Does anyone think the same arguments would apply to the previously discussed library fines -- not an extension of credit? http://www.greensheet.com/PriorIssues-/970701-/970701-3.html Hiding Behind Regional FDCPA NSF Rules (FDCPA: Does it have anything to do with checks?) As many of you who've been keeping your finger on the pulse of the financial services industry know, there is some debate about the Fair Debt Collection Practices Act (FDCPA) and whether or not it applies to the collection of checks returned NSF. The main debate is whether or not a check is an extension of credit. Since May of last year, there have been 10 major cases which address this issue. In all but three, it was found that FDCPA does not apply to NSF checks because checks are not an extension of credit. The dominant cases in this arena are Zimmerman v HBO Affiliate Group and Bass v Stopler, Koritzinsky, et al. In the Zimmerman case (1987), the judge ruled that the "FDCPA does not pertain to this action because acceptance of a check in payment for consumer goods does not constitute the extension of credit contemplated by the FDCPA." In the Koritzinsky case (1996), a Wisconsin judge found NSF checks to be "an extension of credit and qualify as debt collection of which is governed by the FDCPA." A variety of cases have followed both these decisions. Below are some highlights: Charles v CheckRite, LTD In May of 1996, an Arizona Federal judge dismissed an FDCPA action against a debt collector citing Zimmerman and stating that the collection efforts aimed at recovering NSF checks are not governed by the FDCPA and are not debts. Cedarstand v Landerg In June, 1996 a Minnesota case also cited Zimmerman and found that the plaintiff failed to allege that the defendant's collection efforts were an attempt to collect a debt and failed to prove that the check was for personal or household purposes, as is contained in the definition of "debt." Draper v CRA Security Systems An Arizona judge dismissed a compliant in an FDCPA case, citing Zimmerman. Sarver v Capital Recovery Associates, Inc. In Pennsylvania in November, 1996 Zimmerman was again cited and it was found that the payee had not extended an opportunity to defer payment on the check and therefore the argument that the check was an extension of credit was not supported. Ganske v CheckRite, Ltd. In January of this year, a Wisconsin judge found more persuasive and controlling the line of cases that conclude that an NSF check is a debt within the meaning of the FDCPA, similar to Kloritzinsky. Quaderer v Landberg, Duffy v Landberg, & Hacken v Landberg Also in January, Zimmerman was cited and it was ruled that FDCPA does not apply because the collection activity of NSF checks did not arise from a transaction involving an offer or extension of credit to a consumer. Snow v Riddle, Dean v Riddle Most interesting, are two cases within weeks of each other with the same defendant yet with different outcomes. In Utah, in Snow v Jesse L. Riddle, Zimmerman was cited and it was ruled that an NSF check is not a FDCPA covered debt. In Louisiana, in Dean v Jesse L. Riddle, the judge ignored the cases citing Zimmerman and based the decision on the Louisiana law that defines "transaction." What does all this prove? Well, it seems the jury is still out when it comes to FDCPA and NSF checks, but with these many differing views of the issue, it is highly likely that the matter will need to be decided by the Supreme Court in the near future. In the meantime, we will continue to see hyper-technical lawsuits by debtor attorneys attempting to get their clients out of having to pay by alleging improper "credit" collection practices when their clients are simply looking for ways to get out of paying for the goods or services received.
I did some more digging, Bad checks are debts under the FDCPA. Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir. 1997); Charles v. Lundgren & Associates, P.C., 119 F.3d 739 (9th Cir. 1997). Still can't find anything for the library.
