FDCPA And Judgment Recovery

August 11, 2023


The FDCPA (Fair Debt Collection Practices Act) are a set of Federal laws regulating (among other things) how one may communicate with debtors.

The FDCPA generally applies to “consumer debts”. It really would not matter whether you had an assignment of judgment yet or whether the target was a person or a business, you could be charged with an allege FDCPA violation someday.

If you extract information by using pretexts, one day your debtor or their lawyer comes after you (having figured out how you obtained the information). when you extract information by pretext, you are guilty of violating GLB. I have not yet heard about anyone ever being prosecuted under this law. I would not want to be the CFPB’s test case – their fines tend to start at about a million and sometimes much more.

It is worthwhile reading the PDF statutes on this at (e.g.:) /www.law.cornell.edu/uscode/text/15/6809:.

Thee issue appears to mainly obtaining non-public personal information by fraud. (e.g., bank account numbers, SSNs, credit reports, etc.). I think just asking or finding out where they bank is not personally identifiable information. However getting:

1) telephone records from a phone company, or
2) though financial records, through fraud is very bad.

Other than those two areas, there seems to be very few laws against pretexting. Here is a very interesting discussion on pretexting, mostly from a California point of view. “http://socalpi.blogspot.com/2008/07/pretexting-is-it- legal.html”. Another good article is at: TARGET = _blank”>http://www.pimagazine.com/ftc_article.htm “.

FDCPA laws are both a guide and a code of conduct for debt collectors. In general, the FDCPA protects debtors from creditors, and gives debtors rights and remedies for any creditor violations.

As with many laws, the complete set of FDCPA laws are lengthy and difficult to understand. Some of the most important sections specify that creditors must be careful not to tell people about the judgment debtor’s debt.

One must avoid any form of improper disclosures. You can tell the debtor’s spouse as per “section 805”. However, you may not tell the debtor’s boss the debtor owes a debt, and you cannot put “debt or judgment collector” on envelopes mailed to the debtor, etc.

Another important part of the FDCPA laws specify that you may not threaten (or even mention to a debtor) any action that you are not fully ready and legally able to perform. For example, you cannot tell a debtor that they may lose their home, unless you really can and will cause that to happen.

Some judgment enforcers debate that when one buys a judgment and enforces it, they are not a third-party debt collector, and may not have to worry about following the FDCPA laws.

However, most judgment enforcers follow the FDCPA laws because they are generally common sense, are somewhat vague, and the penalties for not following them can be severe. Be sure to see another of our articles: Debts And The FDCPA.

Also, sometimes what you do and call yourself does not matter, the laws still apply (often as the argument of the debtor’s lawyer) to you, even if you think they do not.

That said, I think the FDCPA laws can hurt debtors, because they may prevent them from “smelling the coffee” and paying, before a serious recovery remedy is taken. The FDCPA laws sometimes hurts the consumers (debtors) they were intended to protect.

For example, a judgment enforcer can arrange to have the Sheriff seize and sell a judgment debtor’s vehicle with no prior notice to the judgment debtor. In some states, when this is done, the creditor gets the vehicle, and the debtor still has to pay off the vehicle loan.

The FDCPA laws prevent one from contacting the debtor and communicating anything remotely like “it would be in your best interest to work out a payment arrangement with me. If you do not, something bad is going to happen in the next few weeks”. This may be completely true, but communicating that can be considered a “threat” under the FDCPA laws.

If one communicates to a judgment debtor “if they do not start paying, you are going to have the sheriff take seize their vehicle and sell it”, the judgment debtor will probably hide their vehicle. Many times, such wordings would cause many debtors to set up a payment plan to avoid having their car seized. However, in some cases, such wordings could be used by the judgment debtor against you, alleging a FDCPA violation.

Because of the FDCPA, judgment enforcers are better off simply having the sheriff seize the judgment debtor’s vehicle by surprise, than to use this potential possibility, to encourage the judgment debtor to “smell the coffee” and set up a payment plan.

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