Bankruptcy

Debt Collectors Are Not Always "Debt Collectors"

By Bob Lawless

This just in from our Tampa bureau: a debt collector threatens a debtor and his family, including the lovely threat "I'm going to f*** you up" if you don't pay. Abusive debt collection practices seem to be pretty widespread but are rarely the subject of much enforcement or litigation. This time it might be different because the debtor recorded the call. The debtor has filed a lawsuit against the creditor, Jacksonville Check Cashers. The Consumerist was all over this story as well as a local TV news channel which has the original audio.

Here's the catch -- it is not clear that this particular situation violated the federal Fair Debt Collection Practices Act (FDCPA). Although that law prohibits abusive phone calls and threats, it also defines a "debt collector" as someone who collects debts on behalf of another. In this case, it was an employee of the creditor, which the FDCPA specifically says is not considered collecting debts on behalf of another. Florida has its own state law, but it seems to have the same definition. Because the creditor was acting on its behalf, these laws do not apply. The bottom line is that a debt collector is not always a "debt collector" for purposes of the law.

That is not to say the debt collector and his employer will avoid any penalties. The actions might constitute an assault (but probably not) or intentional infliction of emotional distress (but what are the damages?). Maybe there are other causes of action under Florida state law? Similarly, there may be regulatory consequences from the state licensing authorities. It would be much better, however, if the debtor could enforce his rights under the debt collection laws. The whole episode is another reminder that it is time to revisit the FDCPA and bring it up-to-date with modern commercial reality.

Full post as published by Credit Slips on October 14, 2009 (boomark / email).