the FDCPA.1 The Regulation is reproduced at Appx. B.1.2, infra. While certain regulation provisions track the statutory language, other provisions and the Regulation’s Official Interpretations provide new FDCPA interpretations.
The FDCPA does not specifically address electronic communication, and issues arise as to how FDCPA provisions apply to electronic communications between debt collectors and consumers. Regulation F clarifies that, in the definition of “communication,” “any medium” includes email, text message, social media, or other electronic media.2