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Fair Debt Collection: 7.1 Introduction

This chapter discusses the specific requirements the Fair Debt Collection Practices Act (FDCPA) imposes on debt collectors under section 1692e—including section 1692e’s general prohibition of false, deceptive, or misleading representations, as well as the sixteen enumerated protections that proscribe a broad range of deceptive debt collector misconduct. Section 1692e may contain the most litigated provisions of the FDCPA. The chapter also considers Regulation F1 (effective November 30, 2021) provisions related to FDCPA § 1692e.

Fair Debt Collection: 7.2.2.1 Generally

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

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(2) The false representation of—

(A) the character, amount, or legal status of any debt; or22

Fair Debt Collection: 7.2.2.2 Strict Liability

A common debt collector claim is that its FDCPA § 1692e(2) violation was unintentional, that the collector was relying on the creditor’s information, or otherwise simply made a mistake. But, unless the bona fide error defense applies,31 a collector is strictly liable for misstating the amount of a debt, even if that is unintentional.32 This is in keeping with the general notion that the FDCPA is a strict liability statute.33

Fair Debt Collection: 7.2.2.4 Misrepresentations as to the Total Amount Due

Regulation F (effective November 30, 2021) provides detailed regulations about the amount and itemization of debts that must be provided to consumers as part of the validation information.59 When considering a FDCPA § 1692e(2) claim based on misrepresentations as to the total amount due, plaintiffs should consider whether the collector complied with these regulations in the validation notice or mirrored these required disclosures or model language60 in other communications.

Fair Debt Collection: 7.2.2.5 Misrepresentations as to Interest Charges

Regulation F (effective November 30, 2021) provides detailed regulations about the amount and itemization of debts that must be provided to consumers as part of the validation information.83 When considering a FDCPA § 1692e(2) claim based on misrepresentations as to interest charges, plaintiffs should consider whether the collector complied with these regulations in the validation notice or mirrored these required disclosures or model language84 in other communications.

Fair Debt Collection: 7.2.2.6.1 Misrepresentations in validation notices

Regulation F (effective November 30, 2021) provides detailed regulations about the amount and itemization of debts that must be provided to consumers as part of the validation information.102 When considering a FDCPA § 1692e(2)(A) claim based on misrepresentations as to accruing interest and fees in a validation notice, plaintiffs should consider whether the collector complied with these regulations or adopted the language and layout of the model

Fair Debt Collection: 7.2.2.6.2 Misrepresentations in subsequent communications

Regulation F does not address itemization or dynamic balance disclosures in communications other than validation notices. Thus, when considering a FDCPA § 1692e(2)(A) claim based on false or misleading representations as to accruing interest and fees in a subsequent communication after the validation notice, one must consider the case law in the relevant jurisdiction.

Fair Debt Collection: 7.2.2.8 Attorney Fees and Court Costs

False representations related to attorney fees are actionable not only under FDCPA § 1692e(2)(A) concerning the debt amount, but also under FDCPA § 1692e(2)(B) concerning “compensation which may be lawfully received by any debt collector for the collection of a debt.” 145 Misrepresentation as to attorney fees can also violate FDCPA §§ 1692e and 1692e(10).

Fair Debt Collection: 7.2.2.9 Penalties and Charges for Dishonored Checks

In consumer transactions, the dollar amount of an insufficient funds check is likely to be small, making it impractical to expend significant resources collecting such bad check amounts. In response, collectors may threaten penalties under state bad check laws in the hope that such threats in a letter will result in payment. Collectors may also attempt to increase their recoveries by seeking to collect additional amounts that may or may not be allowed under state law and the contract.

Fair Debt Collection: 7.2.2.10 Misrepresentation of Collector Services

FDCPA § 1692e(2)(B) prohibits a collector’s false representations to the consumer as to the extent of collection services it is authorized to perform. Where a debt collector’s contract with a creditor is limited to mailing a series of dunning letters (called “flat-rate” collecting), it can be deceptive to represent to a consumer that it will take additional collection actions.182

Fair Debt Collection: 7.2.3.1 Generally

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

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Fair Debt Collection: 7.2.3.2 Non-Attorneys Impersonating Attorneys

FDCPA § 1692e(3) prohibits a debt collector from even indirectly impersonating an attorney.208 Non-attorney collection agencies can violate FDCPA § 1692e(3) by using a name that implies they are attorneys, such as “Lawyers Collection Services,”209 or by creating a fake law firm website.210 It can also be a FDCPA § 1692e(3) violation where a non-attorney collection agency’s phone calls have a caller ID of “law office.”

Fair Debt Collection: 7.2.3.3.1 Introduction

With the possible exception where the attorney clearly discloses it has not reviewed the consumer’s account,222 FDCPA § 1692e(3) is violated where a collection letter is on an attorney’s letterhead or is signed by an attorney, but the attorney has not meaningfully reviewed the account.

Fair Debt Collection: 7.2.3.3.2 Does a letter indicate it is from an attorney?

Not every form letter suggests it is from an attorney, and lawyers may defend a FDCPA § 1692e(3) claim by arguing that the letter does not indicate it is from an attorney. This argument will not get the collector far if there is the mention of “attorney,” “law offices,” “law firm” or the like on the letterhead, in the signature block, or in the address where payment should be made.242

Fair Debt Collection: 7.2.3.3.4 Creditor liability for letters on attorney letterhead

FDCPA § 1692a(6) provides that the FDCPA applies to a creditor that uses a name other than its own, so as to indicate that a third person is collecting or attempting to collect the debt owed the creditor.257 Where in fact the creditor sends out a collection letter that is on law firm letterhead, does the FDCPA then apply to the creditor and has the creditor violated section 1692e(3)?

Consumer Bankruptcy Law and Practice: 3.2.3 Proper Venue for Bankruptcy Case

Under 28 U.S.C. § 1408, a debtor may commence a bankruptcy case in any federal judicial district in which the domicile, residence, principal place of business, or principal assets of the debtor have been located for 180 days prior to the petition, or for a longer portion of that 180 days than any other district.

Consumer Bankruptcy Law and Practice: 3.5.2 Liquidation of Nonexempt Property; “Carve-Out” Agreements

If the estate has more than nominal assets, they must be turned over to the trustee at or after the creditors meeting.151 Usually, the debtor is offered the option of paying their value to the trustee instead.152 If the trustee declines to abandon property, it ordinarily becomes the trustee’s responsibility to pay costs of maintaining the property and insuring it.153 The trustee then collects any other property of the estate that is neither exempt