§ 811. Legal actions by debt collectors [15 USC 1692i] (a) Any debt collector who brings any legal action on a debt against any consumer shall -- (1) in the case of an action to enforce an interest in real property securing the consumer's obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or (2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity -- (A) in which such consumer signed the contract sued upon; or (B) in which such consumer resides at the commencement of the action. (Up until this point debt collectors seem to have the right to sue) (b) Nothing in this title shall be construed to authorize the bringing of legal actions by debt collectors. To me this indicates that a debt collector has no right to sue ----------------------------------------------------------------------------------------------------------- From another FTC staff opinion letter As we understand the other portion of CSG's program, it will become the legal owner of any loan after it is 180 days in default. Unless there is some aspect of the program that gives the original creditor some rights in the accounts at that point, with the result that CSG could be said to be purchasing the accounts for the purpose of facilitating collection for "another" -- a key word in the definitions of "creditor" in § 803(4) and "debt collector" in § 803(6) -- CSG would be collecting its own obligations at that point and not covered by the FDCPA. In this case, because the debt collector bought the debt - they are then cosidered a creditor Another b]Another opinion that claims that debt collectors are creditors once they buy a debt Example C. You suggest that a servicing company may not be deemed to be a "debt collector" with respect even to those loans that are delinquent (i.e., in default) when acquired because the servicing company "does not acquire the 'debt.' " We cannot agree with this assertion. Section 803 (6) defines a "debt collector" as one who "collects or attempts to collect, directly or indirectly, debts owed ... another." I believe you have confused the notion of acquiring the debt and acquiring the right to collect. Your clients have, apparently, acquired the right to collect and they obtain (I assume) a fee or commission for doing so; in this respect they are indistinguishable from any other third-party debt collector. If the servicing company did, in fact, acquire the debt (that is, the credit obligation), it would be the creditor and exempt from the FDCPA as a creditor collecting its own debt. This letter supports that a debt collector is still liable under FDCPA regardless of their purchasing the debt. John LeFevre has asked me to respond to your recent letter requesting an informal staff opinion concerning the applicability of the Fair Debt Collection Practices Act ("the Act") to Telecheck Northwest ("Telecheck"), a check guarantee service. You ask whether Telecheck would be considered a "debt collector" under the Act in a situation where it purchases consumers' dishonored or "NSF" checks from merchants for a percentage of their face value, subsequently attempts to collect the face value of the checks, and retains all amounts collected. As you know, Section 803(6) of the Act defines a "debt collector" as (1) anyone who uses any instrumentality of interstate commerce or the mails in a business which has as its principal purpose the collection of debts., or (2) anyone who regularly collects debts owed or due another.. In the situation you describe, Telecheck may meet the first part of this definition if its principal business purpose is the collection of NSF checks. While it also "regularly" collects debts, those debts are no longer "owed or due another" since Telecheck has purchased the NSF checks and is collecting them on its own behalf. Thus, the question at issue is whether the definition of a debt collector in Section 803(6) is limited to persons who collect debts "owed or due another" in situations where the debts were initially owed to another and were in default at the time of purchase by the persons collecting them. At least one court has considered this issue and we find its reasoning persuasive.(1) In that case, the court analyzed the Act's construction, particularly its definitions of a "creditor" and a "debt collector," and the relationship between these two definitions. First, the court noted that Section 803(4) defines a "creditor" as any person who "extends credit creating a debt or to whom a debt is owed" but does not include those who "receive an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another." The court suggested that the first part of the definition defines generally "the universe of creditors" while the second part, the assignee exception, excludes from that universe "those persons who collect assigned or transferred debts that are already in default when assigned or transferred."(2) The court opined that interpreting the second part or the definition as applying only to those who collect debts for others would "render the exception superfluous and meaningless." [T]hose who collect debts for others are not in the original definitional universe, and there is therefore no need to exclude them. Rather, the excluding factors in the exception are that the debts are the result of an assignment or transfer and that the debts were already in default at the time of assignment or transfer. With the phrase "for another" at the end of the exception, Congress merely intended that the debts should have originally belonged to another."(3) The court applied a similar reasoning to the phrase "owed or due another" in the Act's definition of a debt collector. The court reasoned that the first part of Section 803(4) defines the universe of creditors as those who collect debts for themselves, and that Section 803(6)(A) then excludes these creditors from the general definition of a debt collector. It then concluded that "[t]here would be no need to exclude creditors -- those who-collect-debts' for themselves -- from the general definition of debt collector unless that general definition included those who collect debts for themselves." The court then held that the Act applies to a corporation collecting its own debts if that corporation regularly collects debts, is engaged principally in debt collection, and collects debts that were "already in default when they were assigned to the corporation."(4) Under this interpretation of the Act, which we believe is correct, Telecheck would be considered a debt collector subject to the Act's requirements. [size=]Am I the only one confused by this?????????????????[/size]
Re: Conflicting FDPCA law & opinion You aren't the only one that has ever been confused by that section and has reached the same conclusions as you have. In order to clear up the confusion in one's mind one must be mindful of the fact that in law that which is not specifically outlawed is lawful. Since the statement does not outlaw the action it is therefore lawful. All that the wording says is that the statute does not authorize that which is outlawed elsewhere in law. Yes, it is confusing but the defining fact is that the statement does not forbid anything. ----------------------------------------------------------------------------------------------------------- Any confusions or seeming contradictions in your postings were pretty well cleared up when GLBA came into full activation last year. GLBA took care of these seeming incongruencies.
Re: Conflicting FDPCA law & opinion sheesh! I had to read all that 4 times before it started sinking in. Ok, I was looking for some good, solid evidence that telecheck is governed by FDCPA. And i found it, underlined in Queens post. But, I'm also trying desperately to figure out if Sherman Acquisitions is responsible for the violations their attorneys have committed, and this info seems to pertain to that also. Now I'm more confused than ever. According to the above, when Sherman purchased the debt from sears, Sherman became the creditor (as opposed to debt collector) and now is not subject to FDCPA. HUH?? Please tell me I'm wrong!
Re: Re: Conflicting FDPCA law & opinion You are definitely wrong. There are several FTC Staff Opinion Letters which state, simply and plainly, that the OC is defined as the creditor at the time the delinquency began. Purchasing the debt does not create an OC, and all purchasers of a defaulted debt are Debt Collectors, each stepping into the shoes of the previous debt collector.
