FDCPA liability: legal status

Discussion in 'Credit Talk' started by Pat, Oct 27, 2000.

  1. Pat

    Pat Guest

    A debt is a legal obligation to pay a sum of money to another party. Once the SOL on a debt expires, the debt is no longer collectable.
    I would make the argument that if a collection agency represents an outdated sum of money previously owed as a debt which may be collected, then the collection agency has violated the FDCPA as follows:

    § 807. False or misleading representations [15 USC 1962e]

    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:

    (1) The false representation or implication that the debt collector is vouched for,
    bonded by, or affiliated with the United States or any State, including the use of
    any badge, uniform, or facsimile thereof.

    (2) The false representation of --

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

    One legal theory of liability under the FDCPA which one could apply is that a collection agency which represents an outdated sum of money owed as a legally owed debt has misrepresented the legal status of the debt...

    I will not address the defenses available under the FDCPA at this time.

    The point is that in the previous post I made, re the FDCPA and an outdated obligation, I was basing my theory of liability on the above and the proposed amount demanded on the uncertain nature of "actual damages" for emotional distress and the like.

    Everyone should feel free to disagree, but there is at least a legitimate theory of liability which can be argued.
  2. Mo

    Mo Guest

    RE: FDCPA liability: legal st

    (Disclaimer -I'm not a lawyer) As with most statutes, they can always fall victim to the most persuasive (usually sleasziest or most corrupt) arguement. Judges and lawyers literally make their living on the arguing of what any given statute means.

    To pick a very small nit, I beleive that a debt is *collectable* after the SOL expires, but is not *enforceable*. If I have that right, it is a technical point for a court, While they could continue to to try to collect after the SOL (letters, phone calls), one could then invoke the cease & desist right provided for by the FCRA (FDCPA). This would then give them no practical avenue to collect the debt. They couldn't recoup by suing, and they couldn't "extort" the debtor into paying (IF the 7 year CRA reporting period has expired) with leveraging the old "we can wreck your credit rating" threat.
  3. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    A Debt Is Collectable After SO

    While I do appreciate your theory, itâ??s a dog that donâ??t hunt! [:) A debt â??ISâ? collectable after the expiration of the appropriate SOL, no ifs ands or buts about it. The thing that would be a violation of FDCPA is a threat to sue, when the collector could not hope to prevail by litigation â?? as in the case of a stale SOL.

    As far as basing a cause of action on emotional distress, in relation to FDCPA..? While this is certainly possible, Pat, itâ??s a tough nut to crack. Sure the rule of least sophistication has a bit to do with your argument, however, that premise stems more toward grasp of substance than legal effect per se. Further more, I donâ??t know of any lawyer worth his/her stuff that would base a claim on emotional distress (intentional or negligent), without some tact to allow prove up. Again, this is a tough nut to substantiate in any situation.

    Now without meaning to come off like a braggart, I deal with collection litigation each and every day! I can tell you from having dealt with a variety of cases, that few (very few) are successful at alleging the tort in conjunction with FDCPA. Why? Itâ??s so darn hard to prove and very easy to defend against, if a defendant (collection agent) so desires â?? if it were to push the issue in hopes of winning by attrition.

    Truly your theory is possible but not generally practical if a case goes the distance. Sure one could â??ALLEGEâ? a tort in conjunction with FDCPA, but if push comes to shove (and it does more often than you may think) proving the allegation is another matter.

    Having stated all this, if oneâ??s intent is to use this theory as leverage? Well that is another matter altogether because as you know a complaint could be amended, possibly dropping the tort allegation if the fight continues to trial. Now if this is what you were alluding to in your prior posts, then yeah, in this context your theory could be considered a viable option â?? albeit a heady/risky one.

    Keep The Faith,
    Anthony Villaseñor
  4. Pat

    Pat Guest

    RE: A Debt Is Collectable Afte

    The least sophisticated consumer doctrine doesn't have any relation to actual emotional distress as a result of violation of the FDCPA. It is most often employed by a court to determine whether the notification of the right of 30 days to dispute the debt was clear and understandable.

    The most common case in which the standard is employed is when a collection agency sends the standard bill with the required notice of 30 days to dispute, and 10 days later sends the debtor a notice saying that if he doesn't pay at once, they will ruin his credit record. The second message is considered to confuse the least sophisticated consumer of his rights.

    In terms of emotional damages as actual damages under the FDCPA, one does not need to apply the tort theory of intentional infliction of emotional distress. In issues of proving emotional distress sufficient to be actionable under a statute, the general standard is that the distress must to be so severe that the plaintiff sought medical care. The amount of actual distress that must be proved becomes less as the outrageousness of the defendant's behavior becomes greater.
  5. Pat

    Pat Guest

    emotional distress and the FCR

    no case law for the FDCPA. The FCRA case law is clear.

    The term "actual damages" has been interpreted to include recovery for emotional distress and humiliation.
    See Johnson v. Department of Treasury, I.R.S., 700 F.2d 971, 984 (5th Cir. 1983) (mental anguish included as
    an element of recovery in FCRA claims); Thompson v. San Antonio Retail Merchants Ass'n, 682 F.2d 509, 514
    (5th Cir. 1982); [**7] Millstone v. O'Hanlon Reports, Inc., 528 F.2d 829, 834-35 (8th Cir. 1976); Bryant v.
    TRW, Inc., 487 F. Supp. 1234, 1240 (E.D. Mich. 1980), aff'd, 636 F.2d 1221 (7th Cir. 1980); Jones v. Credit
    Bureau of Huntington, Inc., 184 W. Va. 112, 117, 399 S.E.2d 694 (1990). Moreover, no case has held that a
    denial of credit is a prerequisite to recovery under the FCRA.
  6. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    I Respectfully Disagree

    Well there is theory and real-world applicationâ?¦ Itâ??s certainly clear which youâ??re basing your â??assumptionsâ? on. <wink> But hay, everyone is certainly entitle to an opinion.

    Keep The Faith,
    Anthony Villaseñor
  7. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    Good Points, Butâ?¦

    Way to go, Pat. How good of you to go through all the trouble of providing those cites. Only trouble is in context with this thread its clear the discussion, by your own hand, deals with FDCPA not FCRA. Or perhaps I missed something?

    Keep The Faith,
    Anthony Villaseñor
  8. Pat

    Pat Guest

    RE: Good Points, Butâ?¦

    no Anthony, the fact that no FDCPA Appeals Court precedent exists suggests that no US District Courts have tossed out any claims for emotional distress in FDCPA actions. District Courts have allowed the claims, and left it for the trier of fact to decide damages.

    I haven't looked into actual jury awards for emotional distress for violations under the FDCPA.

    The real world fact is that an error in one's credit report leading to denial of credit, employment, or insurance (and thus bringing about an FCRA cause of action if not remedied) is a lot more unsettling than a bill collector violating a technicality of the FDCPA.

    The worst thing about the FDCPA is that, generally, it DOES NOT apply to original creditors. (unless they use the name of a third party).
  9. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    Ahhhh, Think I Get It

    I believe now Iâ??m beginning to understand where youâ??re coming from with this. And if Iâ??m correct, your premise does make a bit more sense now. Albeit from a personal standpoint, Iâ??d never allege emotional distress under FDCPA unless leverage tactics were behind such reasoning â?? like settlement.

    Truly thatâ??s a possible reason why you canâ??t find appellate rulings concerning FDCPA, because most collection agents (the smart ones anyway) settle cases out rather than contend. Nonetheless, I think next time Iâ??m doing research Iâ??ll look in COA for any FDCPA references and let you know if I find any. Just seems like there must be some case law regarding the subject, but I could be wrong. ;)

    Keep The Faith,
    Anthony Villaseñor

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