The Search for Meaning in the Notice Requirements of the Fair Debt Collection Practices Act: A 30 for 30 Short

THE SEARCH FOR MEANING IN THE NOTICE REQUIREMENTS OF THE FAIR DEBT COLLECTION PRACTICES ACT: A 30 FOR 30 SHORT JOHNNY PARKER * Debt collectors generate more complaints to the FTC than any other industry. Although many debt collectors are careful to comply with consumer protection laws, others engage in illegal conduct. Some collectors harass and threaten consumers, demand larger payments than the law allows, refuse to verify disputed debts, and disclose debts to consumers’ employers, co-workers, family members, and friends. Debt collection abuses cause harms that financially vulnerable consumers can ill afford. Many consumers pay collectors money they do not owe and fall deeper into debt, while others suffer invasions of their privacy, job loss, and domestic instability . 1 I. INTRODUCTION The first place to look for answers to what is or is not permitted when dealing with a debt collector is the Fair Debt Collection Practices Act (FDCPA or the Act). The basic provisions of the law fall into three broadly defined categories—prohibitions, required disclosures, and civil liability. 2 Prohibited conduct includes: (1) communication with the consumer at any unusual or inconvenient time or place 3 and, with a few exceptions, communications with third parties; 4 (2) “conduct the natural consequence of which is to harass, oppress, or abuse[;]” 5 (3) the use of Copyright © 2015 , Johnny Parker. * Professor of Law, University of Tulsa College of Law; B.A., 1982, University of Mississippi; J.D., 1984, University of Mississippi College of Law; LL.M., 1986, Columbia University College of Law. 1 Debt Collection: Federal Trade Commission Protecting America’s Consumers , FTC.GOV, http://www.ftc.gov/news-events/media-resources/consumer-finance/debt-collection (last visited Oct. 20, 2014). 2 See Fair Debt Collection Practices Act, 15 U.S.C. § 1692 (2012). 3 § 1692c(a)(1). 4 § 1692c(b). 5 § 1692d. 202 CAPITAL UNIVERSITY LAW REVIEW [43:201 “any false, deceptive, or misleading representation[;]” 6 (4) the use of unfair and unconscionable means to collect any debt; 7 and, (5) furnishing deceptive forms. 8 The prohibitions against harassment or abuse, false or misleading representations, and unfair practices are illustrated by lists of per se violations. 9 These lists are intended only as examples of prohibited conduct and are not all-inclusive. 10 Couched in the broadest possible language, the civil liability provision of the law provides: “Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person . . . .” 11 As a consequence of the phrase “any person,” the civil liability provision has been construed to provide standing to enforce the provisions of the FDCPA to debtors and non-debtors, in addition to consumers. 12 However, the standing inquiry turns upon the section of the law allegedly violated. 13 For example, § 1692e states, “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 14 When read in conjunction with the civil liability provision, § 1692e has been construed to mean “any aggrieved party may bring an action under § 1692e.” 15 6 § 1692e. 7 § 1692f. 8 § 1692j. 9 §§ 1692d–1692f. 10 Id. In each of these sections the Code expressly provides that: “Without limiting the general application of the foregoing, the following conduct is a violation of this section . . . .” See also Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993); McMillan v. Collection Prof’ls, Inc., 455 F.3d 754, 763 (7th Cir. 2006). 11 § 1692k(a). 12 See Beck v. Maximus, Inc., 457 F.3d 291, 294 (3d Cir. 2006). 13 Barasch v. Estate Info. Servs., No. 07-CV-1963, 2009 U.S. Dist. LEXIS 79338, at *5, (E.D.N.Y. Sept. 3, 2009). 14 § 1692e. 15 Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647, 649–50 (6th Cir. 1994). For purposes of a § 1692e claim, standing has been construed to include persons who have been harmed by an improper debt collection practice, someone standing in the alleged debtor’s shoes, or someone who has suffered injurious exposure to the communication. See Dutton v. Wolhar, 809 F. Supp. 1130, 1134 (D.Del. 1992); Sibersky v. Goldstein , 155 F. App’x 10, 11 (2d Cir. 2005); Guillory v. WFS Fin., Inc . , No. C 06-06963, 2007 U.S. Dist. LEXIS 24910, at *6 (N.D. Cal. Mar. 21, 2007). 2014] FAIR DEBT COLLECTION PRACTICES ACT 203 Despite the broad language of the civil liability provision, “only a consumer has standing to sue under particular sections of the FDCPA that specifically regulate communications with the consumer.” 16 Section 1692g is such a provision. 17 Successful litigants who sue to enforce the FDCPA’s provisions may recover actual damages, statutory damages, and attorney fees. 18 The FDCPA applies to the collection of personal, family, or household debts only. 19 The Act’s protections to consumers are contingent upon the Act’s definition of the terms “communication,” 20 “consumer,” 21 “creditor,” 22 “debt,” 23 and “debt collector.” 24 The FDCPA’s protective power primarily emphasizes communication between a debt collector and 16 Barasch, 2009 U.S. Dist. LEXIS 79338, at *5 (citations omitted) (internal quotation marks omitted). Several sections of the FDCPA, including § 1692g, restrict the scope of the FDCPA’s application by including the word “consumer” in the text. See, e.g. , Crafton v. Law Firm of Jonathan Levine, 957 F. Supp. 2d 992, 1001 (E.D. Wis. 2013); Tedeschi v. Kason Credit Corp., No. 3:10CV00612, 2014 U.S. Dist. LEXIS 51806, at *8 (D. Conn. Apr. 15, 2014). 17 § 1692g(a). See also Crafton , 957 F. Supp. 2d at 1001. 18 § 1692k(a)(1)–(3). 19 § 1692a(5). 20 “The term ‘communication’ means the conveying of information regarding a debt directly or indirectly to any person through any medium.” § 1692a(2). 21 “The term ‘consumer’ means any natural person obligated or allegedly obligated to pay any debt.” § 1692a(3). 22 § 1692a(4) (“The term ‘creditor’ means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.”). 23 § 1692a(5) (“The term ‘debt’ means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.”). 24 § 1692a(6) (“The term ‘debt collector’ means any person who uses any instrumentality of interstate commerce or the mails in any business the princip al purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”) The term does not include persons expressly excluded from the definition of “debt collector” in the Act. See § 1692a(6)(A)–(F). 204 CAPITAL UNIVERSITY LAW REVIEW [43:201 consumer. Consequently, a court must determine whether a communication between a debt collector and consumer has occurred before imposing liability under the FDCPA. 25 The FDCPA establishes certain rights for consumers whose debts are placed in the hands of professional debt collectors for collection. It is largely a strict liability statute. 26 Thus, debt collectors are liable regardless of whether the violation was knowing or intentional. 27 Because the FDCPA is a strict liability statute, proof of one violation is sufficient to support judgment in favor of the plaintiff. 28 The FDCPA focuses on collection methods and not whether the underlying debt is valid. 29 Consequently, the plaintiff has standing to sue under the FDCPA regardless of whether a valid debt exists. 30 “A basic tenet of the [FDCPA]” is that every consumer, even one who mismanages his or her personal finances by defaulting on his or her debts, is entitled “to be treated in a reasonable and civil manner . ” 31 Thus, a plaintiff who 25 The FDCPA does not apply to creditors seeking to collect their own debts. See Schlosser v. Fairbanks Capital Corp., 323 F.3d 534, 536 (7th Cir. 2003); F.T.C. v. Check Investors, Inc., 502 F.3d 159, 171 (3d Cir. 2007); Maguire v. Citicorp Retail Servs., Inc., 147 F.3d 232, 235 (2d Cir. 1998). However, a creditor, seeking to collect its own debt, becomes subject to the Act if it uses a name other than its own which would indicate that a third party is collecting or seeking to collect such debt. See Bridge v. Ocwen Fed. Bank, FSB, 681 F.3d 355, 360 (6th Cir. 2012); Maguire , 147 F.3d at 235. “A creditor uses a name other than its own when it uses a name that implies that a third party is involved in collecting its debts, ‘pretends to be someone else’ or ‘uses a pseudonym or alias.’” Macguire , 147 F.3d at 235. A creditor is not required to use its full business name or its name of incorporation when collecting its own debts. Id. Commonly used acronyms, the name under which it ordinarily transacts business, or any name that it has used from the inception of the credit relation are sufficient to exempt creditors from the application of the FDCPA. Id. 26 See Reichert v. Nat’l Credit Sys., Inc., 531 F.3d 1002, 1004 (9th Cir. 2008); Owen v. I.C. Sys., Inc . , 629 F.3d 1263, 1271 (11th Cir. 2011). 27 See Reichert , 531 F.3d at 1005; Owen , 629 F.3d at 1270. 28 Macarz v. Transworld Sys. Inc. , 26 F. Supp. 2d 368, 373 (D. Conn. 1998); Clomon v. Jackson , 988 F.2d 1314, 1318 (2d Cir. 1993). 29 Senftle v. Landau, 390 F. Supp. 2d 463, 464, 470 (D. Md. 2005). 30 Baker v. G. C. Servs. Corp., 677 F.2d 775, 777 (9th Cir. 1982). 31 McMillan v. Collection Prof’ls, Inc., 455 F.3d 754, 762 n. 10 (7th Cir. 2006) (quoting Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322,...