Fair Debt Collection Practices Act

DANIEL A. EDELMAN
July 31, 2013

© Daniel A. Edelman 2012

I. INTRODUCTION

This article provides an overview of recent developments concerning the

application of the Fair Debt Collection Practices Act, 15 U.S.C. §1692 et seq. ("FDCPA").

The statute regulates the conduct of "debt collectors" in collecting "debts" owed
or allegedly owed by "consumers." It is designed to protect consumers from unscrupulous
collectors, whether or not there is a valid debt. The FDCPA broadly prohibits unfair or
unconscionable collection methods; conduct which harasses, oppresses or abuses any debtor; and
any false, deceptive or misleading statements, in connection with the collection of a debt; it also
requires debt collectors to give debtors certain information. 15 U.S.C. §§1692d, 1692e, 1692f
and 1692g.

In enacting the FDCPA, Congress recognized the "universal agreement among

scholars, law enforcement officials, and even debt collectors that the number of persons who
willfully refuse to pay just debts is minuscule [sic] ... [T]he vast majority of consumers who
obtain credit fully intend to repay their debts. When default occurs, it is nearly always due to an
unforeseen event such as unemployment, overextension, serious illness, or marital difficulties or
divorce." S. Rep. No. 382, 95th Cong., 1st Sess., p. 3 (1977), reprinted in 1977 U.S.C.C.A.N.
1695, 1697.

The FDCPA is liberally construed in favor of the consumer to effectuate its

purposes. Cirkot v. Diversified Financial Systems, Inc., 839 F.Supp. 941, 944 (D. Conn. 1993);
Johnson v. Riddle, 305 F.3d 1107, 1117 (10th Cir. 2002).

Statutory damages are recoverable for violations, whether or not the consumer
proves actual damages.
II. STATUTORY COVERAGE AND DEFINITIONS

1. WHO IS A “DEBT COLLECTOR”

Basically, an FDCPA “debt collector” includes anyone who regularly collects

debts after they have allegedly become delinquent as agent for their owner, as well as anyone
who acquires debts for their own account after they have allegedly become delinquent. Kimber
v. Federal Financial Corp., 668 F.Supp. 1480 (M.D.Ala. 1987); McKinney v. Cadleway Props.,
Inc., 548 F.3d 496 (7th Cir. 2008).

The above conclusion is based on the definition of “debt collector” is found in 15

U.S.C. §1692a(6), which must be read together with the definition of “creditor” in 15 U.S.C.
§1692a(4). A “creditor” is “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.” A “debt collector” is “any person who uses any instrumentality of interstate
commerce or the mails in any business the principal 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. Notwithstanding the exclusion provided by clause (F) of the
last sentence of this paragraph, the term includes any creditor who, in the process of collecting
his own debts, uses any name other than his own which would indicate that a third person is
collecting or attempting to collect such debts. . . . The term does not include– (A) any officer or
employee of a creditor while, in the name of the creditor, collecting debts for such creditor; . . .

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[and] (F) any person collecting or attempting to collect any debt owed or due or asserted to be
owed or due another to the extent such activity . . . (ii) concerns a debt which was originated by
such person; (iii) concerns a debt which was not in default at the time it was obtained by such
person . . . .”
a. “Default”

“[D]efault” reflects the meanings found in relevant contractual agreements and

state law. De Dios v. Int'l Realty & RC Invs., 641 F.3d 1071, 1074–75 (9th Cir. 2011):

Although the Act does not define "in default," courts interpreting
§1692a(6)(F)(iii) look to any underlying contracts and applicable law governing
the debt at issue. See, e.g., Fed. Trade Comm'n, Advisory Op. n.2 (April 25,
1989) ("Whether a debt is in default is generally controlled by the terms of the
contract creating the indebtedness and applicable state law."), available at
www.ftc.gov/os/statutes/fdcpa/ letters/cranmer.htm; Berndt v. Fairfield Resorts,
Inc., 339 F. Supp. 2d 1064, 1068-69 (W.D. Wis. 2004) (examining plaintiff 's
timeshare purchase contract and defendant's management agreement to determine
if overdue association fees were in default); Skerry v. Mass. Higher Educ.
Assistance Corp., 73 F. Supp. 2d 47, 52-54 (D. Mass. 1999) (applying federal
regulations governing student loans at issue to determine if they were in default).
.
b. “Alleged” default

Since the statute uses “alleged” to modify “debt,” an obligation that the defendant
treats as being in default is covered even if (a) the defendant is attempting to collect from the
wrong person or (b) the debt is not in fact in default. Schlosser v. Fairbanks Capital Corp., 323
F.3d 534 (7th Cir. 2003); McKinney v. Cadleway Props., Inc., 548 F.3d 496 (7th Cir. 2008).

In Oppenheim v. I.C. Sys., Inc., 627 F.3d 833 (11th Cir. 2010), the court held that
an individual’s obligation under PayPal’s contract to pay back PayPal for funds withdrawn from
the individual’s PayPal account, as a result of a dishonored deposit to the account by a fraudulent
purchaser of the individual’s laptop, was a transaction and debt to which the FDCPA applied.

In Queen v. Walker, No. 09cv3428, 2010 U.S. Dist. LEXIS 67263, 2010 WL
2696720 (D. Md. July 7, 2010), the court held that the alleged victim of forgery and fraud
against whom collection efforts were directed had standing to maintain suit for the resulting
FDCPA violations.

In Whiting v. Deloatch, No. 09cv3426, 2010 U.S. Dist. LEXIS 65710, 2010 WL
2651656 (D. Md. July 1, 2010), the court held that the victim of a mortgage rescue scam was a
‘‘consumer’’ with standing even though title to the property was in the defendant’s name and
collection actions were aimed at the defendant. “Plaintiff is the true party in interest because
what he claims to be his property fraudulently serves as collateral for the delinquent mortgage
loan. Because of the alleged fraud, Consumer stands in the shoes of Deloatch and Plaintiff’s
home may be sold to pay the debt BGW has purportedly attempted to collect, if the Property is
foreclosed upon. Moreover, BGW allegedly continued its collection efforts after Plaintiff put the
law firm on notice of the alleged fraud.”
2. Creditors and furnishers of deceptive forms

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 The (pre-default) creditor itself is excluded from the definition of "debt collector"
unless he “in the process of collecting his own debts, uses any name other than his own which
would indicate that a third person is collecting or attempting to collect such debts.” 15 U.S.C.
§1692a(6) . Illustrative of the type of conduct which may result in a creditor being treated as a
“debt collector” are Maguire v. Citicorp Retail Services, Inc., 147 F.3d 232 (2nd Cir. 1998)
(Citicorp Retail Services sent out letters under the letterhead of "Debtor Assistance" to collect
private label credit card debts); Catencamp v. Cendant Timeshare Resort Group -- Consumer
Finance, Inc., 471 F.3d 780 (7th Cir. 2006) (creditor CTRG used name “Resort Financial
Services” on collection letters); and Nielsen v. Dickerson, 307 F.3d 623 (7th Cir. 2002) (creditor
arranged for attorney to send out letters to induce communication with creditor’s own collection
department on attorney letterhead for small sum per letter).

Creditors may become "debt collectors" by using names in collecting their debts
which falsely suggest the involvement of third party debt collectors or attorneys. The simplest
situation covered by the "other name" exception of §1692a(6) is that where creditor ABC sends
its debtors letters which demand payment in the name of XYZ Collection Agency, XYZ either
being a totally fictitious entity or a real entity which has no significant involvement in the actual
collection of ABC's debts. On its face, such conduct makes ABC a "debt collector" under
§1692a(6) and simultaneously violates the prohibition against deceptive collection practices,
§1692e. Numerous pre-FDCPA cases held that this practice violated §5 of the FTC Act. Wm.
M. Wise Co. v. FTC., 246 F.2d 702 (D.C. Cir. 1957); In re Teitelbaum, 49 FTC 745 (1953); In re
Bureau of Engraving, Inc., 39 FTC 192 (1944); In re National Remedy Co., 8 FTC 437 (1925);
In re B.W. Cooke, 9 FTC 283 (1925); In re U.S. Pencil Co., 49 FTC 734 (1953); In re Perpetual
Encyclopedia Corp., 16 FTC 443 (1932).

The FTC has stated that a creditor is using a name "other than [the creditor's]
own" if the creditor is using a name which on its face it "would indicate that a third person is
collecting or attempting to collect [the creditor's] debts" and no disclosure is made of the
relationship between the name used in dealing with the consumer prior to default and the name
used in attempting to collect after default, even if the creditor lawfully owns the name used to
make collection. Sept. 19, 1985 opinion letter. The FTC commentary on the FDCPA states:

Creditors are generally excluded from the definition of "debt collector" to the
extent that they collect their own debts in their own name. However the term
specifically applies to "any creditor who, in the process of collecting his own
debts, uses any name other than his own which would indicate that a third person
is" involved in the collection.
A creditor is a debt collector for purposes of this act if:

o He uses a name other than his own to collect his debts, including a
fictitious name.

o His salaried attorney employees who collect debts use stationery that
indicated that attorneys are employed by someone other than the creditor
or are independent or separate from the creditor [the same should apply to
salaried nonattorney employees, as herein]. . . .

o The creditor's collection division or related corporate collector is not

clearly designated as being affiliated with the creditor; however, the
creditor is not a debt collector if the creditor's correspondence is clearly
labeled as being from the "collection unit of the (creditor's name)," since

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 the creditor is not using a "name other than his own" in that instance.
(Emphasis added.)

In Maguire v. Citicorp Retail Services, Inc., 147 F.3d 232 (2nd Cir. 1998), the
Second Circuit reversed a summary judgment for the defendant in a case where Citicorp Retail
Services sent out letters under the letterhead of "Debtor Assistance" to collect private label credit
card debts. To the same effect is Catencamp v. Cendant Timeshare Resort Group -- Consumer
Finance, Inc., 471 F.3d 780 (7th Cir. 2006) (“Resort Financial Services” used by CTRG).

"[T]he scope of creditor liability under §1692a(6) goes beyond the creditor's use
of aliases or pseudonyms to instances where the creditor merely implies that a third party is
collecting a debt when in fact it is the creditor that is attempting to do so." Larson v. Evanston
Northwestern Healthcare Corp., 98 C 5, 1999 WL 518901, 1999 U.S. Dist. LEXIS 11380 (N.D.
Ill. July 20, 1999).

A creditor collects its own debts by using a different name, implying that a third
party was the debt collector, either (a) when the creditor uses an alias, or (b) when the creditor
controls all aspects of the collection effort. E.g., Sokolski v. Trans Union Corp., 53 F.Supp. 2d
307, 312 (E.D.N.Y. 1999); Flamm v. Sarner & Associates, P.C., 02-4302, 2002 WL 31618443
(E.D.Pa., Nov. 6, 2002).

Another court has stated that “The ‘false name’ exception applies to any creditor
who, in the process of collecting its debts, ‘indicate[s] that a third party is collecting or
attempting to collect such debts . . . pretends to be someone else or uses a pseudonym or alias . . .
or . . . [who] owns and controls the debt collector, rendering it the creditor's alter ego.’” Wood v.
Capital One Servs., LLC, 718 F. Supp. 2d 286, 291 (N.D.N.Y. 2010), citing Mazzei v. Money
Store, 349 F. Supp.2d 651, 659 (S.D.N.Y. 2004).

15 U.S.C. §1692j(a) provides that “It is unlawful to design, compile, and furnish
any form knowing that such form would be used to create the false belief in a consumer that a
person other than the creditor of such consumer is participating in the collection of or in an
attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is
not so participating.” This language covers an attorney who allows a creditor to send out letters
on his letterhead, or a collection agency which provides form letters purporting to come from the
agency for a creditor to send out. 15 U.S.C. §1692j(b) provides that “Any person who violates
this section shall be liable to the same extent and in the same manner as a debt collector is liable
under [15 U.S.C. §1692k] for failure to comply with a provision of this title.”

The successor in interest to a creditor's business or line of business, which

became such through corporate changes and is openly identified as such, has been held not to be
a "debt collector." Orent v. Credit Bureau of Greater Lansing, 1:00cv742, 2001 U.S.Dist.
LEXIS 17683 (W.D.Mich. Oct. 23, 2001) (successor by merger treated as predecessor); Guest v.
Capital One Financial Services, D. Ct., Conn. Law Tribune, Nov. 18, 1996; Tatar v. Trott &
Trott, PC, Case No. 10-12832, 2012 WL 6775615 (E.D.Mich., Dec. 17, 2012) (report and
recommendation), adopted, 2013 WL 66479 (Jan. 4, 2013) (“ See Payton v. Trott & Trott, Case
No. 10-14916 (E.D. Mich. 2011) (Dkt. 15) (15 U.S.C. § 1692a(6)(F) exempts banks from
collecting on their own accounts a subsequent merger does not alter this principle), citing Orent
v. Credit Bureau of Greater Lansing, Inc., 2001 U.S. Dist. LEXIS 17683, at *13 (W.D. Mich.
2010) (holding that a lender which assumes the debt of another lender after a merger is not a
"debt collector" on that debt under 15 U.S.C. § 1692a(6)(F)”).

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3. Other statutory exclusions

Also excluded from the definition of "debt collector" are the following:

a. Officers and employees of the creditor while collecting the debt in

the creditor's name.

b. Affiliates of the creditor. Section 1692a(6)(B) creates an

exemption for "any person while acting as a debt collector for
another person, both of whom are related by common ownership
or affiliated by corporate control, if the person acting as a debt
collector does so only for persons to whom it is so related or
affiliated and if the principal business of such person is not the
collection of debts." There is no requirement that the affiliate
identify itself as an affiliate of the creditor. Aubert v. American
General, 137 F.3d 976 (7th Cir. 1998).

c. Officers or employees of the United States or any state. Private

debt collectors collecting student loans and other obligations which
meet the definition of a "debt" and were originally owed to a
governmental unit do not qualify for this exemption. Brannan v.
United Student Aid Funds, Inc., 94 F.3d 1260 (9th Cir. 1996);
Jones v. Intuition, Inc., 12 F.Supp. 2d 775 (W.D. Tenn. 1998).
However, other courts have held that the student loan guaranty
agencies are covered by the fiduciary exception. Rowe v. Educ.
Credit Mgmt. Corp., 559 F.3d 1028, 1034-5 (9th Cir. 2009); Davis
v. United Student Aid Funds, 45 F.Supp. 2d 1104 (D. Kans. 1998);
Lasserre v. Educational Credit Management Corp.,
3:12-cv-00091-JTT- JDK, 2012 U. S. Dist. LEXIS 83043, 2012
WL 2191628 (M.D.La., June 14, 2012); Donohue v. Regional
Adjustment Bureau, Inc., No. 12-1460 (E.D.Pa., Feb. 19, 2013).

d. Process servers. This exemption does not extend to the person

who hired the process server. Romea v. Heiberger & Associates,
163 F.3d 111, 117 (2d Cir. 1998); Alger v. Ganick, O’Brien &
Sarin, 35 F.Supp.2d 148, 153 (D.Mass. 1999). It also does not
cover filing a false affidavit stating that service has been made,
when that is not the case. Sykes v. Mel Harris & Assocs., LLC, 09
Civ. 8486 (DC), 2010 U.S. Dist. LEXIS 137461 (S.D.N.Y., Dec.
29, 2010).

e. Bona fide non-profit debt counselors.

f. Persons who service debts which are not in default (e.g., servicers
of mortgages and student loans). Perry v. Stewart Title Co., 756
F.2d 1197 (5th Cir. 1985); Coppola v. Connecticut Student Loan
Found., Civ. A. N-87-398(JAC), 1989 WL 47419, 1989 U.S. Dist.
LEXIS 3415 (D.Conn. March 22, 1989). This “servicer
exemption” does not operate in favor of such entities when they
acquire a loan after default. Brannan v. United Student Aid Funds,

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 Inc., 94 F.3d 1260, (9th Cir. 1996)("The FDCPA does not provide
an exemption for guaranty agencies that acquire a student loan
after default in order to pursue its collection"); Student Loan Fund
of Idaho, Inc. v. Duerner, 131 Idaho 45, 951 P.2d 1272 (1997).
However, where a loan is restructured and the restructured loan is
not in default, the fact that the loan was in default prior to being
restructured does not make entities purchasing or servicing the
loan FDCPA debt collectors. Bailey v. Security National Servicing
Corp., 154 F.3d 384 (7th Cir. 1998).

g. “[A]ny person collecting or attempting to collect any debt owed or

due or asserted to be owed or due another to the extent such
activity . . . is incidental to a bona fide fiduciary obligation or a
bona fide escrow arrangement . . . ." The fiduciary relationship
must exist for purposes other than debt collection. Thus, a
receiver or trustee of a corporate creditor or the personal
representative or trustee of an individual creditor are treated as if
they were the original creditor. Similarly, student loan guaranty
agencies, which by statute have a fiduciary relationship with the
Government in making loans, may be exempt under this exception.
Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028, 1030 (9th Cir.
2009); Donohue v. Regional Adjustment Bureau, Inc., No. 12-1460
(E.D.Pa., Feb. 19, 2013). The fact that a collection attorney or
agency is the agent, and therefore the fiduciary, of the creditor
does not give rise to an exemption.

h. Persons who collect debts "originated by such person[s]". 15

U.S.C. §1692a(6)(F)(ii). An "originator" is one who played a
significant role in originating the obligation. Buckman v. American
Bankers Ins. Co., 115 F.3d 892 (11th Cir. 1997), aff'g 924 F.Supp.
1156 (S.D. Fla. 1996).

i. A secured party who takes possession of the creditor's receivables

by enforcing its security interest. That is, if consumer lender ABC
pledges its consumer receivables to commercial lender XYZ and
XYZ, pursuant to its rights under the security agreement, takes the
collateral and directs the consumer to pay XYZ, XYZ is not a
"debt collector".

j. Certain private entities that operate under the direction,

supervision, and control of a state or district attorney in connection
with an established bad check program are excluded from the
definition of “debt collector” pursuant to 15 U.S.C. §1692p.
4. BAD DEBT BUYERS

Debt buying is a fast-growing business. According to an industry group, the Debt

Buyers Association: ”The face value of all such debt sold in 1993 was $1.3 billion. By 1997,
that number had grown to $15 billion and sales reached approximately $25 billion in 2000. The
Debt Buyers Association estimates that the amount of debt to be sold by the original creditors in
2002 will exceed $60 billion.” By 2007 the amount had risen to $110 billion per year. Eileen
Ambrose, “Zombie Debt; Debt Can Come Back to Haunt You Years Later,” The Baltimore Sun,

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May 6, 2007 pg. 1C.

A company that regularly purchases delinquent debts is a "debt collector" within

the meaning of the FDCPA with respect to the delinquent debts. Schlosser v. Fairbanks Capital
Corp., 323 F.3d 534 (7th Cir. 2003); McKinney v. Cadleway Props., Inc., 548 F.3d 496 (7th Cir.
2008); FTC v. Check Investors, Inc., 502 F.3d 159 (3rd Cir. 2007); Pollice v. Nat'l Tax Funding,
225 F.3d 379 (3rd Cir. 2000); Ballard v. Equifax Check Services, 27 F.Supp.2d 1201 (E.D. Cal.
1998); Kimber v. Federal Financial Corp., 668 F.Supp. 1480 (M.D.Ala. 1987); Durkin v.
Equifax Check Servs., 00 C 4832 , 2002 U.S. Dist. LEXIS 20742 (N.D.Ill., October 24, 2002);
Cirkot v. Diversified Systems, 839 F.Supp. 941 (D.Conn. 1993); Ruble v. Madison Capital, Inc.,
C-1-96-1693, 1998 U.S.Dist. LEXIS 4926 (N.D.Ohio 1998); Holmes v. Telecredit Service Corp.,
736 F.Supp. 1289, 1292 (D.Del. 1990); Farber v. NP Funding II, LP, 96 CV 4322, 1997 WL
913335, *3, 1997 U.S.Dist. LEXIS 21245 (E.D.N.Y. Dec. 9, 1997) (“those who are assigned a
defaulted debt are not exempt from the FDCPA if their principal purpose is the collection of
debts or if they regularly engage in debt collection”); Stepney v. Outsourcing Solutions, Inc., 97
C 5288, 1997 U.S.Dist. LEXIS 18264 (N.D.Ill. 1997); Coppola v. Connecticut Student Loan
Found., Civ. A. N-87-398(JAC), 1989 WL 47419, 1989 U.S. Dist. LEXIS 3415 (D.Conn. March
22, 1989); Wagner v. American Nat'l Educ. Corp., Civ. No. N-81-541 (PCD), 1983 U.S.Dist.
LEXIS 10287 (D.Conn. Dec. 30, 1983) ("The statute permits service debt collection free of the
act if, when the debt was acquired, it was not in default"); Commercial Service of Perry v.
Fitzgerald, 856 P.2d 58, 62 (Colo.App. 1993) ("[A] company which takes an assignment of a
debt in default, and is a business the principal purpose of which is to collect debts, may be
subject to the Act, even if the assignment is permanent and without any further rights in the
assignor"). As long as the purchaser asserts that the debt was in default when acquired, the
FDCPA applies, even if the assertion proves to be false. Schlosser v. Fairbanks Capital Corp.,
323 F.3d 534 (7th Cir. 2003); Bridge v. Ocwen Federal Bank, FSB, 681 F.3d 355 (6th Cir. 2012).

"The legislative history of section 1692a(6) [which defines 'debt collector']

indicates conclusively that a debt collector does not include . . . an assignee of a debt, as long as
the debt was not in default at the time it was assigned." Perry v. Stewart Title Co., 756 F.2d
1197, 1208 (5th Cir. 1985), citing S. Rep. No. 95-382, 95th Cong., 1st Sess. 3, reprinted in 1977
USCCAN 1695, 1698. Conversely, the assignee of a debt which is in default at the time of the
assignment is a "debt collector," if the assignee's principal purpose is the collection of debts, or
the assignee regularly engages in the collection of debts. "For instance, a mortgage servicing
company is not considered a debt collector when it acquires loans originated by others and not in
default at the time acquired. However, to the extent the mortgage servicing company receives
delinquent accounts for collection it is a debt collector with respect to those accounts." Games v.
Cavazos, 737 F.Supp. 1368, 1384 (D.Del. 1990).

Since litigation is a means of debt collection, Heintz v. Jenkins, 514 U.S. 291, 292
(1995); FTC v. Check Investors, Inc., 502 F.3d 159, 173 (3rd Cir. 2007), someone who acquires
debts in default and files collection lawsuits is subject to the FDCPA.

Entities subject to the FDCPA under this principle include (1) bad debt buyers
that purchase charged-off credit card and other debts, Kimber v. Federal Financial Corp., 668
F.Supp. 1480 (M.D.Ala. 1987); (2) “special servicers” that take over servicing of mortgage loans
after they become delinquent, Schlosser v. Fairbanks Capital Corp., 323 F.3d 534 (7th Cir.
2003); and (3) check guaranty companies that purchase dishonored checks, Durkin v. Equifax
Check Servs., 00 C 4832 , 2002 U.S. Dist. LEXIS 20742 (N.D.Ill., Oct. 24, 2002); Ballard v.
Equifax Services, Inc., 27 F.Supp.2d 1201 (E.D.Cal. 1998); Holmes v. Telecredit Services
Corp., 736 F.Supp. 1289, 1291-94 (D.Del. 1996); Winterstein v. CrossCheck, Inc., 149
F.Supp.2d 466 (N.D.Ill. 2001).

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 The industry claims that there is a “passive debt buyer” exception. There is no
“passive debt buyer” exception. Fiorenzano v. LVNV Funding, LLC, C. A. No.11-178M, 2012
U.S. Dist. LEXIS 91405, 2012 WL 2562415 (D.R.I., June 29, 2012). Most cases in which
someone has claimed to be a “passive debt buyer” are cases in which suits have been filed by a
collection attorney with the “passive debt buyer” as plaintiff. Since the FDCPA covers those
who attempt to collect, “directly or indirectly”, 15 U.S.C. §1692a(6), authorizing an attorney or
other agent to collect does not take one out of the definition. See Winemiller v. Worldwide Asset
Purchasing, LLC, 1:09-cv-02487, 2011 U.S. Dist. LEXIS 41520 (D.Md., April 15, 2011);
Bradshaw v. Hilco Receivables, LLC, 765 F. Supp. 2d 719 (D.Md. 2011).
5. LAWYERS

Lawyers were originally excluded from the definition of "debt collector." In 1986,
Congress removed the attorney exemption. See P.L. 99-361, 100 Stat. 768, deleting former 15
U.S.C. §1692a(6)(F), which excluded from the definition of "debt collector" "any attorney-at-
law collecting a debt as an attorney on behalf of and in the name of a client."
Now, the "FDCPA does apply to a lawyer . . . with a general practice including a
minor but regular practice in debt collection." Crossley v. Lieberman, 90 B.R. 682, 694
(E.D.Pa. 1988), aff'd, 868 F.2d 566 (3d Cir. 1989). The legislative history of the amendment
states that collection attorneys were not being effectively policed by the legal profession and
courts, and that the removal of the exemption was necessary to "put a stop to the abusive and
harassing tactics of attorney debt collectors." 1986 USCCAN 1756-57.

In Heintz v. Jenkins, 514 U.S. 291 (1995), the United States Supreme Court held
that litigation conduct of attorneys in collecting consumer debts is not exempt from the FDCPA,
rejecting the arguments of the collection bar to the contrary. Unlawful conduct by collection
attorneys in court proceedings is now covered, assuming that there is no Rooker-Feldman or res
judicata bar. Watkins v. Peterson Enterprises, Inc., 57 F.Supp.2d 1102 (E.D.Wash. 1999)
(unauthorized costs in connection with state court garnishments).

The amount of collection activity necessary to make a lawyer a "debt collector" -

- one who "regularly" collects consumer debts -- is minimal. Goldstein v. Hutton, Ingram,
Yuzek, Gainen, Carroll & Bertollotti, 374 F.3d 56 (2d Cir. 2004) (trier of fact could find law
firm was subject to FDCPA based on 145 demands during one year even though attorney only
received $ 5,000 in revenues amounting to 0.05% of its $ 10,000,000 revenue over that period).
The Goldstein court considered relevant “(1) the absolute number of debt collection
communications issued, and/or collection-related litigation matters pursued, over the relevant
period(s), (2) the frequency of such communications and/or litigation activity, including whether
any patterns of such activity are discernable, (3) whether the entity has personnel specifically
assigned to work on debt collection activity, (4) whether the entity has systems or contractors in
place to facilitate such activity, such as use of mailing services, collection software, and use of
form letters, and (5) whether the activity is undertaken in connection with ongoing client
relationships with entities that have retained the lawyer or firm to assist in the collection of
outstanding consumer debt obligations”, as well as (6) “whether the law practice seeks debt
collection business by marketing itself as having debt collection expertise”. Factor (5) includes
relationships with collection agencies, “lenders or other creditors, landlords or other lessors, and
service providers “.

In Oppong v. First Union Mortgage Corp., 02-2149, 2006 U.S.Dist. LEXIS

37551 (E.D.Pa. Dec. 29, 2005), the court held that “debt collectors are those who frequently and
consistently perform debt collection activities as part of their business services,” regardless of

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“the percentage of debt collection business in relation to the defendant’s other business,” so that
acquiring 89 delinquent mortgages within 3 months (356 per year) resulted in “regularly”
collecting delinquent debts regardless of the fact that 141,000 were acquired that were not
delinquent. The percentage of collection activity was relevant under the “principal purpose” part
of the test.

A law firm's debt collection work which amounted to less than 4% of its total
business brought it within the definition. "While the ratio of debt collection to other efforts may
be small, the actual volume is sufficient to bring defendant under the Act's definition of 'debt
collector.'" Stojanovski v. Strobl & Manoogian, P.C., 783 F.Supp. 319, 322 (E.D.Mich. 1992).
An attorney who represented four collection agencies, filed over 150 collection suits in a two-
year period, and sent one particular collection letter over 125 times in a 14-month period was a
debt collector even though debt collection was merely incidental to his primary law practice.
Cacace v. Lucas, 775 F.Supp. 502 (D.Conn. 1990). Another decision holds that sending 60
collection letters during a period of several weeks is sufficient. Tragianese v. Blackmon, 993
F.Supp. 96 (D. Conn. 1997). Another held that a law firm was subject to the FDCPA when it
consistently accepted at least 10 debt collection matters every year. Silva v Mid-Atlantic Mgmt.
Corp., 277 F Supp 2d 460 (E.D.Pa. 2003). On the other hand, an attorney who collected less than
20 consumer debts in a 10-year period was not a debt collector. Mertes v. Devitt, 734 F.Supp.
872 (W.D.Wis. 1990).

In two questionable decisions, courts held that a nascent collection lawyer who
sent out about two dozen or three dozen letters at one time was not engaged in regular debt
collection. Mladenovich v. Cannonito, 97 C 4729, 1998 WL 42281,1998 U.S. Dist. LEXIS 985
(N.D. Ill., Jan. 29, 1998) (two dozen); White v. Simonson & Cohen, 23 F.Supp.2d 273 (E.D.N.Y.
1998) (35 letters sent on one occasion not enough). See also Schroyer v. Frankel, 197 F.3d 1170,
1173, 1177 (6th Cir. 1999) (where firm handled 50-75 collection cases annually, constituting
less than 2% of overall practice, maintained no non-attorney staff or computer aids for debt
collection, and debt collection activity came from non-collection business clients and was
"incidental to, and not relied upon or anticipated in," firm's practice of law, firm was not debt
collector); Cashman v. Ricigliano, 3:02CV1423 (MRK), 2004 U.S. Dist. LEXIS 17027
(D.Conn., August 25, 2004) (“The FDCPA applied to attorneys "regularly" engaging in debt
collection activity, including such activity in the nature of litigation. Defendants were "debt
collectors" under the FDCPA. They issued 97 collection letters during the approximately
five-month period relevant to the instant case. Moreover, they initiated 53 collection lawsuits in
connection with their collection efforts. It appeared that certain personnel in the firm were
devoted, at least in part, to debt collection activity. Defendants put in place facilities designed
expressly to facilitate its debt collection activity. Defendants' debt collection activity was
undertaken in connection with an ongoing relationship with a licensed collection agency. Since
defendants conceded that plaintiffs would prevail on liability in the event the court determined
that they are debt collectors under the FDCPA, defendants were not entitled to summary
judgment and plaintiffs were entitled to partial summary judgment on liability.”); and Heller v.
Graf, 488 F. Supp. 2d 686 (N.D.Ill. 2007) (14 collection letters at one time and lawsuits filed on
3 of the cases presents fact issue).

A lawyer should be classified as a "debt collector" if either a volume threshold or a

percentage-of-time threshold is met, or if the lawyer holds himself out as engaging in consumer
debt collection. A volume threshold is necessary because a law firm that handles a modest
number of consumer collection matters as part of providing a full range of services to its clients
should be required to comply with the FDCPA. One court has held that "It is the volume of the
attorney's debt collection efforts that is dispositive, not the percentage such efforts amount to in
the attorney's practice." Stojanovski v. Strobl & Manoogian, P.C., 783 F.Supp. 319, 322

10
(E.D.Mich. 1992), citing Cacace v. Lucas, 775 F.Supp. 502, 504 (D.Conn. 1990); In re Littles, 90
Bankr. 669, 676 (Bankr. E.D. Pa. 1988), aff'd as modified sub nom., Crossley v. Lieberman, 90
Bankr. 682 (E.D. Pa. 1988), aff'd, 868 F.2d 566 (3d Cir. 1989). But see Hartl v. Presbrey &
Assoc., 95 C 4728, 1996 WL 529339, 1996 U.S.Dist. LEXIS 13419 (N.D.Ill., Sep. 16, 1996);
Nance v. Petty, Livingston, Dawson & Devening, 881 F.Supp. 223 (W.D.Va. 1994). The Fifth
Circuit has held that a law firm that sent out 600 demand letters was a "debt collector"
notwithstanding the fact that only a small fraction of its time was spent in that activity. Garrett v.
Derbes, 110 F.3d 317 (5th Cir. 1997).

A percentage threshold and a "holding out" test are also necessary because the
FDCPA should apply to (i) a lawyer with a nascent collection practice and (ii) a lawyer who
attempts to obtain collection business, even if he is not successful in obtaining very much of it.
6. FORECLOSURE LAWYERS

Every Court of Appeals to have addressed the issue has held that foreclosure
lawyers are subject to the FDCPA, either generally or unless they neither attempt to collect
money nor enforce personal liability. Kaltenbach v. Richards, 464 F.3d 524 (5th Cir. 2006);
Gburek v. Litton Loan Servicing LP, 614 F.3d 380 (7th Cir. 2010) (request for information to
evaluate modification covered even if there is no "explicit demand for payment."); Wallace v.
Washington Mut. Bank, F.A., 683 F.3d 323 (6th Cir. 2012); Reese v. Ellis, Painter, Ratterree &
Adams LLP, 678 F.3d 1211, 1217-18 (11th Cir. 2012) (noting that a contrary “rule would create a
loophole in the FDCPA. A big one. In every case involving a secured debt, the proposed rule
would allow the party demanding payment on the underlying debt to dodge the dictates of §1692e
by giving notice of foreclosure on the secured interest. The practical result would be that the Act
would apply only to efforts to collect unsecured debts. So long as a debt was secured, a lender (or
its law firm) could harass or mislead a debtor without violating the FDCPA. That can't be right. It
isn't. A communication related to debt collection does not become unrelated to debt collection
simply because it also relates to the enforcement of a security interest. A ‘debt’ is still a ‘debt’
even if it is secured.”); Birster v. American Home Mortgage Servicing, Inc., 11-13574, 2012 U.S.
App. LEXIS 14660 (11th Cir., July 18, 2012) (same); Wilson v. Draper & Goldberg, P.L.L.C.,
443 F.3d 373, 376 (4th Cir. 2006) (FDCPA applies to actions of attorneys hired to initiate
non-judicial foreclosure; concerned over the "enormous loophole" that would result otherwise,
but also relying on direct requests for payment to conclude that FDCPA applies); Brown v.
Morris, No. 04-60526, 243 Fed. Appx. 31; 2007 U.S. App. LEXIS 15396 (5th Cir., June 28, 2007)
(same); Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227, 233-36 (3d Cir. 2005) (FDCPA
applies to collection of overdue water and sewer obligations via lien filed against consumer's
house; also relied on letters requesting payment); Rawlinson v. Law Office of William M. Rudow,
LLC, No. 10-2148, 460 Fed. Appx. 254; 2012 U.S. App. LEXIS 173 (4th Cir. January 5, 2012)
(replevin action is covered by FDCPA). Accord, McDaniel v. South & Assocs., 325 F. Supp. 2d
1210, 1217 (D. Kan. 2004) (judicial foreclosure is subject to the FDCPA, because it seeks a
personal judgment against the consumer; distinguishing cases finding that non-judicial
foreclosures are not subject to FDCPA); Overton v. Foutty & Foutty, LLP, 1:07-cv-0274-DFH-
TAB, 2007 U.S. Dist. LEXIS 61705 (S.D. Ind. Aug. 21, 2007); Levin v. Kluever & Platt, 03 C
2160, 2003 U.S. Dist. LEXIS 20861, 2003 WL 22757763 (N.D. Ill. Nov. 19, 2003); Shapiro &
Meinhold v. Zartman, 823 P.2d 120 (Colo. 1992).

Decisions answering in the negative, at least if only foreclosure of collateral is

sought: Rosado v. Taylor, 324 F. Supp. 2d 917 (N.D. Ind. 2004) (ruling that issuing a foreclosure
summons and complaint did not amount to an attempt to collect a debt); Hulse v. Ocwen Federal
Bank, FSB, 195 F. Supp. 2d 1188, 1204 (D. Or. 2002) ("[f]oreclosing on a trust deed is distinct
from the collection of the obligation to pay money," and is "not an attempt to collect funds from

11
the debtor," therefore the FDCPA does not apply); Beadle v. Haughey, Civil No. 04-272-SM,
2005 U.S. Dist. LEXIS 2473, 2005 WL 300060, at *3 (D.N.H. Feb. 9, 2005) (attorneys who
"conducted a non-judicial foreclosure, and did not seek judgment against the plaintiffs
personally," were not subject to the FDCPA); Golliday v. Chase Home Fin., LLC, 761 F. Supp. 2d
629 (W.D. Mich. 2011); Gathing v. MERS, Inc., No. 1:09-CV-07, 2010 U.S. Dist. LEXIS 22139,
2010 WL 889945, *13 (W.D. Mich. March 10, 2010).

The contrary decisions were soundly rejected in Glazer v. Chase Home Finance,
LLC, 704 F.3d 453 (6th Cir. 2013), where the court held:

The FDCPA speaks in terms of debt collection. For example, to be liable under the
statute's substantive provisions, a debt collector's targeted conduct must have been
taken “in connection with the collection of any debt,” e.g., 15 U.S.C.
§§1692c(a)-(b), 1692d, 1692e, 1692g, or in order “to collect any debt,” id. § 1692f.
In addition, to be a “debt collector” under the Act, one must either (1) have as his
or her principal business purpose “the collection of any debts” or (2) “regularly
collects or attempts to collect, directly or indirectly, debts owed or due ... another.”
Id. § 1692a(6). Despite the Act's pivotal use of the concept, however, it does not
define debt collection. While the concept may seem straightforward enough,
confusion has arisen on the question whether mortgage foreclosure is debt
collection under the Act. We have not addressed the issue. Nor has the Consumer
Financial Protection Bureau offered an authoritative interpretation on the matter.
See 15 U.S.C. § 1692l (d).4 Other courts have taken varying approaches on the
issue.

The view adopted by a majority of district courts, and the one followed below, is
that mortgage foreclosure is not debt collection. This view follows from the
premise that the enforcement of a security interest, which is precisely what
mortgage foreclosure is, is not debt collection. See, e.g., Rosado v. Taylor, 324
F.Supp.2d 917, 924 (N.D.Ind.2004) (“Security enforcement activities fall outside
the scope of the FDCPA because they aren't debt collection practices[,]” and “[n]o
different rule applies in cases involving real property [.]”); Hulse v. Ocwen Fed.
Bank, 195 F.Supp.2d 1188, 1204 (D.Or.2002). However, if a money judgment is
sought against the debtor in connection with the foreclosure, this view maintains,
there has been debt collection, because there was an attempt to collect money. See,
e.g., McDaniel v. South & Assocs., P. C., 325 F.Supp.2d 1210, 1217–18
(D.Kan.2004). Despite its pervasiveness in the district courts, we find this
approach unpersuasive and therefore decline to follow it.

As with all matters requiring statutory interpretation, we begin with the text.
United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 103
L.Ed.2d 290 (1989). “If the words are plain, they give meaning to the act, and it is
neither the duty nor the privilege of the courts to enter speculative fields in search
of a different meaning.” Caminetti v. United States, 242 U.S. 470, 490, 37 S.Ct.
192, 61 L.Ed. 442 (1917).

Unfortunately, the FDCPA does not define “debt collection,” and its definition of
“debt collector” sheds little light, for it speaks in terms of debt collection. See 15
U.S.C. § 1692a(6); cf. In re Settlement Facility Dow Corning Trust, 628 F.3d 769,
773 (6th Cir.2010) (noting that a definition containing the defined term is not
likely to be helpful). But the statute does offer guideposts. It defines the word
“debt,” for instance, which is “any obligation or alleged obligation of a consumer

12
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[.]” 15 U.S.C. § 1692a(5). The focus on the
underlying transaction indicates that whether an obligation is a “debt” depends not
on whether the obligation is secured, but rather upon the purpose for which it was
incurred. Cf. Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC, 698 F.3d
290, 293 (6th Cir.2012). Accordingly, a home loan is a “debt” even if it is secured.
See Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1216–17,
1218 (11th Cir.2012); Maynard v. Cannon, 401 F. App'x 389, 394 (10th Cir.2010);
Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373, 376 (4th Cir.2006).

In addition, the Act's substantive provisions indicate that debt collection is

performed through either “communication,” id. § 1692c, “conduct,” id. § 1692d, or
“means,” id. §§ 1692e, 1692f. These broad words suggest a broad view of what the
Act considers collection. Nothing in these provisions cabins their applicability to
collection efforts not legal in nature. Cf. Heintz v. Jenkins, 514 U.S. 291, 292, 115
S.Ct. 1489, 131 L.Ed.2d 395 (1995) (holding that “a lawyer who ‘regularly,’
through litigation, tries to collect consumer debts” is a “debt collector” under the
Act). Foreclosure's legal nature, therefore, does not prevent if from being debt
collection.

Furthermore, in the words of one law dictionary: “To collect a debt or claim is to
obtain payment or liquidation of it, either by personal solicitation or legal
proceedings.” Black's Law Dictionary 263 (6th ed.1990). The Supreme Court
relied on this passage when it declared the following in a case concerning the Act's
definition of “debt collector”: “In ordinary English, a lawyer who regularly tries to
obtain payment of consumer debts through legal proceedings is a lawyer who
regularly ‘attempts' to ‘collect’ those consumer debts.” Heintz, 514 U.S. at 294
(emphasis added). Thus, if a purpose of an activity taken in relation to a debt is to
“obtain payment” of the debt, the activity is properly considered debt collection.
Nothing in this approach prevents mortgage foreclosure activity from constituting
debt collection under the Act. See Shapiro & Meinhold v. Zartman, 823 P.2d 120,
124 (Colo.1992) (explaining that “foreclosure is a method of collecting a debt by
acquiring and selling secured property to satisfy a debt”). In fact, every mortgage
foreclosure, judicial or otherwise, is undertaken for the very purpose of obtaining
payment on the underlying debt, either by persuasion (i.e, forcing a settlement) or
compulsion (i.e., obtaining a judgment of foreclosure, selling the home at auction,
and applying the proceeds from the sale to pay down the outstanding debt). As one
commentator has observed, the existence of redemption rights and the potential for
deficiency judgments demonstrate that the purpose of foreclosure is to obtain
payment on the underlying home loan. Such remedies would not exist if
foreclosure were not undertaken for the purpose of obtaining payment. See Eric M.
Marshall, Note, The Protective Scope of the Fair Debt Collection Practices Act:
Providing Mortgagors the Protection They Deserve From Abusive Foreclosure
Practices, 94 Minn. L.Rev. 1269, 1297–98 (2010). Accordingly, mortgage
foreclosure is debt collection under the FDCPA.

Other provisions in the Act reinforce this view. The Act nowhere excludes from its
reach foreclosure or the enforcement of security interests generally. In fact, certain
provisions affirmatively suggest that such activity is debt collection. Section 1692f
prohibits “debt collectors” from using “unfair or unconscionable means” to
“collect any debt.” After stating this general prohibition, the section sets forth a

13
non-exhaustive list of specific activities prohibited thereunder, one of which is
“[t]aking or threatening to take any nonjudicial action to effect dispossession or
disablement of property” if, e.g., “there is no present right to possession of the
property claimed as collateral through an enforceable security interest[.]” 15
U.S.C. § 1692f(6)(A). Foreclosure in some states is carried out in just this
way—through “nonjudicial action,” the result of which is to “effect dispossession”
of the secured property. See, e.g., Mich. Comp. Laws § 600.3204 (authorizing
foreclosure by advertisement only if no lawsuit has been filed to recover the
underlying debt); Tenn.Code Ann. § 35–5–101 (permitting foreclosure by
advertisement). The example's presence within a provision that prohibits unfair
means to “collect or attempt to collect any debt” suggests that mortgage
foreclosure is a “means” to collect a debt.

Consider also § 1692i. This section requires a debt collector bringing a legal action
against a consumer “to enforce an interest in real property securing the consumer's
obligation”—e.g., a mortgage foreclosure action—to file in the judicial district
where the property is located. 15 U.S.C. § 1692i(a)(1). Although the provision
itself does not speak in terms of debt collection, it applies only to “debt collectors”
as defined in the first sentence of the definition, id. § 1692a(6), which does speak
in terms of debt collection. This suggests that filing any type of mortgage
foreclosure action, even one not seeking a money judgment on the unpaid debt, is
debt collection under the Act.

Our holding today is supported by decisions from our sister circuits. . . .

Courts that hold that mortgage foreclosure is not debt collection offer different
reasons for this view. Some reason that the FDCPA is concerned only with
preventing abuse in the process of collecting funds from a debtor, and that
foreclosure is distinct from this process because “payment of funds is not the
object of the foreclosure action.” Hulse, 195 F.Supp.2d at 1204. We disagree.
There can be no serious doubt that the ultimate purpose of foreclosure is the
payment of money.

Some courts that hold mortgage foreclosure to be outside the Act rely principally
on the definition of “debt collector.” After defining a “debt collector” as one
whose principal business purpose is the “collection of any debts” or who
“regularly” collect debts, the definition's third sentence states: “For the purpose of
section 1692f(6) of this title, such term also includes any person who uses any
instrumentality of interstate commerce or the mails in any business the principal
purpose of which is the enforcement of security interests.” 15 U.S.C. § 1692a(6).
One who satisfies the first sentence is a debt collector for all sections of the Act,
but one satisfying only the third sentence is a “debt collector” limited to § 1692f(6)
(concerning non-judicial repossession abuses). See Kaltenbach, 464 F.3d at 528;
Montgomery, 346 F.3d at 699–701. Therefore, these courts reason, “if the
enforcement of a security interest was synonymous with debt collection, the third
sentence would be surplusage because any business with a principal purpose of
enforcing security interests would also have the principal purpose of collecting
debts.” Gray v. Four Oak Court Ass'n, Inc., 580 F.Supp.2d 883, 888
(D.Minn.2008). To avoid this result, these courts conclude that the enforcement of
a security interest, including mortgage foreclosure, cannot be debt collection. Id.

We reject this reading of the statute. The third sentence in the definition does not

14
except from debt collection the enforcement of security interests; it simply
“make[s] clear that some persons who would be without the scope of the general
definition are to be included where § 1692f(6) is concerned.” Piper, 396 F.3d at
236; see Shapiro & Zartman, 823 P.2d at 124. It operates to include certain persons
under the Act (though for a limited purpose); it does not exclude from the Act's
coverage a method commonly used to collect a debt. As the Third Circuit
explained in Piper,

[e]ven though a person whose business does not primarily involve the
collection of debts would not be a debt collector for purposes of the Act
generally, if his principal business is the enforcement of security interests,
he must comply with the provisions of the Act dealing with non-judicial
repossession abuses. Section 1692a(6) thus recognizes that there are people
who engage in the business of repossessing property, whose business does
not primarily involve communicating with debtors in an effort to secure
payment of debts.
Piper, 396 F.3d at 236. And, in the words of the Fourth Circuit, “[t]his provision
applies to those whose only role in the debt collection process is the enforcement
of a security interest.” Wilson, 443 F.3d at 378.

Other than repossession agencies and their agents, we can think of no others whose
only role in the collection process is the enforcement of security interests. A
lawyer principally engaged in mortgage foreclosure does not meet this criteria, for
he must communicate with the debtor regarding the debt during the foreclosure
proceedings, regardless of whether the proceedings are judicial or non-judicial in
nature. See, e.g., Mich. Comp. Laws § 600.3205a(1) (requiring the foreclosing
party to serve on the borrower before commencing a foreclosure-by-advertisement
a written notice containing information about the underlying obligation and stating
how to avoid foreclosure); Tenn.Code Ann. § 35–5–101(e) (same); cf. Reese, 678
F.3d at 1217 (noting that a foreclosure notice serves more than one purpose). See
also Shapiro & Meinhold, 823 P.2d at 124 (noting that “attorneys are not exempt
[from the Act] merely because their collection activities are primarily limited to
foreclosures”). Not so for repossessors, who typically “enforce” a security
interest—i.e., repossess or disable property—when the debtor is not present, in
order to keep the peace.
Finally, the fact that the only provision of the Act applicable to those who satisfy
the third sentence in the definition (but not the first sentence) concerns
non-judicial repossessions—precisely the business of repossessors—also suggests
that the sentence applies only to repossessors. Indeed, all of the cases we found
where §§ 1692f(6) and 1692a(6)'s third sentence were held applicable involved
repossessors. See, e.g., Montgomery, 346 F.3d at 700 (agreeing that “those who
enforce security interests, such as repossession agencies, fall outside the ambit of
the FDCPA,” except for the purposes of § 1692f(6) (emphasis added)); Nadalin v.
Auto. Recovery Bureau, Inc., 169 F.3d 1084, 1085 (7th Cir.1999) (noting that
“repossessors” must comply with § 1692f(6)); James v. Ford Motor Credit Co., 47
F.3d 961, 962 (8th Cir.1995) (noting that “a few provisions of the Act subject
repossession companies to potential liability when they act in the enforcement of
others' security interests”); Jordan v. Kent Recovery Servs., 731 F.Supp. 652, 657
(D.Del.1990).

15
 For these reasons, we hold that mortgage foreclosure is debt collection under the
Act. Lawyers who meet the general definition of a “debt collector” must comply
with the FDCPA when engaged in mortgage foreclosure. And a lawyer can satisfy
that definition if his principal business purpose is mortgage foreclosure or if he
“regularly” performs this function. . . .

Foreclosure should be covered – lender presumably wants debtor to pay, not

surrender property. We have rarely seen foreclosure not accompanied by some effort to modify,
restructure, induce sale, or otherwise collect money. Section 1692f(6) was intended to cover
repossessors of vehicles and similar collateral who try not to have any contact with the debtor.

In any event, if defendant regularly seeks deficiencies, it is a debt collector

regardless of whether it is doing so in the particular case. In Kaltenbach v. Richards, 464 F.3d
524 (5th Cir. 2006), the defendant, an attorney hired to conduct an executory process foreclosure,
argued that because he was enforcing a security interest, he was not a debt collector under the
FDCPA except for purposes of § 1692f(6). The Fifth Circuit disagreed, noting that under §
1692a(6), "a party's general, not specific, debt collection activities are determinative of whether
they meet the statutory definition of a debt collector." 464 F.3d at 529. See Brooks v. Flagstar
Bank, No. 11-67, 2011 U.S.Dist. LEXIS 74676 (E.D.La., July 12, 2011); Overton v. Foutty &
Foutty, LLP, 1:07-cv-0274-DFH- TAB, 2007 U.S. Dist. LEXIS 61705 (S.D. Ind. Aug. 21, 2007).
7. MASS MAILERS

Several decisions held that companies which provide debt collectors with the
service of generating and mailing large numbers of form letters, but do not participate in the
composition of the letters and are not compensated based on the amounts received, are not debt
collectors. Trull v. Lason Systems, 982 F.Supp. 600 (N.D. Ill. 1997); Laubach v. Arrow Service
Bureau, 987 F.Supp. 625 (N.D. Ill. 1997); Lockemy v. Comprehensive Collection Servs., 97 C
1180, 1998 WL 832655, 1998 U.S. Dist. LEXIS 18887 (N.D.Ill., Nov. 20, 1998). A related
decision held that Western Union is not a "debt collector" where all it does is transmit a collection
message. Aquino v. Credit Control Services, 4 F.Supp.2d 927 (N.D.Cal. 1998). However, the
Ninth Circuit has held that Western Union could be a "debt collector" as a result of furnishing its
"Automated Voice Telegram" service. Romine v. Diversified Collection Services, 155 F.3d 1142
(9th Cir. 1998).
8. CREDITORS THAT USE MASS MAILERS

It should follow from the last point that where a creditor hires a company that
merely mails letters without further collection activity, or otherwise engages in conduct not
sufficient to make it a debt collector, and the name of the mailer or another third party is used on
the mailings, the creditor is both (a) making itself a debt collector under the §1692a(6) proviso
and (b) engaging in deceptive collection efforts in violation of §1692e.
9. REPOSSESSORS

Except for purposes of 15 U.S.C. §1692f(6), repossession agencies are not debt
collectors within the FDCPA unless they perform common collection services, such as sending
dunning letters, demanding money, making telephone calls, etc. Jordan v. Kent Recovery Servs.,
731 F.Supp. 652 (D.Del. 1990); Larranaga v. Mile High Collection and Recovery Bureau, Inc.,
807 F.Supp. 111 (D.N.M. 1992); Colton v. Ford Motor Credit Co., No. 3916, 1986 Ohio App.
LEXIS 7797, 1986 WL 8538 (Ohio App., July 30, 1986). The fact that the repossessed property is
sold and applied to the debt is not enough. Tucker v. RAW Recovery, Inc., 4:97CV00346, 1998

16
U.S. Dist. LEXIS 20162 (M.D.N.C. Oct. 28, 1998).

An unusual Seventh Circuit decision holds that the imposition of a modest fee
($25) by a repossessor does not violate the FDCPA. Nadalin v. Automobile Recovery Bur., Inc.,
169 F.3d 1084 (7th Cir. 1999).

10. FIELD AGENTS

“Field agents” who work for creditors, particularly in connection with automobile
and mortgage debts, and who visit consumers for the purpose of delivering communications and
inducing them to communicate with the creditor, are “debt collectors.” Siwulec v. J.M.
Adjustment Servs., LLC, No. 11-2086, 2012 U.S. App. LEXIS 4201, 465 Fed.Appx. 200 (3rd Cir.
March 1, 2012); Simpson v. Safeguard Properties, L.L.C., No. 13 C 2453, 2013 WL 2642143
(N.D.Ill., June 12, 2013). See also, Cirkot v. Diversified Fin. Sys., 839 F. Supp. 941 (D.Conn.
1993), where FDCPA liability was based on the actions of a “Special Investigator” who placed a
note in the plaintiff's mail box, stating on the envelope “ Urgent - Open Immediately" and on the
note “Read my card - I will be handling your case & this area. If you wish not to[,] call
1-800-851-4863 Scott Beatty to settle[.] My special agents will remain in our area to collect.
Believe me. Call within 24 hours.”

III. WHAT IS A "DEBT"

"Debt" is defined as "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." 15 U.S.C. §1692a(5) (emphasis added).
The key elements in this definition are “consumer,” which is "any natural person obligated or
allegedly obligated to pay any debt," 15 U.S.C. §1692a(3); a “transaction,” which excludes
certain non-consensual obligations; and “personal, family or household purposes.” In addition,
the effect of the definition of “debt collector” and the exclusions to that definition is to limit the
scope of the FDCPA to debts which are actually or allegedly delinquent when the “debt collector”
first becomes involved with them.

Business and agricultural loans are therefore not "debts" covered by the FDCPA.
Bloom v. I.C. System, Inc., 972 F.2d 1067 (9th Cir. 1992) (business loan); Munk v. Federal Land
Bank, 791 F.2d 130 (10th Cir. 1986) (agricultural loan); Kicken v. Valentine Production Credit
Ass'n, 628 F. Supp. 1008 (D. Neb. 1984), aff'd mem., 754 F.2d 378 (8th Cir. 1984)(agricultural
loan).

A personal guaranty of a business loan is also not covered. Ranck v. Fulton

Bank, 93-1512, 1994 U.S. Dist. LEXIS 1402, 1994 WL 37744 (E.D. Pa. 1994).

Condominium and homeowners’ association assessments on property acquired for

personal, family or household purposes are FDCPA debts. Newman v. Boehm, Pearlstein &
Bright, 119 F.3d 477 (7th Cir. 1997); Ladick v. Van Gemert, 146 F.3d 1205 (10th Cir. 1998);
Thies v. Law Offices of William A. Wyman, 969 F. Supp. 604 (S.D.Cal. 1997); Taylor v. Mount
Oak Manor Homeowners Ass'n, 11 F.Supp.2d 753 (D.Md. 1998); Garner v. Kansas, 98-1274,
1999 WL 262100, 1999 U.S. Dist. LEXIS 6430 (E.D.La., Apr. 30, 1999). Because of the
definition of “debt collector,” a management company that collects such assessments prior to
default is not covered by the FDCPA, but a lawyer or collection agency who duns or sues to

17
enforce defaulted assessments is.

Rent for a residential apartment is a “debt” covered by the FDCPA. Romea v.

Heiberger & Associates, 163 F.3d 111 (2d Cir. 1998); Wright v. BOGS Management, Inc., 98 C
2788, 2000 WL 1774086, *17 (N.D.Ill., Dec. 1, 2000). The statutory notice in a summary
eviction action, if given by a debt collector, is subject to the FDCPA, regardless of whether the
landlord seeks back rent or merely to evict for nonpayment. Romea v. Heiberger & Associates,
supra. Again, because of the definition of “debt collector,” a management company or landlord
that collects rent before it is delinquent is not covered by the FDCPA, but a collection agency or
lawyer that receives the claim after the rent is overdue is covered. Also, the failure of a five-day
notice to comply with the FDCPA does not invalidate it; it merely gives rise to a claim against the
debt collector. Dearie v. Hunter, 183 Misc.2d 336, 705 N.Y.S.2d 519 (App. T. 1st Dept. 2000).

Tort claims by a third party with which the consumer has no contractual
relationship are not covered because there is no “transaction.” Hawthorne v. MAC Adjustment,
Inc., 140 F.3d 1367 (11th Cir. 1998). Other courts have held that the FDCPA does not apply to
claims for statutory damages for shoplifting, Shorts v. Palmer, 155 F.R.D. 172 (S.D.Ohio 1994),
and claims arising from the illegal reception of microwave television signals are also not within
the definition of "debt". Zimmerman v. H.B.O. Affiliate Group, 834 F.2d 1163 (3d Cir. 1987).

However, the fact that a claim arising out of a transaction by a consumer is cast in
terms of a tort or statutory violation rather than breach of contract does not deprive the consumer
of the protection of the FDCPA when collection agencies or collection lawyers ask the consumer
to pay. Brown v. Budget Rent-A-Car Systems, Inc.,119 F.3d 922 (11th Cir. 1997) (a claim by a
rental company against a consumer for damage to a car that the consumer rented is a “debt”
whether brought as a claim for breach of the rental agreement or as one for negligent damage to
property).

Thus, it is now settled that dishonored checks are covered, even if liability is based
on a bad check statute rather than the contract (check). Bass v. Stolper, Koritzinsky, Brewster &
Neider, S.C., 111 F.3d 1322 (7th Cir. 1997); Ryan v. Wexler & Wexler, 113 F.3d 400 (7th Cir.
1997); Charles v. Lundgren & Associates, P.C., 119 F.3d 739 (9th Cir. 1997); Duffy v. Landberg,
133 F.3d 1120 (8th Cir. 1998); Snow v. Riddle, 143 F.3d 1350 (10th Cir. 1998); Hawthorne v.
MAC Adjustment, Inc., 140 F.3d 1367 (11th Cir. 1998); FTC v. Check Investors, Inc., 502 F.3d
159 (3rd Cir. 2007). Check guaranty companies are statutory "debt collectors" because the check
was in default at the time it was acquired by the guaranty company. Ballard v. Equifax Services,
Inc., 27 F.Supp.2d 1201 (E.D.Cal. 1998); Holmes v. Telecredit Services Corp., 736 F.Supp.
1289, 1291-94 (D.Del. 1996); Winterstein v. CrossCheck, Inc., 149 F.Supp.2d 466 (N.D.Ill.
2001).

The statutory liability of a prior endorser on a check which is deposited or cashed

and returned for insufficient funds may not be a "debt," if there is no purchase of goods or
services for consumer purposes. Perez v. Slutsky, 94 C 6137, 1994 U.S.Dist. LEXIS 17711, 1994
WL 698519 (N.D.Ill. 1994). However, Perez was rejected in Byes v. Telecheck Recovery
Serv., 94-3182, 1997 WL 736692, 1997 U.S. Dist. LEXIS 18892 (E.D.La., Nov. 24, 1997). Also,
in the unpublished decision in Broadnax v. Greene Credit Service, No. 95-3829, 1997 U.S. App.
LEXIS 776 (6th Cir. Jan. 15, 1997), a businessman issued a check to pay a contractor and then
prevented its negotiation because of a complaint about the work. The contractor negotiated the
check to a merchant to pay a personal debt. The court held that the businessman was protected by
the FDCPA when a debt collector for the merchant falsely accused him of passing a bad check,
reasoning that “the defendants had attempted to collect a consumer obligation through the use of
an arguably abusive, deceptive, and unfair debt collection practice (or practices).”

18
 An Eastern District of Pennsylvania decision rejected a debt collector's contention
that a medical bill was not a "debt" because it should have been paid by the patient's insurance
carrier. Adams v. Law Offices of Stuckert & Yates, 926 F.Supp. 521, 526 (E.D.Pa. 1996): "Mr.
Adams was the party ultimately liable for retiring the debt. Whether he retires the debt with
funds from his checking account or pursuant to his contract with a health insurance carrier is of
no moment."

Liabilities for taxes are not considered "debts" within the FDCPA. Staub v.
Harris, 626 F.2d 275 (3d Cir. 1980) (per capita tax is not a debt as defined by the FDCPA);
Coretti v. Lefkowitz, 965 F. Supp. 3 (D. Conn. 1997); Beggs v. Rossi, 994 F. Supp. 114(D. Conn.
1997), aff'd, 145 F.3d 511 (2d Cir. 1998) (personal property taxes are not debt as defined by the
FDCPA); Berman v. GC Services, LP, 97 C 489, 1997 WL 392209, 1997 U.S.Dist. LEXIS 9558
(N.D. Ill. June 30, 1997), aff'd, 146 F.3d 482 (7th Cir. 1998) (taxes are not covered even if they
are imposed on the basis of a "transaction").

One court has held that a fine for failing to return a library book is not a debt.
Riebe v. Juergensmeyer & Assoc., 979 F.Supp. 1218 (N.D. Ill. 1997). This seems to be a close
case, in part dependent on the absence of any required payment for the basic loan of the book.
The court suggested that if there had been a charge for borrowing a DVD or video, there would
have been a debt. Certainly, if one pays to rent goods for nonbusiness purposes and there is an
extra charge for late return or late payment, both the basic rental and the extra charge are a
“debt.”

Charges for water and sewer service originally owed to a municipality and
purchased by a buyer of bad debts were "debts" subject to the FDCPA, although property tax
obligations are not. Pollice v. National Tax Funding, LP, 225 F.3d 379 (3rd Cir. 2000).

Fines for moving violations are not “debts.” Reid v. American Traffic Solutions,
Inc., 10-cv-204-JPG-DGW and 10-cv-269-JPG, 2010 U.S. Dist. LEXIS 134518 (S.D.Ill.,
December 20, 2010). Parking tickets have also been held not to constitute “debts”, at least where
the fine was imposed for “parking one's vehicle in an unauthorized location,” Graham v. ACS
State & Local Solutions, Inc., No. 06-2708 (JNE/JJG), 2006 U.S. Dist. LEXIS 73973, 2006 WL
2911780, at *2 (D. Minn. Oct. 10, 2006), and automobile impoundment and storage fees are not
debts, Betts v. Equifax Credit Information Servs., Inc., 245 F. Supp. 2d 1130, 1133-34 (W.D.
Wash. 2003). On the other hand, a fee owed for the privilege of parking in an unmanned parking
lot is a “debt.” Hansen v. Ticket Track, Inc., 280 F. Supp. 2d 1196, 1203 (W.D. Wash. 2003).
The fact that the creditor is a governmental entity does not take essentially contractual obligations
outside the definition of “debt.” Pollice v. National Tax Funding, LP, supra, 225 F.3d 379 (3rd
Cir. 2000).

Yazo v. Law Enforcement Systems, Inc., No. CV 08-03512 DDP (AGRx), 2008
WL 4852965 (C.D.Cal., Nov. 7, 2008), addressed toll road charges. The court held that a fine for
using a toll road without payment is akin to a penalty for theft and is not covered. The court left
open the possibility that one who has a contract for using the road but is assessed a fine may be
protected by the FDCPA.

Liabilities for child support obligations are not considered "debts" within the
FDCPA. Mabe v. GC Services, L.P., 32 F.3d 86 (4th Cir. 1994); Battye v. Child Support Servs.,
873 F. Supp. 103 (N.D.Ill. 1994); Brown v. Child Support Advocates, 878 F. Supp. 1451 (D.Utah.
1994); Jones v. U.S. Child Support Recovery, 961 F.Supp. 1518 (D.Utah 1997).
IV. OTHER STATUTORY DEFINITIONS

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 1. WHAT IS A “COMMUNICATION”

Certain important substantive prohibitions of the FDCPA apply to

"communications." These include §§1692c and several subdivisions of §1692e. A
"communication" is defined as "the conveying of information regarding a debt directly or
indirectly to any person through any medium." 15 U.S.C. §1692a(2). Usually this takes the form
of dunning letters or telephone calls. However, the term is broadly and literally construed to
encompass other forms of conveying information as well. Tolentino v. Friedman, 833 F.Supp.
697 (N.D.Ill. 1993), aff'd in part and rev'd in part, 46 F.3d 645 (7th Cir. 1995) (debt collector sent
consumers a copy of the summons and complaint prior to service accompanied by an
"IMPORTANT NOTICE" discussing the consequences of filing bankruptcy).

A “communication” need not refer to the debt. For example, a request for
financial information for the purpose of restructuring or modifying a loan is a “communication,”
even if there is no "explicit demand for payment." Gburek v. Litton Loan Servicing LP, 614
F.3d 380 (7th Cir. 2010).

A voicemail message is a “communication” within the meaning of 15 U.S.C.

§§1692d(6) and 1692e, even if it merely requests a return call. Edwards v. Niagara Credit
Solutions, Inc., 584 F.3d 1350 (11th Cir. 2009); Foti v. NCO Financial Systems, 424 F.Supp.2d
643, 669 (S.D.N.Y. 2006); Hosseinzadeh v. M.R.S. Associates, Inc., 387 F.Supp.2d 1104, 1112,
1118 (C.D.Cal. 2005); Krapf v. Collectors Training Institute of Illinois, Inc., 09-CV-391S, 2010
U.S. Dist. LEXIS 13063 (W.D.N.Y., February 16, 2010); Mark v. J. C. Christensen & Assocs.,
09-100, 2009 U.S.Dist. LEXIS 67724 (D.Minn. Aug. 4, 2009); Widman v. Monterey Fin. Servs.,
08-1331, 2009 U.S.Dist. LEXIS 38824 (W.D.Pa., May 7, 2009); Thomas v. Consumer Adjustment
Co., 579 F.Supp.2d 1290, 1296-97 (E.D.Mo. 2008); Ramirez v. Apex Financial Mgmt., LLC, 567
F.Supp.2d 1035, 1041 (N.D.Ill. 2008); Chalik v. Westport Recovery Corp., 09-60819-CIV, 2009
U.S. Dist. LEXIS 122029 (S.D.Fla., October 30, 2009); Inman v. NCO Financial Systems, Inc.,
08-5866, 2009 U.S. Dist. LEXIS 98215 (E.D.Pa., October 21, 2009); Pollock v. Bay Area Credit
Serv., LLC, 08-61101-Civ, 2009 U.S. Dist. LEXIS 71169 (S.D.Fla., August 13, 2009); Drossin v.
Nat'l Action Fin. Servs., 641 F. Supp. 2d 1314 (S.D.Fla. 2009); Joseph v. J. J. MacIntyre Cos.,
281 F.Supp.2d 1156 (N.D.Cal. 2003); Stinson v. Asset Acceptance, LLC, 1:05cv1026, 2006 WL
1647134, 2006 U.S. Dist. LEXIS 42266 (E.D. Va., June 12, 2006); Belin v. Litton Loan Servicing,
LP, 8:06-cv-760-T-24 EAJ, 2006 WL 1992410, 2006 U.S. Dist. LEXIS 47953 (M.D.Fla., July 14,
2006); Knoll v. Allied Interstate, Inc., 502 F. Supp. 2d 943, 946 (D.Minn. 2007) (“a debt collector
violates § 1692d(6) if the collector leaves an answering machine message under an alias and fails
to disclose that the call is related to debt collection”); Knoll v. IntelliRisk Mgmt. Corp., Civil No.
06-1211 (PAM/JSM), 2006 U.S. Dist. LEXIS 77467 (D.Minn., October 16, 2006) (similar);
Gryzbowski v. I.C. System, Inc., 3:cv-08-1884 (M.D.Pa. March 5, 2010); Pawelczak v.
Nations Recovery Center, Inc., No. 11 C 3700, 2012 U.S. Dist. LEXIS 82916 (N.D.Ill., June 14,
2012). See Horkey v. J.V.D.B. & Associates, Inc., 333 F.3d 769, 774 (7th Cir. 2003) (message left
with coworker).

In Marx v. General Revenue Corp., 668 F.3d 1174 (10th Cir. 2011), the court held
that an “employment verification” sent to a consumer’s employer was not a “communication”
relating to a debt. “The facsimile was sent in September 2008 to Ms. Marx's employer as part of
GRC's inquiry into Marx's eligibility for [administrative] wage garnishment. When a GRC agent
called Ms. Marx's employer to verify her employment status, the agent was told to make the
request in writing. . . . GRC sent its standard employment verification form. This form displays
GRC's name, logo, address, and phone number, and bears an "ID" number representing GRC's
internal account number for Ms. Marx. The form indicates that its purpose is to "verify

20
[e]mployment" and to "[request] employment information"; blanks are left for the employer to fill
in the individual's employment status, date of hire, corporate payroll address, and position, and to
note whether the individual works full- or part-time.” The court reasoned that “absent any
evidentiary showing that Ms. Marx's employer either knew or inferred that the facsimile involved
a debt, the facsimile does not satisfy the statutory definition of a "communication." A party may
seek to verify employment status (without hinting at a debt) for any number of reasons, including
as part of processing a mortgage, conducting a background check before hiring, or determining
eligibility for an extension of credit.” The plaintiff “did not call any witnesses from her
employer's office to testify as to what they inferred from the facsimile.”
2. WHO IS ENTITLED TO SUE

The FDCPA applies to "consumer" debts, and certain substantive provisions, e.g.,
§1692c(a), only protect "consumers." A "consumer" is "any natural person obligated or allegedly
obligated to pay any debt." 15 U.S.C. §1692a(3). The consumer's executrix has standing to bring
an FDCPA action. Wright v. Finance Service of Norwalk, Inc., 22 F.3d 647 (6th Cir. 1994) (en
banc); Riveria v. MAB Collections, Inc., 682 F.Supp. 174 (W.D.N.Y. 1988).

It should be noted that certain substantive protections of the FDCPA are not
limited to "consumers," e.g., §1692e. West v. Costen, 558 F.Supp. 564 (W.D.Va. 1983); Villareal
v. Snow, 95 C 2484, 1996 WL 28254, 1996 WL 28282, 1996 U.S. Dist. LEXIS 667, *6 (N.D.Ill.
Jan. 19, 1996); Whatley v. Universal Collection Bureau, 525 F.Supp. 1204, 1205-6 (N.D.Ga.
1981). Persons who do not in fact owe money but who are subjected to improper practices by
debt collectors are entitled to the protection of the FDCPA. Dutton v. Wolhar, 809 F.Supp. 1130,
1134-5 (D.Del. 1992); Flowers v. Accelerated Bureau of Collections, 96 C 4003, 1997 U.S.Dist.
LEXIS 3354, 1997 WL 136313 (N.D.Ill. Mar 19, 1997), later opinion, 1997 WL 224987, 1997
U.S. Dist. LEXIS 6070 (N.D. Ill. Apr. 30, 1997); Riveria v. MAB Collections, Inc., 682 F.Supp.
174, 175 (W.D.N.Y. 1988) ("any person who comes in contact with proscribed debt collection
practices may bring a claim"); Thomas v. Consumer Adjustment Co., 579 F. Supp. 2d 1290, 1298
(E.D. Mo. 2008); Conboy v. AT&T Corp., 84 F. Supp. 2d 492, 504 n.9 (S.D.N.Y. 2000); Dewey v.
Associated Collectors, Inc., 927 F. Supp. 1172, 1174-75 (W.D. Wis. 1996); Johnson v. Bullhead
Invs., LLC, 1:09CV639, 2010 U.S. Dist. LEXIS 2382 (M.D.N.C., January 11, 2010) (“Because
the plain language of Section 1692k does not limit recovery to ‘consumers,’ courts have
recognized that under certain circumstances, third-party, non-debtors may have standing to bring
claims under the FDCPA”).

There is ample authority that nondebtors have standing to bring a §1692d claim.
See 15 U.S.C. §1692d ("A debt collector may not engage in any conduct the natural consequence
of which is to harass, oppress or abuse any person...")(bold emphasis added); Meadows v.
Franklin Collection Service, Inc., No. 10-13474, 2011 WL 479997, 2011 U.S. App. LEXIS 2779
(11th Cir. Feb. 11, 2011) (unpublished) (reversing grant of summary judgment to debt collector
on a § 1692d(5) claim brought by a nondebtor); Whatley v. Universal Collection Bureau, Inc.,
525 F.Supp. 1204 (N.D. Ga. 1981) (holding that nondebtors may bring claims for violations of
§1692d); Montgomery v. Huntington Bank, 346 F.3d 693 (6th Cir. 2003).
V. LEAST SOPHISTICATED OR UNSOPHISTICATED CONSUMER STANDARD

Most courts have held that whether a communication or other conduct violates the
FDCPA is to be determined by analyzing it from the perspective of the "least sophisticated
debtor." Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993); Taylor v. Perrin, Landry, de Launay
& Durand, 103 F.3d 1232 (5th Cir. 1997); Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir.
1991); Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1028-29 (6th Cir. 1992); Swanson v.

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Southern Oregon Credit Service, Inc., 869 F.2d 1222, 1225-26 (9th Cir. 1988); Clark v. Capital
Credit & Collection Services, Inc., 460 F.3d 1162, 1171 (9th Cir. 2006); Jeter v. Credit Bureau,
Inc., 760 F.2d 1168 (11th Cir. 1985); Russey v. Rankin, 911 F. Supp. 1449 (D.N.M. 1995);
Bukumirovich v. Credit Bureau of Baton Rouge, Inc., 155 F.R.D. 146 (M.D.La. 1994); United
States v. National Financial Servs., 820 F. Supp. 228, 232 (D.Md. 1993), aff'd, 98 F.3d 131, 135
(4th Cir. 1996); Moore v. Ingram & Assocs., 805 F. Supp. 7 (D.S.C. 1992). "The basic purpose of
the least-sophisticated-consumer standard is to ensure that the FDCPA protects all consumers, the
gullible as well as the shrewd." Clomon, supra.

The Seventh Circuit has held that a violation should be determined from the
perspective of the "unsophisticated consumer." Gammon v. GC Services L.P., 27 F.3d 1254 (7th
Cir. 1994). Since the "least sophisticated consumer" has never been interpreted to impose
liability for bizarre or idiosyncratic interpretations of collection demands, it does not appear that
the difference in language represents a significant difference in substance. This was confirmed by
later Seventh Circuit decisions, Avila v. Rubin, 84 F.3d 222 (7th Cir. 1996); Durkin v. Equifax
Check Servs. Inc., 406 F.3d 410 (7th Cir. 2005) . The Eighth Circuit agrees. Strand v. Diversified
Collection Serv., Inc., 380 F.3d 316 (8th Cir. 2004).

The Fifth Circuit, perceiving no substantial difference between the two standards,
has declined to select between them. McKenzie v. E.A. Uffman & Assoc., Inc.,119 F.3d 358 (5th
Cir. 1997).

The Seventh Circuit has also held that where the representation is communicated
to the debtor’s attorney, the test is whether a competent lawyer would be deceived by a
misleading statement, or whether there was a false statement of fact. Evory v. RJM Acquisitions
Funding L.L.C., 505 F.3d 769 (7th Cir. 2007). The fact that a communication is sent to the
consumer’s attorney does not preclude it from being a communication. Rosario v. American
Corrective Counseling Services, 2:01-CV-221, 2001 WL 1045585 (M.D.Fla. Aug. 27, 2001).

It is not necessary to show that the plaintiff was actually misled by a collection
notice. Avila v. Rubin, 84 F.3d at 227 (7th Cir. 1996); Bartlett v. Heibl, 128 F.3d 497 (7th Cir.
1997).

However, some courts have recently required that a misrepresentation or omission

be material to the unsophisticated or least sophisticated consumer. Wahl v. Midland Credit
Mgmt., 556 F.3d 643 (7th Cir. 2009); Hahn v. Triumph P'ships LLC, 557 F.3d 755, 757 (7th Cir.
2009); Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 596 (6th Cir. 2009); Donohue v. Quick
Collect, Inc., 592 F.3d 1027 (9th Cir. 2010); Corazzini v. Litton Loan Servicing LLP,
1:09-cv-199 (MAD/ATB), 2011 U.S. Dist. LEXIS 63565 (N.D.N.Y. June 15, 2011).

“Statements are material if they influence a consumer's decision--to pay a debt in

response to a dunning letter, for example, see Muha, 558 F.3d at 628--or if they would impair the
consumer's ability to challenge the debt at issue. See Berg v. Blatt, Hasenmiller, Leibsker &
Moore LLC, No. 07 C 4887, 2009 U.S. Dist. LEXIS 26808, 2009 WL 901011, at *7 (N.D. Ill.
Mar. 31, 2009). AFNI's false statements are material in both related senses; AFNI's statements
that it is "unable to investigate" a consumer's dispute due to "insufficient information" both
impair the consumer's ability to challenge the debt at issue and influence his or her decision to
pay the debt.“ Hale v. AFNI, Inc., No. 08 CV 3918, 2010 U.S. Dist. LEXIS 6715, *22 (N.D.Ill.,
Jan. 26, 2010). Correct identification of the debt collector and the owner of the debt is “material.”
Wallace v. Wash. Mut. Bank, F.A., 683 F.3d 323 (6th Cir. 2012).

All conduct specifically prohibited or disclosures specifically required by the

22
FDCPA is “material.” Mark v. J. C. Christensen & Assoc., Inc., 09-100, 2009 U.S.Dist. LEXIS
67724, *11 (D.Minn. Aug. 4, 2009); Warren v. Sessoms & Rogers, P.A., 676 F.3d 365, 374 (4th
Cir. 2012) (violations of 1692e(11) are always “material”). For example, disclosing the present
owner of the debt is specifically required and should always be “material.” Wallace v.
Washington Mutual Bank, F.A., 683 F.3d 323 (6th Cir. 2012).

Under either the "least sophisticated" or "unsophisticated" consumer standard, a

collection communication which can plausibly be read in two or more ways, at least one of which
is misleading, violates the law. Russell v. Equifax A.R.S., 74 F.3d 30, 35 (2d Cir. 1996). Accord
Wilson v. Quadramed Corp., 225 F.3d 350, 354 (3rd Cir. 2000); Campuzano-Burgos v. Midland
Credit Management, Inc., 550 F.3d 294, 298 (3rd Cir. 2008) (violation if communication “can be
reasonably read to have two or more different meanings, one of which is inaccurate”); Gonzales
v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1062 (9th Cir. 2011)(“it is well established that ‘[a]
debt collection letter is deceptive where it can be reasonably read to have two or more different
meanings, one of which is inaccurate.’”); Kistner v. Law Offices of Michael P. Margelefsky, LLC,
518 F.3d 433, 441 (6th Cir. 2008); Melillo v. Shendell & Assocs., P.A., Case No. 11-62048-CIV-
COHN/SELTZER, 2012 U.S. Dist. LEXIS 9248, *13 (S.D.Fla., Jan. 26, 2012) ("[a] debt
collection letter is deceptive where it can be reasonably read to have two or more different
meanings, one of which is inaccurate."); Nichols v. Northland Groups, Inc., Nos. 05 C 2701, 05 C
5523, 06 C 43, 2006 U.S. Dist. LEXIS 15037 (N.D.Ill., March 31, 2006) ("[A] collection notice is
deceptive when it can be reasonably read to have two or more different meanings, one of which is
inaccurate."); Creighton v. Emporia Credit Serv., 3:97CV171, 1997 U.S. Dist. LEXIS 8556, *7
(E.D.Va., May 28, 1997) (“"a collection notice is deceptive when it can be reasonably read to
have two or more different meanings, one of which is inaccurate."). See Gionis v. Javitch, Block
& Rathbone, LLP, Nos. 06-3048 & 06-3171, 238 Fed. Appx. 24; 2007 U.S. App. LEXIS 14054
(6th Cir., June 6, 2007), aff’g, Gionis v. Javitch, Block & Rathbone, 405 F. Supp. 2d 856 (S.D.
Ohio, 2005): “Javitch's failure to assert the attorney fees language in the complaint's ‘prayer of
relief’ section does not cure the threat. See Veach v. Sheeks, 316 F.3d 690, 693 (7th Cir. 2003)
("When there are two different accounts of what a debtor actually owes the creditor, that one
version is the correct description does not save the other . . . under the unsophisticated debtor
standard . . . .").” See also, Chrysler Corp. v. FTC, 182 U.S. App. D.C. 359, 561 F. 2d 357 (D.C.
Cir. 1977) (an advertisement is considered deceptive if it has the capacity to convey misleading
impressions to consumers even though nonmisleading interpretations may be possible).
VI. VIOLATIONS – VALIDATION OR VERIFICATION NOTICE

One of the most important rights conferred by the FDCPA is the debtor's right to
"validation" or "verification" of a debt under § 1692g. "This provision will eliminate the
recurring problem of debt collectors dunning the wrong person or attempting to collect debts
which the consumer has already paid." Sen.R. No. 95-382, 95th Cong., 1st. Sess., p. 4, reprinted
in 1977 USCCAN 1695, 1698. Under 15 U.S.C. §1692g:
§ 1692g. Validation of debts [Section 809 of P.L.]

Notice of debt; contents

(a) Within five days after the initial communication with a consumer in
connection with the collection of any debt, a debt collector shall, unless the
following information is contained in the initial communication or the
consumer has paid the debt, send the consumer a written notice containing--

(1) the amount of the debt;

23
 (2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after
receipt of the notice, disputes the validity of the debt, or any portion
thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in

writing within the thirty-day period that the debt, or any portion
thereof, is disputed, the debt collector will obtain verification of the
debt or a copy of a judgment against the consumer and a copy of such
verification or judgment will be mailed to the consumer by the debt
collector; and

(5) a statement that, upon the consumer's written request within

the thirty-day period, the debt collector will provide the consumer with
the name and address of the original creditor, if different from the
current creditor.

Disputed debts

(b) Disputed debts. If the consumer notifies the debt collector in

writing within the thirty-day period described in subsection (a) that the debt,
or any portion thereof, is disputed, or that the consumer requests the name
and address of the original creditor, the debt collector shall cease collection of
the debt, or any disputed portion thereof, until the debt collector obtains
verification of the debt or a copy of a judgment, or the name and address of
the original creditor, and a copy of such verification or judgment, or name
and address of the original creditor, is mailed to the consumer by the debt
collector. Collection activities and communications that do not otherwise
violate this title may continue during the 30-day period referred to in
subsection (a) unless the consumer has notified the debt collector in writing
that the debt, or any portion of the debt, is disputed or that the consumer
requests the name and address of the original creditor. Any collection
activities and communication during the 30-day period may not overshadow
or be inconsistent with the disclosure of the consumer's right to dispute the
debt or request the name and address of the original creditor.
No Admission of liability

(c) The failure of a consumer to dispute the validity of a debt under

this section may not be construed by any court as an admission of liability by
the consumer.

(d) Legal pleadings. A communication in the form of a formal

pleading in a civil action shall not be treated as an initial communication for
purposes of subsection (a).

(e) Notice provisions. The sending or delivery of any form or notice

which does not relate to the collection of a debt and is expressly required by
the Internal Revenue Code of 1986, title V of Gramm-Leach-Bliley Act, or
any provision of Federal or State law relating to notice of data security breach

24
 or privacy, or any regulation prescribed under any such provision of law,
shall not be treated as an initial communication in connection with debt
collection for purposes of this section.

The statute requires that the specified information be disclosed in a single notice. Castro v.
Green Tree Servicing, 10cv7211, 2013 WL 4105196 (S.D.N.Y., Aug. 14, 2013). The consumer is
not required to piece the information together from multiple communications.
1. SENDING VS. RECEIPT

It is sufficient that the collector send the notice; nonreceipt does not amount to a
violation if it was sent. Mahon v. Credit Bur. of Placer County Inc., 171 F.3d 1197 (9th Cir.
1999); Krawczyk v. Centurion Capital Corp., 06 C 6273, 2009 U.S. Dist. LEXIS 12204, 2009 WL
395458 at *12 (N.D. Ill. Feb. 18, 2009); Derricotte v. Pressler, Civil Action No. 10-1323, 2011
U.S. Dist. LEXIS 78921 (D.N.J., July 19, 2011); Campbell v. Credit Bureau Systems, Inc., 655
F.Supp.2d 732, 740 (E.D. Ky. 2009); Zamos II v. Asset Acceptance, LLC, 423 F.Supp.2d 777, 785
(N.D. Ohio 2006). However, if the notice is returned and the collector subsequently gets a correct
address for the debtor and wishes to communicate with him, the collector must provide another
§1692g notice. Johnson v. Midland Credit Mgmt. Inc., 1:05 CV 1094, 2006 U.S. Dist. LEXIS
60133 (N.D.Ohio, Aug. 24, 2006). Similarly, a misaddressed notice that is not in fact received is
not sufficient. Kim v. Gordon, No. CV-10-1086-HZ, 2011 U.S. Dist. LEXIS 85353 (D.Ore. Aug.
2, 2011); Palisades Collection, LLC v. O'Brien, 172 Ohio App. 3d 186; 873 N.E.2d 923 (2007).
2. PLEADINGS NOT COVERED

Prior to the 2006 amendment to the FDCPA, if the initial communication to the
debtor was a summons and complaint, it had to comply with §1692g. Thomas v. Simpson &
Cybak, 392 F.3d 914 (7th Cir. 2004); Sprouse v. City Credits Co., 126 F.Supp.2d 1083, 1089 n. 8
(S.D.Ohio 2000) (finding that a summons and complaint served in a state court action constitute
"initial communications" under the FDCPA); Romea v. Heiberger & Associates, 163 F.3d 111 (2d
Cir. 1998) (statutory five-day notice is “communication”); Mendus v. Morgan & Assoc., P.C.,
994 P.2d 83 (Okla. App. 1999)(summons is “communication”); contra, Vega v. McKay, 351 F.3d
1334, 1335 (11th Cir. 2003); McKnight v. Benitez, 176 F.Supp.2d 1301, 1306-08 (M.D.Fla.2001)
(holding that a summons and complaint do not constitute "initial communications" triggering the
debt validation notice requirements of §1692g). The requirement in the summons that the
defendant answer within 30 days or less could conflict with the validation notice and at least
requires the “qualifying language” of Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997). See In re
Martinez, 311 F.3d 1272 (11th Cir.2002).

The statute has now been amended to provide that a pleading does not trigger the
validation notice. However, any other type of communication between the debtor and debt
collector does trigger it.
3. OPTION TO CEASE COLLECTION INSTEAD OF VALIDATING

Section 1692g(b) provides that if the consumer disputes the debt in writing, the
collector must cease further collection efforts until the validation procedure is complied with.
Although the notice literally requires the debt collector to provide validation information, the
Seventh Circuit has held that the debt collector does not violate the statute if it ceases all further
collection activities without providing the information. Jang v. A. M. Miller & Assoc., Inc., Nos.
95 C 4919, 95 C 6665, 1996 U.S.Dist. LEXIS 10883 (N.D.Ill., July 30, 1996), aff'd, 122 F.3d
480 (7th Cir. 1997) ("When a collection agency cannot verify a debt, the statute allows the debt

25
collector to cease all collection activities at that point without incurring any liability for the
mistake"); Sambor v. Omnia Credit Services, Inc., 183 F.Supp.2d 1234, 1242 (D.Haw. 2002);
Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1031-32 (6th Cir. 1992).

If a consumer both exercises her dispute right and directs the collector to cease
collection efforts, the collector can simply respond to the dispute and provide necessary
verification to comply with §1692g and must do so without seeking payment that would violate
§1692c(c). Johnson v. Equifax Risk Mgmt. Servs, 2004 WL 540459, *9 (S.D.N.Y. Mar. 14,
2004); Cohen v. Beachside Two-I Homeowners' Ass'n, 2006 WL 1795140 *13-14 (D. Minn. June
29, 2006) (“As a result, while Cohen's October 18 letter does inform Krietzman and Felhaber that
Cohen wishes to have no further communication with respect to the debt generally, it does not
ban any future communication. Cohen solicits Krietzman and Felhaber to communicate with him
regarding settlement of the debt.”); Recker v. Cent. Collection Bureau, Inc., 2005 WL 2654222,
at *4 (S.D. Ind. Oct.17, 2005) (“Contrary to Defendant's assertion, Defendant could have
complied with both provisions § 1692g(b) and § 1692c(c) by sending the verification with a
communication stating that the Defendant intended to invoke a specified remedy, namely the
filing of a suit in a small claims court.”); Marino v. Hoganwillig, PLLC, 2012 WL 1424733 *2
(W.D.N.Y. April 24, 2012). Once the collector verifies the dispute, the collector is free to bring
suit or invoke other remedies.
4. WHAT IS REQUIRED BY VERIFICATION

The Fourth Circuit has held that "verification of a debt involves nothing more than
the debt collector confirming in writing that the amount being demanded is what the creditor is
claiming is owed; the debt collector is not required to keep detailed files of the alleged debt."
Chaudhry v. Gallerizzo, 174 F.3d 394 (4th Cir. 1999). See also, on this issue: Clark v. Capital
Credit & Collection Servs., 460 F.3d 1162, 1174 (9th Cir. 2006) (“At the minimum, verification of
a debt involves nothing more than the debt collector confirming in writing that the amount being
demanded is what the creditor is claiming is owed."); McCammon v. Bibler, Newman &
Reynolds, P.A., 06-2242-JWL, 2007 U.S. Dist. LEXIS 69352 (D.Kan. September 18, 2007);
Worch v. Wolpoff & Abramson, L.L.P., 477 F. Supp. 2d 1015 (E.D.Mo. 2007); Stonehart v.
Rosenthal, 01 Civ. 651, 2001 U.S. Dist. LEXIS 11566, 2001 WL 910771 (S.D.N.Y., Aug. 13,
2001).

Note that Chaudhry involved a case where the debt collector was collecting for a
creditor which had more detailed information. It should not be applied to a bad debt buyer where
the collector and the owner of the debt are one and the same.
If the debt has been sold or transferred, the Uniform Commercial Code entitles the
putative debtor to proof of the assignment. UCC §9-406, 810 ILCS 5/9-406 (most sales of
receivables are subject to Article 9 even though they are not what normally would be thought of
as a secured transaction). In addition, Illinois law gives the debtor greater rights in the event of
identity theft. 225 ILCS 425/9.4. Finally, many statutes regulating the extension of credit entitle
a debtor to an accounting. E.g., Real Estate Settlement Procedures Act, 12 U.S.C. §2605(e);
Motor Vehicle Retail Installment Sales Act, 815 ILCS 375/15; Retail Installment Sales Act, 815
ILCS 405/16; Uniform Commercial Code, 810 ILCS 5/9-210 and 810 ILCS 5/9-613.
5. EFFECT OF FAILURE TO DISPUTE

Section 1692g(c) provides that “The failure of a consumer to dispute the validity
of a debt under this section may not be construed by any court as an admission of liability by the
consumer.” Under this section, the initial communication from a debt collector cannot be used

26
as the basis for an account stated. Citibank v. Jones, 184 Misc.2d 63, 706 N.Y.S.2d 301 (Dist. Ct.
2000).

The failure of a debtor to dispute a debt does not preclude an FDCPA violation
based on debt collection practices that are otherwise unlawful under the FDCPA. Gigli v.
Palisades Collection, L.L.C., 3:CV-06-1428, 2008 U.S.Dist. LEXIS 62684, 2008 WL 3853295
(M.D.Pa., Aug. 14, 2008) (holding that plaintiff's allegation that defendants attempted to apply an
interest rate not agreed upon in plaintiff's credit card agreement stated a claim under § 1692f(1);
consumer’s failure to dispute the amount was not a bar to suit).
6. EACH DEBT COLLECTOR MUST VALIDATE

The better view is that each new debt collector must comply with §1692g.
Griswold v. J & R Anderson Bus. Servs., 82-1474, 1983 U.S.Dist. LEXIS 20365, *2-4 (D.Ore.
Oct. 21, 1983); Robinson v. Nationstar Mortgage, LLC, Case No. 2:12-cv-718, 2012 U.S. Dist.
LEXIS 163268, 2012 WL 5596421 (S.D.Ohio, Nov. 15, 2012); Turner v. Shenandoah Legal
Group, P.C., 3:06cv045, 2006 U.S. Dist. LEXIS 29341, *32-39, 2006 WL 1685698, *11 (E.D.Va.
June 12, 2006); Tipping-Lipshie v. Riddle, 2000 WL 33963916, *3 (E.D.N.Y. March 2, 2000);
Sparkman v. Zwicker & Assoc., P.C., 374 F.Supp.2d 293, 300-01 (E.D.N.Y. 2005); Stair v.
Thomas & Cook, 254 F.R.D. 191, 197 (D.N.J. 2008); Sutton v. Law Offices of Alexander L.
Lawrence, 1992 U.S.Dist. LEXIS 22761, *8 (D.Del. June 17, 1992); Horkey v. J.V.D.B. &
Associates, 179 F.Supp.2d 861, 865 (N.D.Ill. 2002), aff’d, 333 F.3d 769 (7th Cir. 2003); Minh Vu
Hoang v. Rosen, 2013 WL 781780 (D.Md. Feb. 28, 2013). This is the view of the FTC. FTC
Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg. 50097, at 50108 (Dec. 13,
1988) (“an attorney who regularly attempts to collect debts . . . must provide the required notice,
even if a previous debt collector (or creditor) has given such notice”). Otherwise, the consumer
has no opportunity to insist that collection efforts cease pending verification in situations where
that is clearly required to protect the consumer, such as:

(a) where the consumer claims that the debt was paid to or settled by a prior
collector, as in Chase Bank USA, N.A. v. Cardello, 2010 NY Slip Op. 20090, 27 Misc. 3d 791,
896 N.Y.S.2d 856, 857, 2010 N.Y. Misc. LEXIS 513, 243 N.Y.L.J. 48 (Richmond Co. Civ. Ct.
2010) ( “[O]n a regular basis this court encounters defendants being sued on the same debt by
more than one creditor alleging they are the assignee of the original credit card obligation. Often
these consumers have already entered into stipulations to pay off the outstanding balance due the
credit card issuer and find themselves filing an order to show cause to vacate a default judgment
from an unknown debt purchaser for the same obligation.”);
(b) there is a question whether the new debt collector has an assignment of the debt
or is otherwise authorized to act, as in United States v. Goldberg, 09-80030-CR (S.D.Fla.) (In
2009, a debt buyer was charged with a scheme to sell 86,000 accounts that he did not own. He
had actually sold over 10,000 at the time he was caught);

(c) collection efforts by two or more debt collectors who claim to have been
authorized to collect the same debt, as in Wood v. M&J Recovery LLC, No. CV 05-5564, 2007
U.S.Dist. LEXIS 24157 (E.D.N.Y. Apr. 2, 2007) ( a debtor complained of multiple collection
efforts by various debt buyers and collectors on the same debt, and the defendants asserted claims
against one another disputing the ownership of the portfolio involved. Shekinah alleged that it
sold a portfolio to NLRS, that NLRS was unable to pay, that the sale agreement was modified so
that NLRS would only obtain one fifth of the portfolio, and that the one fifth did not include the
plaintiff’s debt. Portfolio Partners claimed that it, and not Shekinah, was the rightful owner of the
portfolio);

27
 (d) collection efforts directed by a subsequent debt collector to the wrong person,
as in Gutierrez v. LVNV Funding, LLC, EP-08-CV-225-DB, 2009 U.S. Dist. LEXIS 54479
(W.D.Tex. March 16, 2009) (if the subsequent collector is not required to comply with §1692g at
all, there would be no duty to advise that person of their rights);

(e) the prior debt collector did not comply with §1692g,

(f) the amount of the debt has substantially changed over the years, either as a
result of payments or credits or the addition of fees and charges.

In addition, since the Seventh Circuit has held that a debt collector, upon receipt of
a dispute, need not verify but complies with the statute by ceasing collection, Jang v. A.M. Miller
& Assocs., 122 F.3d 480 (7th Cir. 1997), holding that a subsequent debt collector has no obligation
under §1692g would allow evasion of the debtor’s rights by having collector A send the initial
letter, stop collecting if a dispute is received, and then have collector B continue collections
without anyone complying with §1692g.
However, there are some contrary cases, mostly without analysis. Senftle v.
Landau, 390 F.Supp.2d 463, 473 (D.Md. 2005); Nichols v. Byrd, 435 F.Supp.2d 1101, 1106
(D.Nev. 2006). Some of these erroneously assert that the only purpose of §1692g is to provide
the consumer with notice of his rights, when it also requires disclosure of the current creditor,
amount of the debt, etc.
7. AMOUNT OF THE DEBT

Section 1692g(a)(1) requires the “amount of the debt” to be stated in the initial
letter. This requires the entire amount the collector is authorized to collect at the time a collection
demand is sent to be stated. Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, and Clark,
L.L.C., 214 F.3d 872 (7th Cir. 2000) (not sufficient to state that unpaid principal balance of
residential mortgage loan was $178,844.65, and that this did not include unspecified accrued but
unpaid interest, unpaid late charges, escrow advances, and other charges authorized by loan
agreement). See also, Veach v. Sheeks, 316 F.3d 690 (7th Cir. 2003); Schletz v. Academy
Collection Service, 02 C 6484, 2003 WL 21196266 (N.D.Ill., May 15, 2003); Taylor v. Cavalry
Inv., LLC, 210 F.Supp.2d 1001 (N.D.Ill. 2002); Ingram v. Corporate Receivables, Inc., 02 C
6608, 2003 WL 21018650 (N.D.Ill., May 5, 2003); Bernstein v. Howe, IP 02-192-C-K/H, 2003
WL 1702254, 2003 U.S. Dist. LEXIS 5284 (S.D.Ind., March 31, 2003) ($x plus unspecified
interest and attorney’s fees violated statute); Bawa v. Bowman, Heintz, Boscia & Vician, PC, IP
00-1319-C-M/S, 2001 WL 618966 (S.D.Ind., May 30, 2001); Wilkerson v. Bowman, 200 F.R.D.
605 (N.D.Ill. 2001); Valdez v. Hunt & Henriques, 01-01712 SC, 2002 WL 433595 (N.D.Cal.
March 19, 2002); Jackson v. Aman Collection Service, IP 01-0100-C-T/K, 2001 WL 1708829
(S.D.Ind., Dec. 14, 2001); Sonmore v. Checkrite Recovery Services, Inc., 187 F.Supp.2d 1128
(D.Minn. 2001); Dechert v. Cadle Co., IP 01-880-C(B/G), 2003 WL 23008969 (S.D.Ind., Sept.
11, 2003); McDowall v. Leschack & Grodensky, P.C., 279 F.Supp.2d 197 (S.D.N.Y. 2003);
Armstrong v. Rose Law Firm, P.S., 00-2287, 2002 WL 461705 (D.Minn. March 25, 2002).

If the debt collector is attempting to collect the past due portion of an

unaccelerated debt, the “amount of the debt” is the past due portion, not the whole debt. Barnes
v. Advanced Call Ctr. Techs., LLC, 493 F.3d 838 (7th Cir. 2007); Castro v. Green Tree Servicing,
10cv7211, 2013 WL 4105196 (S.D.N.Y., Aug. 14, 2013); Adlam v. FMS, Inc., 09 Civ. 9129, 2010
WL 1328958 (S.D.N.Y., April 5, 2010). However, the nature of the number has to be “clearly”
described. Obfuscatory statements about the amount due have been found to violate
§1692g(a)(1). Chuway v. National Action Financial Services, 362 F.3d 944 (7th Cir. 2004) (letter

28
stating the balance but inviting the debtor to call to obtain “the most current balance information”
creates doubt as to whether the balance stated is increasing and violates the FDCPA unless an
explanation is provided). Note that even after a debt has been accelerated non-FDCPA law or a
contract may require furnishing a reinstatement amount in addition to the accelerated amount
(especially in the case of mortgages, automobile debts).

If the debt is increasing due to interest or the like, the collector should use the
safe harbor language prescribed in Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, and
Clark, L.L.C., 214 F.3d 872 (7th Cir. 2000). The Miller language is as follows:

As of the date of this letter, you owe $ [the exact amount due]. Because of
interest, late charges, and other charges that may vary from day to day, the
amount due on the day you pay may be greater. Hence, if you pay the amount
shown above, an adjustment may be necessary after we receive your check, in
which event we will inform you before depositing the check for collection. For
further information, write the undersigned or call 1-800-[phone number].
Failure to disclose that the debt is increasing due to interest and the like may be a
violation. In Snyder v. Daniel N. Gordon, P.C., Case No. C11-1379 RAJ, 2012 U.S. Dist. LEXIS
120659, 2012 WL 3643673 (W.D.Wash., August 24, 2012), the court held:

Defendants' first letter read, in relevant part: "Demand is hereby made upon you
for payment in the sum of $18,026.56." Snyder Mot. at Ex. B. Two subsequent
letters made reference to a "Balance Due." Id. at Exs. C, D. None of the letters
provided further detail regarding when or how the balance had been calculated,
whether it included interest, or whether interest continued to accrue. The court
finds that the "least sophisticated consumer" could have read these letters in at
least two different ways. On one hand, an unsophisticated consumer could
reasonably conclude that the balance was a fixed amount that would not be subject
to further interest, late fees, or other charges. On the other, an unsophisticated
consumer could just as reasonably determine that the balance would continue to
grow over time as interest accrued. One of those meanings would necessarily be
inaccurate. Therefore, the court finds that Defendants' letters were deceptive as a
matter of law.[2] Courts in other districts have reached the same conclusion on
similar facts. See Michalek v. ARS Nat'l. Sys., Inc., No. 3:11-CV-1374, 2011 U.S.
Dist. LEXIS 142976, 2011 WL 6180498, at *4 (M.D. Pa. Dec. 13, 2011) (holding
that the term "balance" has more than one meaning); Dragon v. I.C. Sys., 483 F.
Supp. 2d 198, 203 (D. Conn. 2007) (holding that a reference to a "sum certain"
was deceptive as a matter of law). The court grants Ms. Snyder's motion for
summary judgment on this issue.

Accord, Smith v. Lyons, Doughty & Veldhuis, P.C., No. 07-5139, 2008 U.S. Dist. LEXIS 56725,
2008 WL 2885887, at *6 (D.N.J. July 23, 2008); Jones v. Midland Funding, LLC, 755 F. Supp. 2d
393 (D. Conn. 2010), later opinion, 3:08-CV-802 (RNC), 2012 U.S. Dist. LEXIS 50879
(D.Conn., April 11, 2012); Jackson v. Aman Collection Serv., No. IP 01-0100-C-T/K, 2001 U.S.
Dist. LEXIS 22238, 2001 WL 1708829, at *3 (S.D. Ind. Dec. 14, 2001); Stonecypher v.
Finkelstein Kern Steinberg & Cunningham, 2:11-cv-13, 2011 U.S. Dist. LEXIS 88319, 2011 WL
3489685, *5 (E.D. Tenn. Aug. 9, 2011) (“many courts have followed Miller to hold that the
"amount of debt" requirement in 15 U.S.C. § 1692g(a)(1) requires the debt collector to list the
principal balance, indicate specifics about any interest that may be accruing, and include other
fees that may be associated with the debt.”); see Curto v. Palisades Collection, LLC, No.
07-CV-529(S), 2011 U.S. Dist. LEXIS 125493, 2011 WL 5196708, *8 (W.D.N.Y. Oct. 31, 2011)

29
("Only were Defendants to now seek interest on the debt, would the letter have been
misleading.").

Contrary cases include Pifko v. CCB Credit Servs., No. 09-CV-3057 (JS)(WDW),
2010 U.S. Dist. LEXIS 69872, 2010 WL 2771832, at *3-4 (E.D.N.Y. July 7, 2010); Schaefer v.
ARM Receivable Management, Inc., No. 09-11666-DJC, 2011 U.S. Dist. LEXIS 77828, 2011 WL
2847768, *5-6 (D. Mass. July 19, 2011). Some other cases hold that consumers should
understand that a credit card in the hands of the original creditor, as opposed to a debt buyer,
accrues interest. Adlam v. FMS, No. 09 Civ. 9129 (SAS), 2010 U.S. Dist. LEXIS 33433, 2010
WL 1328958, at *3 (S.D.N.Y. April 5, 2010); Weiss v. Zwicker & Assocs., 664 F. Supp. 2d 214,
217 (E.D.N.Y. 2009) ("even the most unsophisticated consumer would understand that credit card
debt accrues interest").

The basic premise of the latter line of cases is factually incorrect, since most but
not all banks cease charging interest after chargeoff, so that the consumer does not know whether
interest is in fact being added. Curto v. Palisades Collection, LLC, supra.
8. RELATIONSHIP BETWEEN §§1692g AND 1692e(8)

Cases are divided on whether an oral dispute prevents the collector from assuming
that the debt is valid. The Third Circuit requires a writing for a dispute. Graziano v. Harrison,
950 F.2d 107, 112 (3d Cir. 1991). The Second and Ninth Circuits hold that there is no writing
requirement. Hooks v. Forman, Holt, Eliades & Ravin, LLC, 12-3639-cv (2nd Cir. May 29, 2013);
Camacho v. Bridgeport Financial, Inc., 430 F.3d 1078, 1080 (9th Cir. 2005). The vast majority of
lower courts have held that §1692g(a)(3) does not impose a writing requirement on a consumer
when disputing the validity of a debt. Rather, these courts have reasoned that the plain language
of subsection (a)(3) does not require a consumer to dispute the validity of a debt in writing.
Spearman v. Tom Wood Pontiac-GMC, Inc., IP 00-1340-C-T/K, 2002 U.S. Dist. LEXIS 24389,
2002 WL 31854892 (S.D. Ind. Nov. 4, 2002); Chung v. Nat'l Check Bureau, Inc., No. 1:04 CV
1857, 2005 U.S. Dist. LEXIS 15216, 2005 WL 1541030 (S.D. Ind. June 30, 2005); Walters v.
PDI Mgmt. Servs., No. 1:02-CV-1100, 2004 U.S. Dist. LEXIS 13972, 2004 WL 1622217 (S.D.
Ind. Apr. 6, 2004) ; Rosado v. Taylor, 324 F.Supp.2d 917 (N.D. Ind. 2004); Edmonds v. Nat'l
Check Bureau, Inc., No. 01-1289, 2003 U.S. Dist. LEXIS 17476 (S.D. Ind. Aug. 1, 2003);
Register v. Reiner, Reiner & Bendett, P.C., 488 F.Supp.2d 143 (D.Conn. 2007); Jerman v.
Carlisle, McNellie, Rini, Kramer & Ulrich, 464 F.Supp.2d 720 (N.D. Ohio 2006); Baez v.
Wagner & Hunt, P.A., 442 F.Supp.2d 1273 (S.D.Fla. 2006); Turner v. Shenandoah Legal Group,
P.C., No. 3:06CV045, 2006 U.S. Dist. LEXIS 39341, 2006 WL 1685698 (E.D. Va. June 12,
2006); Vega v. Credit Bureau Enters., No. CIVA02CV1550, 2005 U.S. Dist. LEXIS 4927, 2005
WL 711657 (E.D.N.Y. Mar. 29, 2005); Nasca v. GC Servs. Ltd. P'ship, No 01CIV10127, 2002
U.S. Dist. LEXIS 16992, 2002 WL 31040647 (S.D.N.Y. Sept. 12, 2002); In re Risk Mgmt.
Alternatives, Inc., Fair Debt Collection Practices Act Litig., 208 F.R.D. 493 (S.D.N.Y. June 14,
2002); Sambor v. Omnia Credit Servs., Inc., 183 F.Supp.2d 1234 (D.Haw. 2002); Sanchez v.
Robert E. Weiss, Inc., 173 F.Supp.2d 1029 (N.D. Cal. 2001); Castro v. ARS Nat'l Servs., Inc., No.
99 CIV. 4596, 2000 U.S. Dist. LEXIS 2618, 2000 WL 264310 (S.D.N.Y. Mar. 8, 2000); Ong v.
American Collections Enterprise, No. 98-CV-5117, 1999 U.S. Dist. LEXIS 409, 1999 WL 51816
(E.D.N.Y. Jan. 15, 1999); Wyler v. Computer Credit, Inc., 04 CV 2762 (CLP), 2006 U.S.Dist.
LEXIS 57766 (E.D.N.Y., March 3, 2006); Reed v. Smith, Smith & Smith, No. Civ. A. 93-956,
1995 U.S. Dist. LEXIS 22013, 1995 WL 907764 (M.D.La. Feb. 8, 1995); Harvey v. United
Adjusters, 509 F.Supp.1218 (D.Or. 1981). These courts hold that the plain language of
1692g(a)(3) does not require that the consumer dispute the validity of the debt in writing and that
courts are not at liberty to override the language used by Congress. Camacho v. Bridgeport
Financial, Inc., 430 F.3d 1078, 1080 (9th Cir. 2005) (“we must give effect to the plain meaning of

30
the statute . . . “); Vega v. Credit Bureau Enters., No. CIVA02CV1550, 2005 U.S. Dist. LEXIS
4927, 2005 WL 711657 (E.D.N.Y. Mar. 29, 2005);

The Ninth Circuit has held that "A validation notice violates § 1692g(a)(3) only
where it expressly requires a consumer to dispute her debt in writing." Riggs v. Prober &
Raphael, 681 F.3d 1097 (9th Cir. 2012).

Section 1692g is related to §1692e(8). Under §1692e(8), if a consumer disputes a

debt, either orally or in writing, Brady v. Credit Recovery Co., 160 F.3d 64 (1st. Cir. 1998), the
debt collector cannot report it as undisputed to a credit bureau. Thus, if the consumer orally
disputes the debt, the debt collector cannot assume that the debt is valid or report it as undisputed
to a credit bureau, but need not provide validation information to the debtor.

If the consumer requests a credit bureau to remove a tradeline or note that the debt
is disputed, the furnisher of information, which can be a debt collector, violates the Fair Credit
Reporting Act as well as the FDCPA by verifying or continuing to report it as undisputed.
9. WHO CAN ASSUME DEBT TO BE VALID

Only the debt collector and perhaps the creditor can assume that the debt is valid.
Neither the initial letter nor other correspondence from the debt collector can state that the debt
will be assumed to be valid generally, or by a court. Guerrero v. Absolute Collection Service,
Inc., No. 1:11-cv-02427-JEC, 2011 U.S. Dist. LEXIS 155541, *10 (N.D. Ga. Oct. 6, 2011)
(“ACS's failure to limit its statement that any undisputed debt would be assumed valid to the debt
collector violates the notice requirements of §1692g(a)(3) by "making the least sophisticated
consumer uncertain as to her rights."); Koch v. Atkinson, Diner, Stone, Mankuta, & Ploucha, P.A.,
No. 11-80894-CIV, 2011 U.S. Dist. LEXIS 109826, 2011 WL 4499100 (S.D. Fla. Sept. 27,
2011); Galuska v. Collectors Training Institute of Illinois, Inc., No. 3:07-CV-2044, 2008 U.S.
Dist. LEXIS 39508, 2008 WL 2050809 (M.D. Pa. May 13, 2008) (holding that failure to include
"by the debt collector" or words such as "we" or "this office" in the required disclosure would
lead least sophisticated debtor to believe the debt would be assumed valid by some other entity);
Rivers v. Am. Network, Inc., Civil Action No. 1:10-cv-2606, at [Doc. 12] (N.D. Ga. May 4, 2011),
adopted by [Doc. 13]; Harlan v. NRA Grp., LLC, Civil Action No. 10-cv-0324, 2011 U.S. Dist.
LEXIS 12751, 2011 WL 500024, at *3 (E.D. Pa. Feb. 9, 2011); Smith v. Hecker, No. Civ. A.
04-5820, 2005 U.S. Dist. LEXIS 6598, 2005 WL 894812, at *6 (E.D. Pa. Apr. 18, 2005) (Letter
stated, “UNLESS YOU, THE CONSUMER, WITHIN THIRTY DAYS OF RECEIPT OF THIS
NOTICE, DISPUTE THE VALIDITY OF THE DEBT, OR ANY PORTION THEREOF, THE
DEBT WILL BE ASSESSED VALID”; "[O]mission of 'by the debt collector' would lead a least
sophisticated debtor to believe that unless she disputes the validity of the debt . . . her debt will be
. . . determined to be valid by a court, credit reporting agency, or other entity of authority [or]
imposed upon her using a valid procedure . . . ."); Philip v. Sardo & Batista, P.C., No. 11-4773
(SRC), 2011 U.S. Dist. LEXIS 130267, 2011 WL 5513201 (D.N.J. Nov. 10, 2011); Pierce v.
Carrington Recovery Services, LLC, No. 09-0787, 2009 U.S. Dist. LEXIS 72049 (W.D.Pa., Aug.
17, 2009); Orr v. Westport Recovery Corp., --- F.Supp.2d ----, 2013 WL 1729578 (N.D.Ga., April
16, 2013).

Greco v. Trauner, Cohen & Thomas, LLP, 412 F. 3d 360 (2d Cir. 2005), found no
violation by extending the assumption to the creditor.
10. DISPUTE “PORTION” OF DEBT

The right to dispute a part of the debt is material and the notice must disclose that

31
right. Harvey v. United Adjusters, 509 F.Supp. 1218 (D.Ore. 1981); Forsberg v. Fidelity National
Credit Services, 03cv2193-DMS(AJB), 2004 U.S. Dist. LEXIS 7622, 2004 WL 3510771
(S.D.Cal., Feb. 26, 2004); Bailey v. TRW Receivables Mgmt. Servs., Inc., Civ. No. 90-192, 1990
U.S. Dist. LEXIS 19638 (D.Haw. Aug. 16, 1990); McCabe v. Crawford & Co., 210 F.R.D. 631
(N.D.Ill. 2002), later opinion, 272 F.Supp.2d 736 (N.D.Ill. 2003); Beasley v. Sessoms & Rogers,
P.A., No. 5:09-CV-43-D, 2010 U.S. Dist. LEXIS 52010, 2010 WL 1980083 (E.D.N.C., March 1,
2010).
11. OVERSHADOWING AND CONTRADICTION

“The statute does not say in so many words [at that time] that the disclosures
required by it must be made in a nonconfusing manner. But the courts, our own included, have
held, plausibly enough, that it is implicit that the debt collector may not defeat the statute's
purpose by making the required disclosures in a form or within a context in which they are
unlikely to be understood by the unsophisticated debtors who are the particular objects of the
statute's solicitude.” Bartlett v. Heibl, 128 F.3d 497, 500 (7th Cir. 1997)
The debt collector is not precluded from collecting the debt within the validation
period. However, if the debt collector threatens action or demands payment within the validation
period (30 days from receipt), there is a violation unless the collector explains that upon receipt of
a dispute/ request for validation, collection activity will cease until verification is sent. Bartlett v.
Heibl, 128 F.3d 497 (7th Cir. 1997).

Under §1692g, is not enough for a debt collector to merely include the notice
somewhere on the collection letter. Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997); Riveria v.
MAB Collections, Inc., 682 F.Supp. 174 (W.D.N.Y. 1988). The notice must be large and
prominent enough to be noticed and easily read. Riveria v. MAB Collections, Inc. 682 F.Supp.
174, 177 (W.D.N.Y. 1988); Rabideau v. Management Adjustment Bureau, 805 F.Supp. 1086,
1093 (W.D.N.Y. 1992). The validation notice may not be either "overshadowed" or contradicted
by other language or material in the original or subsequent collection letters sent within 30 days
after receipt of the first one. Swanson v. Southern Oregon Credit Service, Inc., supra, 869 F.2d
1222 (9th Cir. 1988); Harris v. Payco General American Credits, Inc., 98 C 4245, 1998 U.S.Dist.
LEXIS 20153 (N.D. Ill. Dec. 9, 1998)."A notice is overshadowing or contradictory if it would
make the least sophisticated consumer uncertain as to her rights." Russell v. Equifax A.R.S., 74
F.3d 30 (2d Cir. 1996).

“The FDCPA requires that, within five days of a debt collector's initial
communication with the consumer, the debt collector must send the consumer a
written notice containing—(1) the amount of the debt; (2) the name of the creditor
to whom the debt is owed;(3) a statement that unless the consumer, within thirty
days after receipt of the notice, disputes the validity of the debt, or any portion
thereof, the debt will be assumed to be valid by the debt collector; (4) a statement
that if the consumer notifies the debt collector in writing within the thirty-day
period that the debt, or any portion thereof, is disputed, the debt collector will
obtain verification of the debt or a copy of a judgment against the consumer and a
copy of such verification or judgment will be mailed to the consumer by the debt
collector. 15 U.S.C. § 1692g(a)(l)-(4). In other words, unless a debt collector
conveys this statutorily-required information, it violates the Act. Furthermore,
‘[e]ven if a debt collector conveys the required information, the collector
nonetheless violates the Act if it conveys that information in a confusing or
contradictory fashion so as to cloud the required message with uncertainty.’
DeSantis, 269 F.3d at 161.”

32
Hecht v. Green Tree Servicing, LLC, 3:12CV498 JBA, 2013 WL 164514 (D.Conn., January 15,
2013).

The “overshadowing” doctrine was codified in the 2006 amendment to §1692g.

In Chauncey v. JDR Recovery Corp., 118 F.3d 516 (7th Cir. 1997), the Seventh
Circuit held that a letter insisting that the collector receive a check within 30 days in one
paragraph (a demand which would require the debtor to transmit the check in less than 30 days)
followed by the §1692g notice in the next, and concluding with a demand for a "prompt response"
to avoid "further collection activities" violated §1692g. The text of the letter was as follows:

Dear Carl P. Chauncey,

Please be advised that we have been requested by [Bridgestone/ Firestone] to assist

them in the collection of the amounts due set forth above. Unless we receive a
check or money order for the balance, in full, within thirty (30) days from receipt
of this letter, a decision to pursue other avenues to collect the amount due will be
made.

Unless you notify this office within thirty (30) days after receiving this notice that
you dispute the validity of this debt, or any portion thereof, this office will assume
this debt is valid. If you notify this office in writing within thirty (30) days from
receiving this notice that you dispute the debt or any portion of it, this office will
obtain verification of the debt or obtain a copy of the judgment and mail you a
copy of such judgment or verification. If you request this office in writing within
thirty (30) days after receiving this notice, this office will provide you with the
name and address of the original creditor if different from the current creditor.

This is an attempt to collect on this debt. Any information obtained will be used
for that purpose.

You may contact Ms. Mackenzie at (800) 793-3369 if you have any questions or if
you would like to discuss this matter further.

Please include the above JDR number on the outside of your remittance envelope
to insure proper credit. We trust your prompt response will make any further
collection activities unnecessary. In the event we do not hear from you within the
next thirty (30) days, further collection activities will be pursued to the extent
permitted by law.

The Court of Appeals agreed that "the thirty-day payment requirement set out in
the [first paragraph of the] collection letter contradicts the mandatory validation notice
disclosures allowing thirty days to dispute the debt." It explained:

The statement in the first paragraph of defendant's letter -- "Unless we receive a

check or money order for the balance, in full, within thirty (30) days from receipt
of this letter, a decision to pursue other avenues to collect the amount due will be
made" -- contradicts the language in the letter explaining the plaintiff's validation
rights under the FDCPA, which allows plaintiff 30 days in which to dispute the
debt and request verification. We believe that the contradictions in the letter, as in
Avila, would leave an unsophisticated consumer confused as to what his rights are
and therefore violate the FDCPA.

33
 Defendant argues that the letter contains no contradiction because plaintiff is given
the same amount of time to pay as to contest the debt (i.e., "within thirty (30)
days"). But the letter required that plaintiff's payment be received within the
30-day period, thus requiring plaintiff to mail the payment prior to the thirtieth day
to comply. In contrast, subparagraphs (3) and (4) of §1692g(a) give the consumer
thirty days after receipt of the notice to dispute the validity of a debt. It is clear that
Mr. Chauncey had the full thirty days to send his notification to defendant.
Nothing in Section 1692g requires, and we have found no other court decision
which has required, that the debt collector must receive notice of the dispute
within thirty days as defendant insists. . . .

In Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997), defendants' letter threatened
legal action within the 30-day validation period by demanding that the debtor make payment
within one week or other suitable arrangements. The letter also contained a paraphrase of
§1692g's language. Even though the letter did not misstate either parties' legal rights, the Seventh
Circuit found that the letter was confusing and violated § 1692g because it contained the
seemingly contradictory statements that the debtor had 30 days to verify his debt and that he
could also be sued in one week.

The Bartlett court concluded, by way of an exemplary "safe harbor" letter, that if a
debt collector threatens suit or demands action of the debtor within the 30-day validation period,
it should also provide the debtor with a full explanation of the relationship between the creditor's
right to sue and the debtor's right to verification, namely, that if the debtor disputes the debt and
requests verification all collection efforts must be halted until verification if provided. A very
similar solution was endorsed by the Second Circuit in Savino v Computer Credit, Inc., 164 F.3d
81 (2d Cir. 1998).

Debt collectors using the "safe harbor" letter need to adhere to it strictly. The
reference to suit within 30 days may not be used without the explanation that exercise of
verification rights will halt the collection process. Freys v. Satter, Beyer & Spires, 98 C
3957,1999 U.S.Dist. LEXIS 6912 (N.D.Ill., April 30, 1999). Also, the reference to 30 days
should specify "after receipt."

Another example of "overshadowing" is furnished by Miller v. Payco-General

American Credits, Inc., 943 F.2d 482, 484 (4th Cir. 1991), where the debt collector's "screaming
headlines, bright colors and huge lettering" utilizing language "IMMEDIATE FULL
PAYMENT", "PHONE US TODAY" and "NOW", were held to have overshadowed the 30 day
validation notice. Another letter disapproved by a court stated in type several times that of the
required validation language "IF THIS ACCOUNT IS PAID WITHIN THE NEXT 10 DAYS IT
WILL NOT BE RECORDED IN OUR MASTER FILE AS AN UNPAID COLLECTION ITEM.
A GOOD CREDIT RATING -- IS YOUR MOST VALUABLE ASSET." Swanson v. Southern
Or. Credit Serv., Inc., 869 F.2d 1222, 1225 (9th Cir. 1988).

In Russell v. Equifax A.R.S., 74 F.3d 30, 35 (2d Cir. 1996) the court held:

A notice is overshadowing or contradictory if it would make the least sophisticated

consumer uncertain as to her rights. It is not enough for a debt collection agency
simply to include the proper debt validation notice in a mailing to a consumer --
Congress intended that such notice be clearly conveyed. See Swanson v. Southern
Or. Credit Serv., Inc., 869 F. 2d 1222, 1225 (9th Cir. 1988) (per curiam). Here the
initial February notice failed to convey the validation information effectively. We

34
 recognize there are many cunning ways to circumvent §1692g under cover of
technical compliance, see Miller v. Payco-General Am. Credits, Inc., 943 F.2d
482, 485 (4th Cir. 1991), but purported compliance with the form of the statute
should not be given sanction at the expense of the substance of the Act. Since the
language on the front of the notice overshadowed and contradicted the language on
the back of the notice, causing the validation notice to be ineffective, the February
notice violated § 1692g as a matter of law.

A collection letter from an attorney demanding payment within ten days upon the
threat of suit was held to have contradicted the 30 day validation notice. Graziano v. Harrison,
supra, 950 F.2d 107 (3d Cir. 1991) (threat to sue if payment was not received within ten days
rendered the validation notice ineffective); Morgan v. Credit Adjustment Board, 999 F.Supp. 803
(E.D. Va. 1998); Cortright v. Thompson, 812 F.Supp. 772, 778 (N.D.Ill. 1992) (attorney demand
letter stating that "in the event the balance is not paid in full or satisfactory payment arrangements
made within ten days, it may be necessary to file at any time thereafter a lawsuit to recover the
amount due if so requested by my client . . . Although the letter is not as threatening visually as
some described in cases finding violations of §1692g(a), [citation], defendant's letter appears on
law firm stationery and states that it may be necessary to file a lawsuit at any time after 10 days . .
. ."); Swanson v. Southern Oregon Credit Service, Inc., supra, 869 F.2d 1222, 1225 (9th Cir.
1988) (§1692g notice accompanied by demand that account be paid within 10 days to avoid
adverse credit report is not effectively conveyed, and demand violates statute; such a
communication would "lead the least sophisticated debtor, and quite probably even the average
debtor, only to one conclusion: he must ignore the right to take 30 days to verify his debt and act
immediately or he will be remembered as a deadbeat in the 'master file' of his local collection
agency and will, accordingly, lose his 'most valuable asset,' his good credit rating"); United States
v. National Financial Services, Inc., 820 F.Supp. 228 (D.Md. 1993), aff'd, 98 F.3d 131 (4th Cir.
1996) (letter containing §1692g notice and also stating that matter would be referred to an
attorney in ten days violated §1692g because the ten day demand "contradict[s] the validation
notice's declaration that the debtor has thirty days to dispute the debt"); Russey v. Rankin, 911 F.
Supp. 1449 (D.N.M. 1995); Gary v. Kason Credit Corp., No. 3:95CV00054, Conn. Law Tribune,
Dec. 9, 1996 (D.Conn. Nov. 1, 1996); Creighton v. Emporia Credit Service, Inc.,
3:97CV171,1997 U.S. Dist. LEXIS 8556 (E.D. Va., May 20, 1997) ("Your unpaid bill must be
paid in full to this office upon receipt of this notice"; court described case as "borderline"); later
opinion, 1997 U.S. Dist. LEXIS 16356 (E.D.Va. Sept., 25, 1997), later opinion, 981 F.Supp. 411
(E.D.Va., 1991), later opinion 1998 U.S. Dist. LEXIS 6589 (E.D. Va., April 8, 1998).

Some courts hold that demands for an "immediate" response or "immediate

payment" have been held to overshadow and contradict the validation notice. Beeman v. Lacy,
Katzen, Ryen & Mittleman, 892 F. Supp. 405, 407-8 (N.D.N.Y. 1995) ("Please immediately send
your remittance, in the above amount, payable to [the defendant], or communicate your failure to
do so."); Adams v. Law Offices of Stuckert & Yates, 926 F. Supp. 521 (E.D.Pa. 1996) ("immediate
payment").

However, in Zemeckis v. Global Credit & Collection Corp., 679 F.3d 632 (7th Cir.
2012), the court held that if the only statement of the 30-day period is correct – i.e., the
consumer has 30 days from receipt of the initial notice to dispute all or part of the debt – general
statements in a collection letter which "urge[d] [her] to take action now," as well as to "[c]all
[Global Credit's] office today" and warned that"[her] account now meets . . . [the] guidelines for
legal action" and that "Capital One Bank (USA), N.A. may be forced to take legal action" are not
actionable:

In analyzing whether a letter, on its face, contravenes Section 1692g(b), this Court

35
 has distinguished between language rushing the debtor to take action—to "act
now"—and provisions that set deadlines contrary or contradictory to the thirty-day
validation period. Compare Taylor, 365 F.3d at 575 (upholding as not confusing a
dunning letter instructing the recipient to "[a]ct now to satisfy this debt"), with
Bartlett v. Heibl, 128 F.3d 497, 499, 502 (7th Cir. 1997) (rejecting as confusing a
letter that contained notice of the thirty-day validation period, but also demanded
that the debtor pay $316 toward his debt or call the creditor within a week to avoid
legal action), Chauncey v. JDR Recovery Corp., 118 F.3d 516, 518, 519 (7th Cir.
1997) (rejecting as contradictory a letter that required receipt of payment within
thirty days, thereby truncating a debtor's validation period), and Avila, 84 F.3d at
226 (rejecting as confusing a letter that followed its validation notice with a
sentence stating, "[i]f the above does not apply to you, we shall expect payment . .
. to be made within ten (10) days from the date of this letter"). We identify the
former language as puffery, as "rhetoric designed to create a mood rather than to
convey concrete information or misinformation." Taylor, 365 F.3d at 575. Puffery,
without more, does not violate Section 1692g(b). Even the most unsophisticated
debtor would realize that debt collectors wish to expedite payment, and urging him
to hurry does not confuse or undermine his right to his validation period. See id. at
575-76.

The dunning letter that Global Credit sent to Zemeckis, at worst, contains puffery.
Its suggestions to "take action now" and call "today" did not impose a deadline that
contradicted her right to a thirty-day validation period. The requests that she call
"now" or "today" were not tantamount to a request for payment, nor would an
unsophisticated consumer understand them as such. . . .

Global Credit's repeated threat of legal action similarly fails to convert the letter's
puffery into a contradictory payment deadline. The letter warns only that Capital
One Bank had the right to pursue legal action. It did not go so far as to mention
that it had the right, as do all creditors, to initiate suit during the validation period,
see Bartlett, 128 F.3d at 501. That information, if included, would have rendered
the letter even more threatening and still would not have risen to a violation of
Section 1692g(b). As written, the letter alerted Zemeckis only to the possible
repercussions she faced for failing to pay. (679 F.3d at 636-37)

Confusing statements such as "if the above does not apply to you, we shall expect
payment or arrangement for payment within ten (10) days from the date of this letter," also
violate the statute. Chauncey v. JDR Recovery Corp., 118 F.3d 516 (7th Cir. 1997).

Other cases hold that even where a demand for immediate payment is required, it
can be implied as well as express. A letter may overshadow if the overall effect is to convey that
message. In Jenkins v. Union Corp., 999 F.Supp. 1120 (N.D. Ill. 1998), the court considered a
letter which stated:

URGENT - THIS ACCOUNT HAS BEEN ASSIGNED TO OUR AGENCY FOR

IMMEDIATE COLLECTION.

PLEASE BE ADVISED THAT WE HAVE BEEN AUTHORIZED TO PURSUE

COLLECTION AND ARE COMMITTED TO MAKE WHATEVER EFFORTS
ARE NECESSARY AND PROPER TO EFFECT COLLECTION.

STRONGLY RECOMMEND YOU CONTACT OUR CLIENT TO MAKE

36
 PAYMENT ARRANGEMENT.

The court found this to violate §1692g, holding:

Terrafino likewise challenges the legality of his initial dunning letter, dated August
22, 1995. although this letter does not use the words "immediate payment," we
conclude that, viewed as a whole, the letter creates an apparent and unexplained
contradiction between message and the thirty-day validation rights discussed at the
bottom of the letter.

The letter begins with the declaration "URGENT," this is followed by a statement
informing Terrafino that his account has been "assigned to our agency for
immediate collection." Contrary to Transworld's assertions, the unsophisticated
consumer is likely to understand "immediate collection" as an effort to extract
immediate payment form him, not as a reference to the collector's duties. While
Bartlett, makes clear that a debt collector need not suspend collection efforts
during the validation period, these efforts run afoul of the FDCPA if they create an
unexplained contradiction that confuses the debtor. 128 F.3d at 500. The
confusion in this letter is compounded by its last sentence, which "[s]trongly
recommend[s] you contact our client to make payment arrangement." Read
together, the reference to "immediate collection" and the "strong" recommendation
to contact the creditor to arrange for payment are the substantive equivalent of the
request for immediate payment in Jenkins' first letter.

A collection letter that does not expressly request immediate payment can also
overshadow the validation notice by creating a confusing impression of urgency,
when, in reality, the consumer has thirty days in which to decide on his course of
action. See Ozkaya v. Telecheck Servs., Inc., 982 F.Supp. 578, 583-84 (N.D. Ill.
1997) (plaintiff stated valid overshadowing claim where offending letter was
confusing because it "urg[ed] [plaintiff] to resolve the dispute 'quickly' when, in
fact, she had at least thirty days.") Terrafino's letter begins by proclaiming that
it is "URGENT"; the sense of urgency is further communicated by the "immediate
collection" language and in the letter's express request for action -- a "strong"
recommendation in the final paragraph that Terrafino contact the creditor to make
payment arrangement. The middle paragraph sounds pressing and ominous as
well: "Please be advised that we have been authorized to pursue collection and are
committed to make whatever efforts are necessary and proper to effect collection."
We find that this language creates an apparent contradiction with the validation
notice by creating a false sense of urgency.

Accordingly, we grant Terrafino summary judgment on his overshadowing claim

premised on the language in his first letter, and deny defendants' cross motion for
summary judgment on this claim. We emphasize, however, that our decision to
grant Terrafino summary judgment on this ground is based on the letter read as a
whole, not on any one phrase scrutinized in isolation.
12. REQUESTS FOR TELEPHONE CONTACT

Requests that the consumer telephone the debt collector induce the consumer to
waive his right to verification by failing to make the request in writing, as required. Miller v.
Payco-General American Credits, Inc., supra, 943 F.2d 482 (4th Cir. 1991); Woolfolk v. Van Ru
Credit Corp., 783 F. Supp. 724, 726 (D. Conn. 1990); Flowers v. Accelerated Bureau of

37
Collections, 96 C 4003, 1997 U.S.Dist. LEXIS 3354, 1997 WL 136313 (N.D.Ill. Mar 19, 1997).
Contra, Terran v. Kaplan, supra. "A consumer calling the defendant would not be exercising her
validation rights and would not be entitled to the statutory cessation of debt collection activities."
Gaetano v. Payco of Wisconsin, Inc., 774 F. Supp. 1404, 1412 (D. Conn. 1990). On the other
hand, the inclusion of a settlement offer that expired shortly before the end of the validation
period has been held not to violate §1692g. Harrison v. NBD, Inc., supra, 968 F. Supp. 837
(E.D.N.Y. 1997).

In Caprio v. Healthcare Revenue Recovery Group, LLC, 12-1846, 2013 WL

765169 (3rd Cir. March 1, 2013), a collection letter stated “If we can answer any questions, or if
you feel you do not owe this amount, please call us toll free at 800-984-9115 or write us at the
above address.” Under local law, a writing was required. The court held that “the Collection
Letter was deceptive because it can be reasonably read to have two or more different meanings,
one of which is inaccurate . . . .”
13. TIME PERIOD

The notice should specify that the debtor has 30 days after receipt of the letter to
dispute the debt. Vera v. Trans-Continental Credit & Collection Corp., 98 Civ. 1866 (DC), 1999
U.S. Dist. LEXIS 3464, 1999 WL 163162 (S.D.N.Y. Mar. 24, 1999), later opinion, 1999 WL
292623, 1999 U.S. Dist. LEXIS 3464 (S.D.N.Y. May 10, 1999). The debtor may send the
dispute within that period; requiring receipt of a response within 30 days is a violation because it
shortens the statutory period. Chauncey v. JDR Recovery Corp., 118 F.3d 516 (7th Cir. 1997).

Specifying that a dispute must be sent within 30 days from the date of the letter is
a violation for the same reason. Cavallaro v. Law Office of Shapiro & Kreisman, 933 F. Supp.
1148, 1151 (E.D.N.Y. 1996) (notice which stated that the consumer could dispute the debt
"within thirty (30) days from the date of this notice" is clearly an inaccurate statement); Rivera v.
Amalgamated Debt Collection Servs., 462 F. Supp. 2d 1223 (S.D.Fla. 2006) (“By mailing notices
stating that debtors have thirty days from the date of the letter to challenge the debt, Defendant
led debtors to believe that they had less than thirty days to obtain verification of the debt. That is
a clear violation of the statute . . . .”); Owens v. Hellmuth & Johnson, 550 F.Supp.2d 1060, 1068
(D.Minn. 2008) (“a dunning letter demanding payment within 30 days of the date thereof violates
the statute”); Swift v. Maximus, Inc., 04cv216, 2004 U.S.Dist. LEXIS 13190, 2004 WL 1576618
(E.D.N.Y., July 15, 2004) (“letter stating “[p]ayment in full of this debt must be received within
30 days after the date of this notice to avoid further collection activities” violates FDCPA as a
matter of law); McCafferty v. Schwartzkopf Law Office, No. 4:10 CV 1401 RWS, 2011 U.S. Dist.
LEXIS 119316, 2011 WL 4916382 (E.D.Mo., October 17, 2011), reconsideration denied, 2012
U.S. Dist. LEXIS 6482, 2012 WL 176439, (E.D. Mo. Jan. 20, 2012) (summary judgment granted
for consumer where “The validation notice indicated the recipient must dispute the validity of the
debt within thirty days of receipt of the letter. However, the letter demanded payment within
thirty days [of the] date of the letter.”); Larsen v. JBC Legal Group, P.C., 533 F.Supp.2d 290,
306 (E.D.N.Y. 2008) (letter demanding payment within 30 days from the date of a notice violates
§1692g as a matter of law); Edstrom v. All Services and Processing, C04-1514 BZ, 2005
U.S.Dist. LEXIS 2773 (N.D.Cal. Feb. 22, 2005) (“thirty days from the date of the letter” violates
§1692g as a matter of law); Turner v. Universal Debt Solutions, Inc. (In re Turner),
07-11450-DHW / 07-1139- DHW, 2008 Bankr. LEXIS 2480, *10-13 (Bankr. M.D. Ala. Sept. 5,
2008), adopted, 436 B.R. 153 (M.D. Ala. 2010) (similar); Bishop v. Global Payments Check
Recovery Services, Inc., Civ. No. 03-1018, 2003 U.S. Dist. LEXIS 11013, 2003 WL 21497513
(D. Minn. June 25, 2003) (violation where “Global's letter tells Mr. Bishop that if he does not pay
the debt within 30 days from the date of the letter he may face civil and criminal penalties. It also
tells him that he can contest the validity of the debt within 30 days from receipt of the letter.”);

38
Turner v. Shenandoah Legal Group, P.C., 3:06cv045, 2006 U.S.Dist. LEXIS 39341, 2006 WL
1685698 (E.D.Va., June 12, 2006) (report and recommendation) (similar); Spears v. Brennan, 745
N.E.2d 862, 874 (Ind. App. 2001) (ambiguity as to whether rights run from date of notice or date
of receipt violates FDCPA); Philip v. Sardo & Batista, P.C., No. 11-4773 (SRC), 2011 U.S. Dist.
LEXIS 130267, 2011 WL 5513201 (D.N.J. Nov. 10, 2011) (statement that debtor had “thirty
days from the date of the letter to exercise of preserve certain rights under the FDCPA” is
violation even where correct period is stated elsewhere); Ardino v. Lyons, No. 11-848
(NLH/KMW), 2011 U.S. Dist. LEXIS 143586 (D.N.J., Dec. 14, 2011) (same).
14. LANDLORD NOTICES

Eviction notices that are sent out by a "debt collector" and demand money in less
than 30 days violates the FDCPA. Romea v. Heiberger & Associates, 163 F.3d 111 (2d Cir.
1998). However, if the landlord or servicing agent sends the notice it is not a "debt collector"
subject to the FDCPA.
15. THREAT NOT REQUIRED

Cases hold that any contradiction of the §1692g warnings is a violation, and that it
is not necessary to establish a violation that the contradiction be "threatening" or visually
overshadow the required notice. Russell v. Equifax A.R.S., 74 F.3d 30 (2d Cir. 1996); Adams v.
Law Offices of Stuckert & Yates, 926 F.Supp. 521 (E.D.Pa. 1996); Flowers v. Accelerated Bureau
of Collections, 96 C 4003, 1997 U.S.Dist. LEXIS 3354, 1997 WL 136313 (N.D.Ill. Mar 19,
1997). In other words, anything that confuses unsophisticated consumers as to their § 1692g
rights, is sufficient to violate §1692g.
16. OWNER OF THE DEBT

The present owner of the debt must be identified in a reasonable manner. Luzinski
v. Arrow Financial Services, LLC, 05-CV-1322, 2007 U.S. Dist. LEXIS 71788 (E.D.Wisc. Sept.
26, 2007) (“Capital One” acceptable where debt is owned by Capital One Bank and serviced by
Capital One Services); Bode v. Encore Receivable Management, Inc., 05-CV-1013, 2007 U.S.
Dist. LEXIS 64477, 2007 WL 2493898 (E.D. Wis. Aug. 30, 2007) (also no violation where
“Capital One Services” used); Braatz v. Leading Edge Recovery Solutions, LLC, 11 C 3835, 2011
U.S. Dist. LEXIS 123118, 2011 WL 9528479 (N.D.Ill., Oct. 20, 2011); Walls v. United
Collection Bureau, Inc., 11 C 6026, 2012 U.S. Dist. LEXIS 68079, 2012 WL 1755751 (N.D. Ill.
May 16, 2012); Lee v. Forster & Garbus LLP, NO. 12-CV-420 DLI CLP, 2013 WL 776740
(E.D.N.Y. Mar 01, 2013) (“Specifically, the entity is listed in two ‘reference’ lines as ‘NCOP XI,
LLC A/P/O CAPITAL ONE.’ (Am.Compl .Ex. A.) Listing NCOP on the reference lines,
particularly when followed by the unusual abbreviation ‘A/P/O’ and the name of the original
creditor, easily could have failed to alert the least sophisticated consumer that her debt was now
owned by NCOP.”); Janetos v. Fulton Friedman & Gullace, LLP, 12 C 1473, 2013 WL 791325,
*5 (N.D.Ill. Mar 04, 2013).

Disclosure of a servicing agent or another debt collector instead of the owner of

the debt is not sufficient. Bourff v. Rubin Lublin, LLC, No. 10-14618, 674 F.3d 1238; 2012 U.S.
App. LEXIS 5613, 2012 WL 971800 (11th Cir. Mar. 15, 2012); Shoup v. McCurdy & Candler,
465 Fed. Appx. 882, 2012 U.S. App. LEXIS 6443 (11th Cir. March 30, 2012); Wallace v.
Washington Mutual Bank, F.A., 683 F.3d 323 (6th Cir. 2012); Hepsen v. Resurgent Capital
Services, LP, 09-15435, 2010 U.S.App. LEXIS 12587 (11th Cir., June 17, 2010); Park v Shapiro
& Swertfeger, LLP, 1:12cv1132, 2013 WL 603880 (N.D. Ga. Jan. 9, 2013).

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 17. OTHER §1692g VIOLATIONS

a. Notice on reverse

Where the validation notice is placed on the back of the correspondence, without a
legible and reasonably prominent reference on the front, §1692g is violated. Riveria v. MAB
Collections, Inc., supra, 682 F. Supp. 174, 178 (W.D.N.Y. 1988); Ost v. Collection Bureau, Inc.,
493 F.Supp. 701 (D.N.D. 1980); Phillips v. Amana Collection Servs., 89-CV-1152, 1992 WL
227839, 1992 U.S. Dist. LEXIS 13558 (W.D.N.Y. Aug. 25, 1992); see also, Rabideau v.
Management Adjustment Bureau, 805 F.Supp. 1086 (W.D.N.Y. 1992); Colmon v. Payco-General
American Credits, 774 F. Supp. 691 (D.Conn. 1990). Contra: Blackwell v. Professional Business
Services, Inc., 526 F.Supp. 535 (N.D.Ga. 1981). However, the enclosure of a separate 8-1/2 x
11" validation notice in the same envelope has been found to be acceptable. Cavallaro v. Law
Office of Shapiro & Kreisman, 933 F.Supp. 1148 (E.D.N.Y. 1996).
b. Charge for validation

The FTC staff has stated that a debt collector may not charge for furnishing
validation information. One decision held that such a charge did not violate §1692g per se, but
found it unlawful under §1692f on the ground that it was not authorized by contract or law.
Sandlin v. Shapiro & Fishman, 919 F. Supp. 1564 (M.D.Fla. 1996); see also Harvey v. United
Adjusters, 509 F.Supp. 1218, 1221 (D.Ore. 1981) (defendant's choice of validation notice
language cannot impose additional burdens on the debtor).
c. Failure to provide mailing address

A debt collector violates §1692g by failing to provide its address so that the debtor
can exercise his right to validate the debt. Failure to include the collector's address violates
§1692g even if the complete text of the §1692g notice is provided and nothing requires action in
less than 30 days. Cortez v. Trans Union Corp., 94 C 7705, 1997 WL 7568, 1997 U.S. Dist.
LEXIS 31 (N.D. Ill. Jan. 3, 1997); Wegmans Food Markets, Inc. v. Scrimpsher, 17 B.R. 999, 1014
(Bankr. N.D.N.Y. 1982) ("The absence of a return address on a debt collector's notices effectively
nullifies the consumer's rights set out in 15 U.S.C 1692g, which arise from a consumer's written
notification to the debt collector"; emphasis in original)
d. Misdirecting contacts

Directing the consumer to contact the creditor rather than the debt collector if he
disputes the debt violates §1692g. Blair v. Collectech Systems, Inc., 97 C 8630, 1998 WL
214705, 1998 U.S. Dist. LEXIS 6173 (N.D. Ill. April 24, 1998); Macarz v. Transworld Systems,
26 F.Supp. 2d 368 (D.Conn. 1998). Contacting the creditor does not preserve the consumer's
rights.
e. Cannot insist on reason for dispute

The debt collector cannot require the consumer to articulate a reason for disputing
the debt. Sambor v. Omnia Credit Services, 183 F.Supp.2d 1234 (D.Haw. 2002) (“the FDCPA
does not require the consumer to provide any reason at all in order to dispute a debt”); Whitten v.
ARS National Services, Inc., . 00 C 6080, 2002 U.S.Dist. LEXIS 9385 (N.D.Ill., May 23, 2002);
Mendez v. M.R.S. Assocs., 03 C 6753, 2005 U.S.Dist. LEXIS 13705, *13 (N.D.Ill. June 27, 2005)
(consumer can dispute debt for “a good reason, a bad reason, or no reason at all”); Forsberg v.
Fid. Nat'l Credit Servs., 03cv2193-DMS(AJB), 2004 U.S. Dist. LEXIS 7622 (S.D.Cal., Feb. 26,

40
2004).
f. Identification of debt

While §1692g does not require that the original creditor’s name and address must
be provided except on request, the failure to identify the debt in an intelligible manner in a state
court complaint has been held to violate §1692e. Caudillo v. Portfolio Recovery Associates,
LLC, 12cv200, 2013 WL 4102155 (S.D.Cal., Aug. 13, 2013) (“This Court and others have
repeatdly held that a debt collection complaint that fails to identify the original creditor is both
deceptive and material under the least sophisticated consumer standard, and thus constitutes a
violation of §1692e”); Heathman v. Portfolio Recovery Associates, LLC, No. 12–CV–515–IEG
(RBB), 2013 WL 3746111, *4-5 (S.D.Cal., July 15, 2013); Thomas v. Portfolio Recovery
Associates, LLC, 12cv1188 (S.D.Cal., Aug. 12, 2013).
VII. VIOLATIONS -- DEBT COLLECTION WARNING: 15 U.S.C. §1692e(11)

15 U.S.C. §1692e(11), as amended in 1996, prohibits:

The failure to disclose in the initial written communication with the consumer
and, in addition, if the initial communication with the consumer is oral, in that
initial oral communication, that the debt collector is attempting to collect a debt
and that any information obtained will be used for that purpose, and the failure to
disclose in subsequent communications that the communication is from a debt
collector, except that this paragraph shall not apply to a formal pleading made in
connection with a legal action.

Section 1692e(11) formerly required that the debt collector "disclose clearly in all
communications made to collect a debt or to obtain information about a consumer, that the debt
collector is attempting to collect a debt and that any information obtained will be used for that
purpose." 15 U.S.C. §1692e(11).

The reason for this requirement is illustrated by decisions under the Federal Trade
Commission Act prior to the enactment of the FDCPA, which show that debt collectors would
send people mail purporting to seek employment references, inviting the recipient to collect a
prize, or otherwise disguising its true purpose. One enterprising pair of debt collectors operated
under such names as "National Research Company," "National Marketing Service," "United
States Credit Control Bureau," "Claims Office," "Bureau of Verification," "Bureau of
Reclassification," "Reverification Office" and "Disbursements Office". They would disseminate
-- at the rate of 700,000 every six months -- forms with titles such as "Current Employment
Records" and "Change of Address" and requesting address, employment, banking, and similar
information. They also sent out "Claimants Information Questionnaires" asking the recipient to
verify that he or she was the party entitled to receive unclaimed money. Mohr v. FTC, 272 F.2d
401 (9th Cir. 1959) (affirming first cease and desist order); People v. National Research Co., 201
Cal.App.2d 765, 20 Cal.Rptr. 516 (1962) (injunctive action to restrain practices); In re
Floersheim, 316 F.2d 423 (9th Cir. 1963) (contempt proceeding based on first cease and desist
order); Floersheim v. FTC, 411 F.2d 874 (9th Cir. 1969) (affirming another cease and desist
order); Floersheim v. Weinburger, 346 F.Supp. 950 (D.D.C. 1972), aff'd, Floersheim v. Engman,
161 U.S.App. D.C. 30, 494 F.2d 949 (1973) (attempted declaratory action by collectors seeking to
determine whether they were in compliance with the second cease and desist order); United States
v. Floersheim, CV 74-484-RF, 1980 WL 1852, 1980 U.S.Dist. LEXIS 11788, 1980-2 CCH Trade
Cas. ¶63,368 (C.D.Cal. 1980) (civil penalty action for noncompliance with second cease and
desist order).

41
 Other debt collectors used notices representing that the sender had correspondence
or packages for delivery to a debtor; these would be sent to references used by a debtor. Dejay
Stores, Inc. v. FTC, 200 F.2d 865 (2d Cir. 1952); Rothschild v. FTC, 200 F.2d 39 (7th Cir. 1952).

In In re London Credit & Discount Corp., 78 FTC 541 (1971) (consent order),
debt collectors sent letters purporting to be connected with auditing procedures. The collectors
were enjoined from "Representing, directly or by implication, that any letter, demand, inquiry or
other communication originated by respondents was originated by an independent auditing or any
other person, firm or corporation."

Another such consent order was entered in In re Marjorie P. Ingram, 67 FTC

1065 (1965), where the collectors were enjoined from falsely "[r]epresenting, directly or by
implication, that the respondents are engaged in the business of auditing the accounts and records
of others." (67 FTC at 1072) See also, Opinion of the Attorney General of the State of Arizona,
77-174, 1977 Ariz. AG LEXIS 66 (Sept. 5, 1977), finding it improper for a collection agency to
send out documents entitled "Audit Verification."

Yet other collectors called themselves "State Credit Control Board", Slough v.
FTC, 396 F.2d 870 (5th Cir. 1968), "Business Research" and "Affiliated Credit Exchange,"
Bernstein v. FTC, 200 F.2d 404 (9th Cir. 1952), "Manpower Classification Bureau" and
"American Deposit System," Rothschild v. FTC, supra, 200 F.2d 39 (7th Cir. 1952), "General
Forwarding System," Silverman v. FTC, 145 F.2d 751 (9th Cir. 1944), "National Retail Board of
Trade" and "National Liquidators, Inc.", In re National Retail Board of Trade, 57 FTC 666
(1960), "Retail Board of Trade," In re Rice, 53 FTC 5 (1956), "Allied Information Service" and
"National Deposit System," In re Wacksman, 56 FTC 1615 (1960), "Cavalier Reserve Fund" and
"Liberty Reserve Fund," In re Pitler, 56 FTC 803 (1960) and "National Clearance Bureau,"
National Clearance Bureau v. FTC, 255 F.2d 102 (3d Cir. 1958).

Another collection agency called itself the "United States Association of Credit
Bureaus." The use of this name was held to violate §5 of the FTC Act on the ground that it was
not an "association," or a "credit bureau," nor connected with the "United States." In re United
States Ass'n of Credit Bureaus, Inc., 58 FTC 1044 (1961), aff'd United States Ass'n of Credit
Bureaus, Inc. v. FTC, 299 F.2d 220 (7th Cir. 1962).
VIII. VIOLATIONS – TELEPHONE HARASSMENT

The nature and frequency of calls that results in a violation of 15 U.S.C. §1692d is
fact-intensive and dependent on such matters as whether calls are answered, whether calls are
made immediately after the consumer terminates a conversation, and similar facts. In Roth v.
NCC Recovery, Inc., No. 1:10 CV 02569, 2012 U.S. Dist. LEXIS 101592, 2012 WL 2995456
(N.D.Ohio July 23, 2012), the court stated:

Courts recognize, however, there is no bright line rule regarding the number of
calls which creates the inference of intent. Hicks v. America's Recovery Solutions,
LLC, 2011 WL 4540755, at *6 (N.D.Ohio 2011). For instance, in Sanchez v.
Client Services, 520 F.Supp.2d 1149, 1160 (N.D. Cal. 2007), the court granted
summary judgment to the plaintiff on a § 1692d(5) claim based on 54 calls over a
six-month period, including a day in which six calls were made. Yet, in Tucker v.
The CBE Group, Inc., 710 F.Supp.2d 1301, 1305 (M.D. Fla. 2010), the court
granted the defendant's motion for summary judgment despite 57 calls, including 7
in one day. Finally, the court in Akalwadi v. Risk Mgmt. Alternatives, Inc., 336

42
 F.Supp.2d 492, 506 (D. Md. 2004), determined that intent was a jury question
when the defendant placed 28 calls over a two-month period, but the Saltzman
court granted summary judgment to the defendant, despite a higher number of calls
than in Akalwadi over a similar time period. 2009 WL 3190359 at *6-7.

Defendant argues that the volume and frequency of calls in this case merit
summary judgment in its favor. It points to the fact that only 50 calls were made
over an eight-month period, a lower volume than many cases in which courts
granted summary judgment to the debt collector. Further, NCC claims that it only
called twice in the same day on only two occasions.

Yet, the Court determines that the number of calls is not entirely dispositive in this
case. Instead, the nature, extent, and context of the calls bear review. Ms. Roth's
Affidavit indicates that NCC continued to call her on a regular and frequent basis,
despite being advised that the nursing home advised her that her father's final
expenses would be covered. There is, further, an indication from both parties that
Ms. Roth spoke with NCC representatives on several occasions and that NCC
representatives left messages on her phone. As such, the Court does not find a
significant disparity between the number of calls placed and answered, a factor
that courts, such as the Saltzman court have used to excuse high call volumes on
the theory that it indicates a difficulty in reaching the consumer. Given the
evidence before the Court, a reasonable jury could find the requisite intent to
harass or annoy. Thus, a genuine dispute of material fact remains and summary
judgment is denied in this action.

In Dudis v. Mary Jane M. Elliott, P.C., No. 11-14024, 2012 U.S. Dist. LEXIS 108069, 2012 WL
3150821 (E.D.Mich., August 2, 2012), the court held:

[T]he Court must determine whether Defendant's behavior amounts to harassment,

oppression, or abuse within the meaning of the statute's general provision; and
whether its phone calls occurred repeatedly [*8] or continuously with the intent to
annoy, abuse, or harass. "The determination of whether a debt collection agency's
telephone calls amount to actionable harassment or annoyance turns not only on
the volume of calls made, but also on the pattern of calls. Saltzman v. I.C. Sys.
Inc., No. 09-10096, 2009 WL 3190359 at *7 (E. D. Mich. Sept. 30, 2009) (quoting
Akalwadi v. Risk Management Alternatives, Inc., 336 F. Supp.2d 492, 505 (D.
Md. 2004)) (internal quotations omitted)). Additionally, "intent may be inferred
from the . . . substance of the telephone calls that [the Plaintiff] received from the
debt collector or the place to which the calls were made." Young v. Asset
Acceptance, LLC, No. 3:09-2477, 2011 WL 1766058 (N.D. Tex. May 20, 2011)
(citing Kerwin v. Remittance Assistance Corp., 559 F. Supp.2d 1117, 1124 (D.
Nev. 2008)). Although the volume, pattern, time, and setting of phone calls is
susceptible to a degree of subjectivity, some factual benchmarks include: multiple
calls made over a two-day period that included implications of threats (see Bassett
v. I.C. Systems, Inc., 715 F. Supp.2d 803 (N.D. Ill. 2010); continuous calls placed
over several days to both the plaintiff's home [*9] and cell phone (see Rucker v.
Nationwide Credit, Inc., No. 09-2420, 2011 WL 25300 (E.D. Cal. Jan. 5, 2011));
multiple phone calls placed in one day before 9:00 A.M. (see Kerwin, 559 F. Supp.
2d 1117); 200 calls made over the course of nineteen months, included multiple
calls in one day after the debtor warned the defendant (see Josephine v. J.J.
MacIntyre Cos, LCC, 238 F. Supp. 2d 1158 (N.D. Calif. 2002)); and three calls in
a five hour period with messages (see Akalwadi, 336 F. Supp. 2d 492).

43
 Plaintiff asserts that his complaint is based on three to four phone calls, to his
house, over the course of a month. Dudis, however, does not offer any evidence
that conversations took place during these calls or that these calls were made with
the intent to annoy, abuse, or harass. Here, the Court finds that no reasonable juror
given the facts, even when viewed in a light most favorable to the non-moving
party, could possibly find in favor of Dudis. Furthermore, none of the benchmarks
used to establish intent to harass or annoy are present. Accordingly, the Court finds
Defendant is entitled to summary judgment.

In Hoover v. Monarch Recovery Mgmt., Inc., No. 11-cv-04322, 2012 U.S. Dist. LEXIS 120948,
2012 WL 3638680 (E.D.Pa., August 24, 2012), the court held:

§ 1692d(5): Calling repeatedly or continuously

Next, plaintiff contends that defendant violated subsection 5 of § 1692d, which

prohibits "[c]ausing a telephone to ring or engaging any person in telephone
conversation repeatedly or continuously with intent to annoy, abuse, or harass any
person at the called number." 15 U.S.C. § 1692d(5). Hence, plaintiff must provide
sufficient facts to support a plausible claim not only that defendant contacted her
by telephone repeatedly or continuously, but also did so with intent to annoy,
abuse, or harass her.

Plaintiff avers that defendant contacted her by telephone, on average, more than
ten times per week, for approximately eleven weeks.[25] To determine whether
plaintiff has pled conduct by defendant constituting "actionable harassment or
annoyance turns not only on the volume of calls made, but also on the pattern of
the calls." Shand-Pistilli v. Professional Account Services, Inc., 2010 U.S.Dist.
LEXIS 75056, at *11 (E.D.Pa. July 26, 2010)(O'Neill, S.J.).

In Shand-Pistilli, my colleague Senior United States District Judge Thomas N.

O'Neill, Jr. concluded that plaintiff pled sufficient facts to support a reasonable
inference that the purpose of defendant's repeated phone calls was to harass or
annoy plaintiff. Id. at *11-12. While unlike in Shand-Pistilli, plaintiff in this case
does not aver that she asked defendant to stop contacting her, plaintiff does aver
that the calls made to her home telephone were constant and continuous,[26] as
plaintiff in Shand-Pistilli also alleged. Id. at *12.
Furthermore, the volume of calls in this case, 110 times over an eleven-week
period, is significantly higher than other cases in which courts in this judicial
district permitted the parties to reach the discovery stage. For example, in
Shand-Pistilli, the court denied a defendant's motion to dismiss a § 1692d(5) claim
when plaintiff averred that defendant had made "continuous" calls to plaintiff,
without specifying an amount. Id. at *12-13.

In addition, my colleague United States District Judge Gene Pratter denied

defendant's motion to dismiss a § 1692d(5) claim when plaintiff identified nine
times when defendant called her in a thirty-day period, and averred that defendant
called her other times as well. Carr v. NCO Financial Systems, Inc., 2011
U.S.Dist. LEXIS 145993 (E.D.Pa. Dec. 20, 2011) (Pratter, J.).

Plaintiff cites the decision in Krapf v. Nationwide Credit Inc., 2010 U.S.Dist.
LEXIS 57849 (C.D.Cal. May 21, 2010), where the United States District Court for

44
 the Central District of California noted that district courts disagree as to the
volume of calls sufficient to raise a plausible claim under § 1692d(5).[27]
Although the cases cited by the district court in Krapf require plaintiff to meet a
high threshold of call volume, plaintiffs in those cases were permitted to proceed
through discovery before summary judgment was granted for failure to meet that
threshold.

For example in Tucker v. The CBE Group, Inc., 710 F.Supp.2d 1301 (M.D.Fla.
2010) the court granted defendant's motion for summary judgment when plaintiff
averred that defendant called her 57 times over an unspecified period, and once
called her seven times in one day. In Saltzman v. I.C. System, Inc., 2009 U.S.Dist.
LEXIS 90681, at *10-11 & n.4 (E.D.Mich. Sept. 30, 2009) the court granted
defendant's motion for summary judgment when plaintiff averred that defendant
called plaintiff between ten and twenty times successfully and between twenty and
fifty times unsuccessfully over approximately one month.

Defendant cites no instances where courts precluded a case with such a high
volume of calls from proceeding to the discovery stage. Rather, Shand-Pistilli and
Carr, discussed above, reveal that in this judicial district, judges lean toward giving
plaintiff an opportunity to conduct discovery if plaintiff alleges a significant
volume of calls, even without alleging separate facts supporting defendant's intent.

Defendant cites a Western District of Washington case in which the United States
District Court found that § 1692d(5) "does not even prevent a collector from
calling multiple times in a week, or even in a day.[28] Allegations of daily, or
nearly daily, phone calls do not raise a triable issue of fact to claims under §
1692d(5)." Dudley v. Powell Law Office, P.C., 2011 U.S.Dist. LEXIS 111688, at
*2 (W.D.Wash. Sept. 29, 2011).

In Dudley, the court granted defendant's motion to dismiss plaintiff's § 1692d(5)

claim. However, the Dudley case is distinguishable from the instant matter because
in Dudley, defendant called plaintiff only four times in one day, and at no other
time. On the other hand, in the case before this court, defendant called plaintiff
twice per day, each day for eleven weeks.

As noted above, "whether conduct harasses, oppresses, or abuses will be a question

for the jury". Regan, 2009 U.S.Dist. LEXIS 112046, at *18 (quoting Jeter, 760
F.2d at 1179). Absent authority in this district that the volume and pattern of calls
in this case fails to demonstrate an intent to harass, I find that plaintiff has pled
sufficient facts to support a reasonable inference that defendant violated §
1692d(5) of the FDCPA. Accordingly, defendant's motion for judgment on the
pleadings regarding plaintiff's § 1692d(5) claim is denied.

In Dunning v. Portfolio Recovery Associates, LLC, No. 11–62080, 2012 WL 5463294 (S.D.Fla.,
Nov. 9, 2012), the court held:

. . . The parties agree that Defendant called Plaintiff between 50 and 100 times in
2011, and not more than 20 times in 2012. . . . Plaintiff alleged in his amended
complaint that since approximately June 2011, Defendant called Plaintiff up to
four times per day, called Plaintiff from various numbers, and continued to call
Plaintiff after Plaintiff asked Defendant to stop calling. The Court finds that, based
upon the evidence presented in the record, there is a genuine issue of fact

45
regarding whether anyone from Portfolio ever actually spoke to Plaintiff in
connection with collecting his debts and, if so, over the substance of the
communication. Plaintiff testified at his deposition that he spoke with Portfolio
representatives over the telephone on nine or ten occasions. . . . Plaintiff also
testified at his deposition that, after Plaintiff requested that Defendant cease
communication, Defendant placed more than eighteen phone calls to Plaintiff. . . .
Plaintiff testified at his deposition that, during a phone conversation, Defendant's
representative “got very rude” and “was, like, a sergeant to me.” . . . However,
Defendant has no record of actually speaking with Plaintiff. . . .

Plaintiff maintains that it has presented evidence sufficient to create a fact issue for
the jury as to the harassing nature of Defendant's calls. Plaintiff relies upon
Valentine v. Brock & Scott, PLLC, 2010 WL 1727681, *5 (D.S.C. April 26, 2010)
(allegation that defendant called plaintiff 11 times over a period of 19 days, with
two of those calls occurring on the same day, sufficient to withstand motion to
dismiss plaintiff's § 1692d(5) claim); Bingham v. Collection Bureau, Inc., 505
F.Supp. 864 (D.C.N.D.1981) (a single recall by debt collector after plaintiff hung
up phone constituted harassment under § 1692d). Additionally, Plaintiff cites cases
demonstrating that a debt collector's continued calls following a verbal demand to
cease calling may violate § 1692(d). See, e.g., Pratt v. CMRE Financial Services,
Inc., 2012 WL 86957, *3 (E.D.Mo. Jan.11, 2012) (holding that intent to harass
“may be inferred by evidence that the debt collector continued to call after being
asked not to call.”) (citing cases holding same). Plaintiff also correctly notes that
intent to annoy, abuse, or harass may be inferred from the substance of calls
received from the debt collector. See, e.g., Dudis v. Mary Jane M. Elliott, P.C.,
2012 WL 3150821, *3 (E.D.Mich. Aug.02, 2012).

Defendant, on the other hand, argues that the volume of calls to Plaintiff in this
case is insufficient as a matter of law to constitute harassment under § 1692d and §
1692d(5). Defendant relies heavily on three unreported cases from the Middle
District of Florida: Waite v. Financial Recovery Services, Inc., 2010 WL 5209350
(M.D.Fla. Dec.16, 2010) (granting summary judgment in favor of debt collector
who made 132 collection calls to plaintiff over nine month period, unaccompanied
by any other egregious conduct evincing an intent to harass, annoy, or abuse);
Tucker v. CBE Group, Inc., 710 F.Supp.2d 1301 (M.D.Fla. May 05, 2010)
(granting summary judgment in favor of debt collector who made fifty-seven calls
to plaintiff, where there was no demonstration of oppressive conduct such as
repeatedly making calls after it was asked to cease, nor was there a verbal request
to cease calling); and Druschel v. CCB Credit Services, Inc., 2011 WL 2681637
(M.D.Fla. June 14, 2011) (recommending summary judgment in favor of debt
collector who called debtor fourteen times within two weeks).

Defendant's argument is misplaced, as it is directed at the call volume, and

disregards the remainder of the Plaintiff's contentions in this action that Defendant
engaged in harassment through the content of its calls to Plaintiff, and by
continuing to call him multiple times after Plaintiff asked Defendant ten times to
stop calling. Rather, the Court finds that Plaintiff has presented sufficient evidence
to create a fact issue for the jury as to the harassing nature of Defendant's calls.
Defendant called Plaintiff between 50 and 100 times in 2011, and not more than 20
times in 2012. There are genuine issues of material facts regarding whether any
representative of Defendant spoke to Plaintiff, what Defendant's representatives
said to Plaintiff, whether Plaintiff repeatedly requested that Defendant cease

46
 communication, and whether Defendant continued to call Plaintiff after Plaintiff
repeatedly requested that Defendant cease calling him. . . .

In Stinson v. Receivables Management Bureau Inc., No. 2:12-cv-02558-AKK, 2013 WL 1278966

(N.D.Ala. March 26, 2013), the court held:

Taking the facts in the light most favorable to Stinson, RMBI called Stinson's
home "approximately 100 times" between March and September 2009, left
between 34 and 37 voicemails, and made clear that it was attempting to collect a
debt from only Michael Bole. Doc. 16-1 at 12, 25, 52. It is also undisputed that
RMBI never spoke with Stinson and that Stinson never informed RMBI that it had
the wrong number or asked RMBI to stop calling. Id. at 52-53. Instead, RMBI's
computer automatically stopped calling after it made a certain number of attempts.
Id. at 18. Since RMBI did not attempt to wrongfully collect the debt from Stinson,
call at inappropriate times or an inappropriate number of times per day, or use
otherwise offensive language, Stinson's claim under § 1692d is based solely on the
allegedly high volume of calls. Doc. 20 at 30. A claim based solely on the number
of calls is insufficient to raise a cause of action because, as courts in this circuit
have generally found, a plaintiff must also show that the creditor engaged in other
inappropriate conduct.

In Nigro v. Mercantile Adjustment Bureau, LLC, No. 10-CV-1037S, 2013 WL 951497

(W.D.N.Y., March 12, 2013), the court stated:

Defendant correctly asserts that, under the circumstances of this case, the 72 phone
calls in a nine-month period are insufficient as a matter of law to establish a
violation of § 1692d(5). Even a high call volume will be insufficient to raise a
triable issue of fact with respect to this provision where, as here, there is an
absence of some indicia of egregious conduct. Carman, 782 F. Supp. 2d at 1232
(over 140 calls in two month period insufficient to establish violation where record
lacked any evidence of egregious conduct); See Chavious, 2012 WL 113509, *2
(defendant entitled to summary judgment where 36 calls in less than two months
were made at reasonable times and not immediately following another); Lynch v.
Nelson Watson & Assocs., LLC, No. 10-2025-EFM, 2011 WL 2472588, *2 (D.
Kan. June 21, 2011)(56 calls in three month period, without more, insufficient to
establish violation).
In Chavious v. CBE Group, Inc., 2012 U.S Dist. LEXIS 4362 (E.D.N.Y. Jan. 12, 2012), the
court held:

Plaintiff has not established a triable issue of fact in this case. Courts have awarded
defendants summary judgment where the volume and pattern of calls demonstrates
an intent to contact debtors rather than an intent to annoy, abuse, or harass them.
See Carman v. CBE Group, Inc., 782 F. Supp. 2d 1223, 1232 (D. Kan. 2011) [*6]
("[T]he evidence suggests an intent by CBE to establish contact with plaintiff,
rather than an intent to harass."); Tucker v. CBE Group, Inc., 710 F. Supp. 2d
1301, 1305 (M.D. Fla. 2010). In these cases, as here, the caller was unable to reach
anyone on the other end of the phone or the call recipient did not ask the defendant
to refrain from calling. Carman, 782 F. Supp. 2d at 1232; Tucker, 710 F. Supp. 2d
at 1305. In the Court's view, the volume and pattern of calls in this case--thirty-six
calls over approximately two months, all made at reasonable times and not one
immediately following another--is consistent with cases in which other courts have

47
 awarded defendants summary judgment on Section 1692d(5) claims. See, e.g.,
Lynch, 2011 U.S. Dist. LEXIS 66031, 2011 WL 2472588, at *2 (fifty-six calls
over approximately three months, without more, was not an FDCPA violation);
Carman, 782 F. Supp. 2d at 1227 (149 calls over two months, without more, was
not a violation); Clingaman v. Certegy Payment Recovery Svcs., No. 10—2483,
2011 U.S. Dist. LEXIS 56368, 2011 WL 2078629, at *4 (S.D. Tex. May 26, 2011)
(fifty-five calls between March 4 and June 18 was not a violation where plaintiff
never asked defendant to stop calling); Jones v. Rash Curtis & Assocs., No. 10-
CV-0225, 2011 U.S. Dist. LEXIS 59703, 2011 WL 2050195, at *2-3 (N.D. Cal.
Jan. 3, 2011) [*7] (179 calls was not a violation where, among other things,
plaintiff did not ask defendant to stop calling).
Instead, plaintiff requests that the Court consider only the call volume to determine
that a genuine issue of material fact exists for trial. Although plaintiff correctly
identifies some disagreement among district courts as to the specific volume and
pattern of calls that allows a plaintiff to raise a triable issue of fact regarding the
defendant's intent to annoy or harass, plaintiff fails to note that district courts
generally require a high call volume coupled with egregious conduct in order for
the court to find harassment. See Bingham v. Collection Bureau, Inc., 505 F. Supp.
864 (D. N.D. 1981) (fourteen calls in a one month period is not harassment but
when calls were coupled with the immediate recalling of a debtor after the debtor
hung up, the calls were harassment); Chiverton v. Fed. Fin. Group, Inc., 399 F.
Supp. 2d 96, 101 (D. Conn. 2005) (using abusive language is a violation of
FDCPA); Kuhn v. Account Control Technology, Inc., 865 F. Supp. 1443, 1453
(D.Nev. 1994) (six phone calls in twenty-four minutes, including immediately
recalling the debtor after she hung up on the collector, was harassment). However,
merely placing calls, without any other abusive conduct, is not harassment. See
Shand-Pistilli v. Prof'l Account Servs., 2011 U.S. Dist. LEXIS 64446 (E.D. Pa.
June 16, 2011) (ten calls over seventy-three days was not sufficient by itself to
raise a genuine issue of material fact as to defendant's intent in making the phone
calls); Waite v. Fin. Recovery Servs., 2010 U.S. Dist. LEXIS 133438 (M.D. Fla.
Dec. 16, 2010) (placing four calls within a single day without other oppressive
conduct did not constitute harassment under § 1692d (5)); Tucker v. CBE Group,
Inc., 710 F. Supp. 2d 1301, 1305-1306 (M.D. Fla. 2010) (making no more than
seven calls in a single day and not calling back after leaving a message
demonstrated that defendant made calls to reach plaintiff rather than to harass her).
In Griffiths v. Sentry Credit, Inc., Civil No. 10-6338-AA (D.Ore. Aug. 11, 2011), the court stated:

In the context of collection calls, "[w]hether there is an actionable harassment or

annoyance turns not only on the volume of calls made, but also on the pattern of
the calls." Joseph v. J.J. MacIntyre Companies, 281 F.Supp.2d 1156, 1168
(N.D.Cal. 2002). For example, where the "collection agency's employees had made
more than 90 calls to consumer's home, the content of the calls had been harassing
in nature, employees had failed to identify themselves when called, had allowed
the phone to ring repeatedly and called back immediately after consumers hung up
the phone raised fact issues as to whether employees' conduct was offensive,
precluding summary judgment." Arteaga v. Asset Acceptance, LLC, 733
F.Supp.2d 1218, 1227 (E.D.Cal. 2010). Moreover, the court looks to whether the
calls were made to debtor's work place or to debtor's residence at inconvenient
hours. Id. Finally, the court looks to the number of calls made and whether the
calls were made numerous times in the same day or within a short period of time.

48
 Id.

None of the egregious types of conduct identified above are present in this case.
Plaintiff presents no evidence that defendant called his place of employment,
called at odd hours, called continuously, or conveyed any misleading information.
Moreover, there is no evidence defendant caused plaintiff's telephone to ring
continuously or repeatedly engaged any person in telephone conversations with the
intent to annoy or harass. 15 U.S.C. § 1692d(5). Indeed, defendant never actually
spoke with anyone, it merely left messages at the phone number its client provided
it to contact plaintiff.

Numerous courts construing Section 1962d have held that more egregious conduct
on behalf of credit collection agencies is not sufficient to maintain a viable claim
under Section 1962d. For example, this court, in Arteaga, held that "`daily' calls
alleged by [plaintiff] failed to raise a genuine issue of material fact as to whether
the communications were so frequent as to be unreasonably or to constitute
harassment under the circumstances."; in Arteaga, 733 F.Supp.2d at 1229; see also
Jiminez v. Accounts Receivable Mgmt., Civ No 09-970, 2010 WL 5829206 at *6
(C.D. Cal. 2010) (granting defendant collection company summary judgment
because there was no evidence of defendant's intent to annoy, abuse or harass
where defendant placed sixty-nine calls over a 115 day period, placed more than
two calls in a day, but did not make calls to defendant's work, and never received a
response to defendant's voice messages); compare Joseph, 281 F.Supp.2d at 1156
(N.D. Cal. 2003) (holding that 75 calls made to plaintiff's residence created
genuine issue of fact as to whether collector's calls were part of a pattern of
harassing conduct; Horkey v. J.V.D.B. & Associates, Inc., 333 F.3d 759 (7th Cir.
2003) (upholding statutory damages under § 1692d for collection agency's phone
calls to plaintiff at her place of employment).

Similarly, here, fourteen calls over a period of four months, where the majority of
the calls were placed approximately once every seven days is not sufficient to
establish that "the natural consequence" of defendant's calls was to "harass,
oppress or abuse" plaintiff. (DUF ¶ 18.) On these facts, "the [c]ourt concludes that
any reasonable juror would only find that [defendant] placed its calls to [p]laintiff
with the intent to reach [him] to collect the [d]ebt, and not because it intended to
annoy, abuse, or harass [him]." Jiminez, 2010 WL 5829206 at *6.
Moreover, plaintiff's own actions, or lack thereof, supports granting defendant
summary judgment on this claim. More specifically, neither plaintiff nor the other
residents of the home ever returned any of defendant's calls. See Tucker v. The
CBE Group, Inc., 710 F.Supp.2d 1301 (M.D. Fla 2010) (granting debt collector
defendant summary judgment were defendant made 57 calls to plaintiff, including
seven calls in one day, because the debt collector never spoke to the debtor, was
never asked to cease calling, and never called back on the same day it left a
message.)

In Miller v. Prompt Recovery Services, Inc., 5:11cv2292, 2013 WL 3200659

(N.D.Ohio June 24, 2013), the court held:

To determine whether a debt collector's calls “amount to harassment, annoyance or

abuse, the volume of the calls must be examined along with the pattern in which
they were made and whether they were accompanied by oppressive conduct.”

49
Pugliese v. Prof'l Recovery Serv., Inc., No. 09–12262, 2010 WL 2632562, at *9
(E.D.Mich. June 29, 2010). “The practice of calling a debtor outside of his or her
home—by calling the debtor's workplace or the homes of a debtor's family and
friends—or calling at inconvenient hours”—can serve as further evidence of
harassment. Arteaga, 733 F.Supp.2d at 1228 (collecting cases involving egregious
conduct offered in addition to a high volume of calls); see Brown v. Hosto &
Buchan, PLLC, 748 F.Supp.2d 847, 852 (W.D.Tenn.2010) ( “the nature of
telephone calls, including their frequency, substance, or the place to which they are
made, provides grounds to infer a debt collector's intent to annoy, abuse, or harass
without any other evidence of the debt collector's motive in calling”).

While plaintiff suggests that defendant's agents contacted her with “great
frequency,” she insists that the exact number of calls is disputed and must be
determined by a jury.5 (Doc. No. 29–1 at 337.) Even when all inferences are
drawn in a light most favorable to plaintiff, however, it is clear that the volume of
the calls—32 or 33 over a four month period, and the frequency of the
calls—“including multiple times per day”6—alone, do not create an issue of fact.
(Id.) Courts have found a much higher volume of calls, alone, insufficient to defeat
summary judgment. See, e.g., Wait v. Fin. Recovery Servs., Inc., No.
8:09–cv–02336, 2010 WL 5209350 (M.D.Fla. Dec.16, 2010) (granting summary
judgment, notwithstanding evidence that debt collector made 132 calls in a nine
month period, often calling four times per day); Carmen v. CBE Group, Inc., 782
F.Supp.2d 1223 (D.Kan.2011) (granting summary judgment although debt
collector called 139 times during two months); Pugliese, 2010 WL 2632562
(finding evidence that the debt collector called 350 times during eight months
insufficient, as a matter of l aw, to establish harassment under the FDCPA). Courts
have also found that even “daily” calls, unaccompanied by other egregious
conduct, do not establish harassment. See Arteaga, 733 F.Supp.2d at 1229
(allegations of “daily” or “near daily” phone calls alone do not raise an issue of
fact as to harassment); see, e.g., Saltzman v. I.C. Sys., Inc., No. 09–10096, 2009
WL 3190359, at *7 (E.D.Mich. Sept.30, 2009) (“[A] debt collector does not
necessarily engage in harassment by placing one or two unanswered calls a day in
an unsuccessful effort to reach the debtor, if this effort is unaccompanied by any
oppressive conduct such as threatening messages.”) (quoting Akalwadi v. Risk
Mgmt.Alternatives, Inc., 336 F.Supp.2d 492, 505 (D.Md.2004)).

*6 In Durthaler v. Accounts Receivable Mgmt., Inc., 854 F.Supp.2d 485 (S.D.Ohio

2012), the court rejected the consumer's argument that evidence of 32 calls placed
by the defendant credit collection agency over a 73–day period, including two calls
placed to the consumer's roommate, constituted harassment. In reaching this
conclusion, the court found that there was no evidence “indicating the nature or the
context of the calls were harassing.” Id. at 491. Here, plaintiff points to no
evidence that, if believed, would show that the 32 or 33 calls were made at
inconvenient times or places, that she asked defendants' representatives to stop
calling, or that defendant's agents placed calls to plaintiff's family members or
friends in an effort to coerce her into satisfying the debt. (See Doc. No. 23 at 199.)
While plaintiff notes that she “indicated during each communication that she could
not make the payments” (Doc. No. 29–1 at 337), the transcripts she relies upon
demonstrate that she continued to engage the representatives in discussions of
possible payment options (often volunteering information or asking questions to
further the discussions), that she agreed to have an agent call again at a later date,
and that she even suggested that the agent should call back at a time when he could

50
 also speak with plaintiff's husband. (See Doc. Nos. 25–2, 3 and 4; Doc. No. 23 at
199 [plaintiff admits that she wanted to work something out with the agents that
called, and that the agents were trying to help her come up with payment options,
which included the possible forgiveness of part of the debt].)

Instead, plaintiff points to a single incident wherein she maintains that defendant's
representative “belitted [her] and ridiculed her financial situation, advising her that
it would take twenty or nineteen years to pay off the debt.” (Doc. No. 29–1 at 337.)
It is clear from the uncontested transcript that defendant's agent was merely
informing plaintiff that her proposed payment schedule would not effectively
resolve the debt. (See Doc. No. 25–3.) In fact, plaintiff admits that the agent's
comment constituted a true statement, as the agent accurately explained that
plaintiff's proposed monthly payments would not even cover the accruing interest.
(See Doc. No. 23 at 172–3.) Even assuming, as plaintiff suggests, that the agent's
tone was “rude” (see Doc. No. 23 at 176), this one true and accurate remark,
amidst considerable evidence that defendant's agents dealt with plaintiff with
professionalism and patience, does not create a triable issue of fact as to the
existence of sanctionable harassment. See, e.g., Durthaler, 854 F.Supp.2d at
491–92 (noting that the agent was “respectful and polite” to the plaintiff even
though the plaintiff was “clearly upset with the representative”); Gallagher v.
Gurstel, Staloch & Chargo, P.A., 645 F.Supp.2d 795, 799 (D.Minn.2009) (single
laugh by employee of debt collector during phone call with debtor was not
harassing, oppressive, or abusive conduct violative of FDCPA). Accordingly, the
Court grants summary judgment in favor of defendant on plaintiff's allegations
under § 1692d.

If sufficient, call volume may establish harassment. In Neu v. Genpact Services,

LLC, No. 11–CV–2246 W(KSC), 2013 WL 1773822 (S.D.Cal., April 25, 2013), the facts showed
“Genpact's placement of 150 telephone calls to Neu within a 51 day period in an attempt to
collect a debt. . . . On one occasion, Genpact called Neu 6 times in one day. . . . Genpact alleges it
left Neu no voice messages to avoid the possibility of third parties overhearing the messages.”
The court held that this raised a jury question concerning intent to annoy, abuse or harass:

Section 1692d(5) prohibits debt collectors from “causing a telephone to ring or

engaging any person in telephone conversation repeatedly or continuously with
intent to annoy, abuse, or harass any person at the called number.” 15 U.S.C.
§1692d(5). Intent may be inferred from the “nature, pattern, and frequency of debt
collection calls.” Stirling, 2012 WL 952310 at *4 (holding that harassment could
be inferred from a debt collector calling a debtor five to six times a day for almost
four months); see also Joseph v. J.J. Mac Intyre Companies, L.L.C., 238 F.Supp.2d
1158, 1168 (N.D.Cal.2002) ( “Whether there is actionable harassment or
annoyance turns not only on the volume of calls made, but also on the pattern of
calls.”). However, no bright-line rule exists for the amount and pattern of calls
necessary to raise a triable issue of harassment, and courts disagree on the issue.
Krapf v. Nationwide Credit Inc., No. 09–00711, 2010 WL 2025323 at *3–4
(C.D.Cal. May 21, 2010) (collecting cases and illustrating the disagreement across
districts); see Arteaga v. Asset Acceptance, LLC, 733 F.Supp.2d 1218, 1227
(2010) (holding that eighteen calls over a four-month period does not constitute
harassment); Young v. Asset Acceptance, LLC, No. 09–CV–2477, 2011 WL
1766058 (N.D.Tex. May 10, 2011) (holding triable issue of fact when collection
agency called debtor thirty-three times in seventy-three day window, including
calls before 8 a.m. and after 9 p.m.).

51
 In situations with similar call volume and pattern, several courts found triable
issues of intent to harass. For example, in Bassett v. I.C. System, Inc., a debt
collector called a debtor thirty-one times in a twelve-day period-approximately
two to three times per day. Bassett v. I.C. Sys., Inc., 715 F.Supp.2d 803, 810
(N.D.Ill.2010). The court held that this situation presented a genuine issue of
material fact as to whether the debt collector had violated § 1692d(5) and denied
the debt collector's summaryjudgment motion on the issue. Id. In another case, a
debt collector called plaintiff twenty-six to twenty-eight times in just over one
month. Akalwadi v. Risk Mgmt. Alt's, Inc., 336 F.Supp.2d 492, 506 (D.Md.2004).
The court found a triable issue of fact regarding plaintiff's § 1692d(5) claim
because the debt collector called on a daily basis and called the plaintiff three
times within five hours on one day. Id.

Genpact cites a number of out-of-district cases in support of its MSJ. (MSJ,

22–26.) While the number of calls here far exceeds the number of calls in most of
Genpact's support, one case is factually similar. In Carman v. CBE Group, Inc., the
court granted summary judgment against the debtor, holding that the debt
collector's actions-calling the plaintiff on two phone numbers 149 times in 55
days-evidenced intent to establish contact, not intent to harass. 782 F.Supp.2d
1223 (D.Kan.2011). While Genpact and the debt collector in Carman both called
the debtors two to three times per day for a similar period of time, the debt
collector in Carmen never called the debtor six times in one day. See Carman, 782
F.Supp.2d 1223. A reasonable trier of fact could find that this fact alone, apart
from the sheer volume of calls placed by Genpact, is sufficient to find that Genpact
had the “intent to annoy, abuse or harass” Neu. 15 U.S.C. § 1692d(5). Genpact
also contends that the number of calls it placed was “simply a function of the fact
that Genpact had two numbers potentially applicable to Plaintiff and that Plaintiff
did not respond to any of Genpact's attempts to reach him.” (MSJ, 15–16.) Thus, it
appears that Genpact is suggesting that this Court should somehow discount the
number of calls it made because it had two different contact numbers for Neu.
However, a reasonable trier of fact could find that a debt collector intended to
harass a debtor by continuously calling not one, but two different numbers
belonging to the debtor.

In Turner v. Professional Recovery Services, Inc., Civil No. 11-3356( JS) (D.N.J., July 9,
2013), the court held:
The Court concludes that a reasonable jury could determine that the volume and
pattern of PRS's phone calls demonstrate it intended to annoy, abuse, or harass
plaintiff. First, as in Majeski and Akalwadi, there was a high volume of calls made
by PRS to plaintiff. Although the parties dispute the exact number of phone calls,
there is no dispute that PRS called plaintiff's landline or cellular phone at least 133
times in five months. According to PRS's records, on some days plaintiff received
no phone calls from PRS, however, on other days PRS made multiple phone calls.
See, e.g., PRS Records at 4, Affidavit of Scott Stearn, Ex. 1 [Doc. No. 14-4].
Further, it appears that PRS left multiple messages for plaintiff in one day. See
PRS Records at 5. Second, PRS's records and the transcripts suggest that on two
occasions a PRS collector called plaintiff back shortly after she hung up on PRS.
The conversation on October 8, 2011, proceeded as follows:

FEMALE VOICE: Good morning.

CALLER: Hello. Bessie Turner please.

52
 FEMALE VOICE: Who is this?
CALLER: This is Harry Cavanero calling from Professional Recovery Services. Is
this Bessie Turner? Bessie, you hung right up. That wasn't polite.

Defendant's Statement ¶ 7. On November 17, 2011, the PRS records indicate that
PRS called plaintiff at 11:39 a.m., and contain a note stating "unempl living off".
PRS Records at 11. The transcript of the November 17, 2011, conversation reflects
that plaintiff told the PRS collector she was living off her elderly parents and the
conversation ended abruptly. Defendant's Statement ¶ 11. The next entry in the
records indicates PRS placed a call at 11:42 a.m., within minutes of the 11:39 a.m.
conversation. The jury may consider these multiple calls to plaintiff in one day
when it decides whether PRS intended to annoy, abuse, or harass plaintiff. Third,
PRS's records indicate PRS called plaintiff twice within a matter of minutes on
numerous occasions.[3] Fourth, on October 10, 2011, the conversation between a
PRS collector and plaintiff proceeded as follows:

CALLER: Hello, Bessie Turner please.

MS. TURNER: Who's calling?
CALLER: Harry Cavanero's calling. Is this Bessie Turner? I'm calling from
Professional Recovery Services.
MS. TURNER: I told the gentleman the other day that I'm not working.
CALLER: Well, we still have to call Ma'am until payment is made on the account.
MS. TURNER: Okay, well I'm not working.
CALLER: But that's not my fault Ma'am. You must have some type of an income
or how are you living?
MS. TURNER: I'm not barely —
CALLER: Hello?
MS. TURNER: I'm not. I'm really not. I'm just waiting for whatever utility there is
to be cut off in the next day or two.
CALLER: Well, you have a good day Ma'am. We will be calling again.

Defendant's Statement ¶ 8 (emphasis added). After this conversation, PRS

collectors continued to call plaintiff until December 30, 2011. See PRS Records.
The jury may infer from PRS's threat to continue to call plaintiff that it intended to
annoy, abuse, or harass her until she capitulated and paid the debt.

PRS cites numerous cases to support its argument that the pattern and volume of
its phone calls do not demonstrate an intent to annoy, abuse, or harass plaintiff.
See Defendant's Memo at 8-9. These cases, however, are all distinguishable
because the alleged violation of § 1692d was only the excessive volume of phone
calls. In this instance, the volume of calls combined with evidence regarding the
pattern and content of the phone calls creates a jury question. Based on the
evidence, a reasonable jury could conclude PRS intended to annoy, abuse, or
harass plaintiff. Consequently, summary judgment is denied as to Counts Two and
Three.

Compare Sanchez v. Client Services, 520 F. Supp. 2d 1149 (N.D. Cal. Oct. 29, 2007) (summary
judgment for plaintiff where the collector placed 54 calls over a timeframe of 6 months, with 12
calls in one month, 6 calls in one day, and 25 voice messages); Kuhn v. Account Control, 865 F.
Supp. 1443 (D. Nev. Oct. 7, 1994) (summary judgment for plaintiff where six calls were placed
within a 24-minute period); Tucker v. CBE Group, Inc., 710 F. Supp. 2d 1301 (M.D. Fla. May 5,
2010) (court granted defendant’s motion for summary judgment and held that 57 calls made to a

53
nondebtor (never more than seven times a day) was not a violation of the FDCPA. Plaintiff never
spoke to defendant, never requested that defendant cease calling and knew that the calls were not
directed to him. Also, defendant never called back on the same day after leaving a message.
Therefore, the court concluded that the intent was to reach the debtor and not to harass plaintiff);
Katz v. Capital One, 2010 WL 1039850, *3 (E.D. Va. Mar. 18, 2010) (summary judgment for
defendant where the collector never received a cease and desist letter and did not call more than
twice a day. The court held that to determine whether a violation occurred, the court must analyze
not only the amount of calls but also the “pattern of calls.” If the plaintiff fails to establish any
indicia of an unacceptable pattern of calls, then there is no violation for harassment. The court
found for defendant in this case because it never called plaintiff right after plaintiff hung up, there
were no back-to-back calls, the calls were not made at inconvenient times and defendant never
received plaintiff’s request to cease calling); Arteaga v. Asset Acceptance L.L.C., 2010 WL
3310259 (E.D. Cal. Aug. 23, 2010) ( summary judgment in favor of defendant, which had made
18 calls to plaintiff over the course of five months. The court held that there was no violation
because defendant never called plaintiff after she hung up, did not call plaintiff multiple times a
day, did not call plaintiff after she made a request to cease, and did not call plaintiff or her family
or friends at odd hours.); Meadows v. Franklin, 2010 WL 2605048 (N.D. Ala. June 25, 2010)
(summary judgment for defendant and against a nondebtor plaintiff where the collector placed
200 to 300 calls over 2.5 years. The court ruled in favor of defendant because “a handful of calls”
a week, when the vast majority of the calls were not answered, did not constitute a violation. The
nondebtor plaintiff admitted that she only answered a few times, and that she knew the calls were
not for her.); Saltzman v. I.C. Sys., Inc., 2009 WL 2190359, *7 (E.D. Mich. Sept. 30, 2009)
(summary judgment for defendant where only one in five calls were answered. The court held
that this ratio showed a difficulty in reaching plaintiff rather than an intent to harass.); Jiminez v.
Accounts Receivable, Inc., Case No. CV-09-9070 (C.D. Cal. Nov. 15, 2010) (summary judgment
for defendant where the collector placed 69 calls in just over three months); Basset v. I.C. Sys.,
Inc., 715 F. Supp. 2d 803 (N.D. Ill. June 1, 2010) (whether 31 calls in 12 days qualified as
harassment was a question for the jury as plaintiff stated that he felt abused); Krapf v. Nationwide
Credit Inc., 2010 WL 2025323, *4 (C.D. Cal. May 21, 2010) (defendant’s motion for summary
judgment was denied as the question of whether more than 180 calls in a single month qualified
as harassment was one for the jury. The court allowed the case to go to the jury because some of
the calls were separated by a matter of minutes); Akalwadi v. Risk Management Alternatives, 336
F. Supp. 2d 492 (D. Md. Sept. 22, 2004) (whether 28 calls over the course of two months
qualified as harassment was a question for the jury); Joseph v. J.J. Macintyre, 238 F. Supp. 2d
1158 (N.D. Cal. Dec. 12 2002) (whether 200 calls over the course of 1.5 years qualified as
harassment was a question for the jury. On three different days, defendant attempted to telephone
plaintiff after having spoken with her on the same day. Plaintiff had been contacted on the same
day after she requested that the calls cease. On two other occasions, defendant telephoned
plaintiff on the same day after she had hung up on it.).

IX. VIOLATIONS -- THREATS OF UNINTENDED, UNAUTHORIZED OR

ILLEGAL ACTION

The FDCPA prohibits "the threat to take any action that cannot legally be taken or
that is not intended to be taken." 15 U.S.C. §1692e(5). Examples of violations include:

1. Filing or threatening suit on debts barred by applicable federal or state

statutes of limitation, unless the debt collector has a reasonable basis for
contending that the debt is not time-barred. Kimber v. Federal Financial
Corp., 668 F.Supp. 1480 (M.D.Ala. 1987); McCollough v. Johnson,
Rodenburg & Lauinger, LLC, No. 09-35767, 2011 U.S. App. LEXIS 4072

54
 (9th Cir., March 4, 2011); Huertas v. Galaxy Asset Management, No.
10-2532, 2011 U.S. App. LEXIS 7397 (3rd Cir., April 11, 2011); Goins v.
JBC & Assocs., P.C., 352 F. Supp. 2d 262 (D.Conn. 2005); Ramirez v.
Palisades Collection LLC, 07 C 3840, 2008 U.S. Dist. LEXIS 48722 (N.D.
Ill. June 23, 2008), earlier opinion, 250 F.R.D. 366 (N.D. Ill. 2008); Parkis
v. Arrow Fin. Servs., 07 C 410, 2008 U.S. Dist. LEXIS 1212 (N.D. Ill. Jan.
8, 2008); Schutz v. Arrow Fin. Servs., LLC, 465 F. Supp. 2d 872 (N.D. Ill.
2006). "A threat to sue a consumer on a claim that the debt collector
knows is barred by the statute of limitations violates §1692e(2)(A) of the
FDCPA." Aronson v. Commercial Fin. Svcs., Inc., No. Civ. A. 96-2113,
1997 U.S. Dist. LEXIS 23534, 1997 WL 1038818, at *2 (W.D. Pa. Dec.
22, 1997). It should be noted that the February 2009 FTC report,
“Collecting Consumer Debts: The Challenges of Change: A Federal
Trade Commission Workshop Report (February 2009),” states (pp. 63-64)
that “It thus is a violation of the FDCPA to sue or threaten to sue
consumers to recover on time-barred debt.” This prohibition applies with
equal force in all states, regardless of whether expiration of the limitations
period completely extinguishes a debt or merely prevents judicial
enforcement of it. In states that adopt the latter view, a debt collector may
request voluntary repayment of the debt but may not threaten suit based
upon it. Freyermuth v. Credit Bureau Svcs., Inc., 248 F.3d 767, 771 (8th
Cir 2001); Ehsanuddin v. Wolpoff & Abramson, No. Civ. A. 06-708, 2007
U.S. Dist. LEXIS 11230, 2007 WL 543052, at *4 n.1 (W.D. Pa. Feb. 16,
2007); Wallace v. Capital One Bank, 168 F. Supp. 2d 526 (D. Md. 2001)
(holding that when expiration of a limitations period does not extinguish
debt, a debt collector may send a collection letter that does no more than
request voluntary repayment). At present, only Mississippi and Wisconsin
hold that the right is extinguished by passage of the statute of limitations.

2. Threatening criminal prosecution or liability for multiple damages or civil

penalties, when collecting bad checks. If the collector states or implies that
it regularly prosecutes criminally when it does not, its communications
violate §1692e(5). Alger v. Ganick, O'Brien & Sarin, 35 F.Supp. 2d 148
(D.Mass. 1999); Davis v. Commercial Check Control, Inc., 98 C 631, 1999
WL 89556, 1999 U.S. Dist. LEXIS 1682 (N.D.Ill. Feb. 16, 1999).

3. Section 1692e(5) is also violated if the collector misstates the consumer's

liability for multiple damages or civil penalties, such as by implying that
liability for multiple damages is absolute when the consumer has a right to
tender the amount of the check prior to trial and avoid liability for multiple
damages, or where a statutory notice is a precondition to liability and no
such notice has been given. Stadler v. Devito, 931 P.2d 573 (Colo. App.
1996) (where bad check statute required notice by certified mail before
debtor was liable for enhanced damages, collection agency that filed action
without giving proper notice violated state analog of FDCPA); but see
Davis v. Commercial Check Control, Inc., 98 C 631, 1999 WL 89556, 1999
U.S. Dist. LEXIS 1682 (N.D.Ill. Feb. 16, 1999).

4. The threat to file suit or take other collection actions within a short time
when the creditor has not authorized the action or the debt collector does
not take the action within the period stated. Bentley v. Great Lakes
Collection Bureau, 6 F.3d 60 (2d Cir. 1993); Graziano v. Harrison, supra,

55
 950 F.2d 107 (3d Cir. 1991); Pipiles v. Credit Bureau of Lockport, Inc.,
supra, 886 F.2d 22 (2d Cir. 1989) (48 hour notice); Oglesby v. Rotche, 93
C 4183, 1993 WL 460841, 1993 U.S.Dist. LEXIS 15687 (N.D.Ill. 1993).

5. Threats of suit by an attorney not licensed within the jurisdiction or who

does not in fact file suits in the jurisdiction. Rosa v. Gaynor, 784 F.Supp.
1, 5 (D.Conn. 1989).

6. Courts have divided with respect to whether any threat to take collection
action by a debt collector that is required to be, but is not, licensed in the
jurisdiction, violates the FDCPA. Courts finding a violation include
LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1190 (11th Cir. 2010)
(yes, if result of lack of license is that debt collector is threatening action
(e.g., suit) that cannot be lawfully taken); Smith v. LVNV Funding, LLC,
2:11-CV-379 et al., 2012 U.S. Dist. LEXIS 127185 (E.D.Tenn., Sept. 7,
2012) (same); Goins v. JBC & Assocs., 352 F. Supp. 2d 262, 271 (D. Conn.
2004); Cox v. Hilco Receivables, L.L.C., 3:09-CV-897-M, 2010 U.S. Dist.
LEXIS 124605 (N.D.Tex., Nov., 24, 2010); Hauk v. LVNV Funding, LLC,
749 F. Supp. 2d 358 (D.Md. 2010); Foster v. D.B.S. Collection Agency,
463 F. Supp. 2d 783 (S.D.Ohio. 2006); Sibley v. Firstcollect, Inc., 913
F.Supp. 469, 471 (M.D. La. 1995); Russey v. Rankin, 911 F.Supp. 1449,
1459 (D. N.M. 1995); United States v. National Financial Services, Inc.,
820 F.Supp. 228, 235-36 (D. Md. 1993), aff'd, 98 F.3d 131 (4th Cir. 1996);
In re Belile, 209 B.R. 658 (Bankr. E.D. Pa. 1997); Rosa v. Gaynor, 784
F.Supp. 1, 4-5 (D. Conn. 1989); and Gaetano v. Payco of Wisconsin, Inc.,
774 F. Supp. 1404, 1413-14 (D.Conn. 1990). The Ninth Circuit expressed
a contrary opinion in a case involving an “innocuous” letter, Wade v.
Regional Credit Ass'n, 87 F.3d 1098 (9th Cir. 1996); the court expressly
noted that there was no lawsuit or threat of suit. See also, McCorriston v.
L.W.T., Inc., 8:07-cv-160-T-27EAJ, 2008 U.S. Dist. LEXIS 60006
(M.D.Fla. August 7, 2008). Some courts hold that a request for payment
by a collector who lacks a required license is not a violation but that a
threat to file suit is. Goins v. JBC & Associates, P.C., 352 F. Supp. 2d 262
(D.Conn. 2005); Skinner v. Asset Acceptance, LLC, No. 10-2453 (D.N.J.
June 26, 2012) (“The state law violation itself is not a per se violation of
the FDCPA. See e.g., LeBlanc v. Unifund CCR Partners, 601 F.3d 1185,
1192 (11th Cir. 2010); Wade v. Regional Credit Ass'n, 87 F.3d 1098, 1100
(9th Cir. 1996). Plaintiff does not argue that she was misled by Defendant's
communication, that it was false, or that it was a product of unfair or
unconscionable practices. As Plaintiff's only basis for a violation of the
FDCPA is Defendant's attempt to collect the debt without having filed the
bond, which the Court has concluded did not violate the FDCPA, Plaintiff
has not come forward with facts or evidence in support of its contention
that the challenged letter violated any other provisions of the FDCPA.”).
Note that if a complaint or other document expressly represents that
authority exists when it does not, §1692e is violated.

In Grant-Fletcher v. The Brachfeld Law Group, PC., Civil No.

WMN-11-2072, 2012 U.S. Dist. LEXIS 89721 (D.Md. June 28, 2012), the
court stated:

Maryland commercial law requires that a person have a license

56
when doing business as a collection agency in the state. Md. Code
Ann., Bus. Reg. § 7-301(a). A license authorizes the person to do
business as a collection agency at only one place of business, and
requires a separate application and fee if it wishes to act as a
collection agency from another place of business. Id. at §§ 7-305,
7-302(c).

A violation of the Maryland Collection Agency Licensing Act

("MCALA") will not give rise to a private cause of action. Id. at §
7-401; see also Bradshaw v. Hilco Receivables, LLC, 765 F. Supp.
2d 719, 727-28 (D. Md. 2011). This Court, however, has held that a
violation of the MCALA licensing requirement may support a cause
of action under FDCPA Section 1692e(5) or MCDCA § 14-202(8),
which prohibits a debt collector from threatening to take any action
that cannot legally be taken to collect debts. Bradshaw, 765 F.
Supp. 2d at 728, 733. This is because, if a collection agency is not
licensed to do business in Maryland, it would be illegal for it to
threaten to take legal action against a debtor. See Nat'l Fin. Serv.,
98 F.3d at 235-36; see also Bradshaw, 765 F. Supp. 2d at 729.

Courts have split over whether a debt collector who has not been
properly licensed by the state has violated § 1692e by simply
attempting to collect a debt. Compare Wade v. Reg'l Credit Ass'n,
87 F.3d 1098, 1100 (9th Cir. 1996) (holding that defendant's
collections, although apparently in violation of state law, were
innocuous and not in violation of the FDCPA), Niemiec v. NCO
Fin. Sys., No. 1:05cv219, 2006 WL 1763643, at *9 (N.D. Ind. June
27, 2006), and Pescatrice v. Elite Recovery Servs., No.
06-61130-CIV-COHN, 2007 WL 1192441, at *4 (S.D. Fla. Apr. 23,
2007); with Sibley v. Firstcollect, Inc., 913 F. Supp. 469, 471 (M.D.
La. 1995) (holding that two letters that were designated as
"attempting to collect a debt" sent by defendant company not
licensed to collect debts in the state violated § 1692e), Kuhn v.
Account Control Tech., 865 F. Supp. 1443, 1452 (D. Nev. 1994)
(holding that unlicensed collection actions that involved telephone
calls demanding payment violated § 1692e); see also Gaetano, 774
F. Supp. at 1414.

This Court recently held in Bradshaw that "a violation of

Maryland's MCALA licensing requirement may support a cause of
action under the FDCPA." Bradshaw, 765 F. Supp. 2d at 729
(emphasis added). Notwithstanding, this Court declined to hold that
any violation of state law amounted to a per se violation of the
FDCPA. See id. (emphasis added). In Bradshaw, the defendants
filed lawsuit without a license, which the court held was a violation
of the FDCPA. See id.

In the present case, however, the faxed letter did not threaten legal
action, and would be viewed by the "least sophisticated debtor" as a
reminder and not as a threat. See Wade, 87 F.3d at 1100. The letter
"contain[s] no reference, either direct or implicit, to suit, lawsuit,
legal action, or litigation." Gaetano, 774 F. Supp. at 1408. The only

57
 language that could potentially be construed as threatening is that
which is expressly required by 15 U.S.C. § 1692e(11)[5], but such
language merely informs a consumer that the correspondence is
connected to an attempt to collect a debt and does not itself threaten
legal action or even indicate that any action will be taken from the
unlicensed location sending the correspondence. As such, the Court
holds that the faxed letter is not plausibly a threat to take action that
could not legally be taken, so the claims brought under 15 U.S.C. §
1692e(5) and Md. Code Ann., Com. Law § 14-202(8) related to
Defendant's unlicensed Ohio office will be dismissed.

7. Generally, “a debt collector violates the FDCPA when it actually files suit
to collect a debt for which it knows, or reasonably should know, the
defendant is not liable.” Royal Financial Group, LLC v. George,
ED92972, 2010 Mo.App. LEXIS 399, *11 (March 30, 2010) (wrong person
sued, no evidence of assignment). For example, the filing of a collection
action barred by res judicata violates the FDCPA. Montgomery v Donnett,
. 1:05-CV-00476, 2006 U.S. Dist. LEXIS 7377, 2006 WL 293727 (S.D.
Ohio Feb. 7, 2006).

8. Threatening to take or taking action which constitutes the unauthorized

practice of law, such as when a collection agency files suit in its own name
to collect a debt when not permitted to do so under state law. Poirier v.
Alco Collections, Inc., 107 F.3d 347 (5th Cir. 1997); Marchant v. U.S.
Collections, Inc., 12 F.Supp. 2d 1001 (D.Ariz. 1998).

9. Threats to file suit in a forum where suit cannot legally be filed under 15
U.S.C. §1692i. Wiener v. Bloomfield, 901 F. Supp. 771 (S.D.N.Y. 1995).

10. Threats to enforce creditor remedies which cannot be enforced at the time
stated or to the extent stated. For example, a debt collector may threaten to
obtain a wage garnishment or execution without disclosing that this can
only be done after notice, hearing and judgment, or may threaten to garnish
"all" of a consumer's wages when the law clearly imposes limitations on
the amount which may be garnished. Oglesby v. Rotche, 93 C 4183, 1993
WL 460841, 1993 U.S.Dist. LEXIS 15687 (N.D.Ill. 1993) (threat to
garnish all wages and attach all property); Woolfolk v. Van Ru Credit
Corp., supra, 783 F.Supp. 724 (D. Conn. 1990) (oppressive list of post-
judgment remedies); Seabrook v. Onondaga Bureau of Medical Economics,
Inc., 705 F.Supp. 81 (N.D.N.Y. 1989) (threat to garnish wages in excess of
amounts permitted under federal law); Cacace v. Lucas, 775 F.Supp. 502
(D.Conn. 1990) (letter stating that litigation could result in seizure of real
estate and bank account deceptive; mere filing of litigation could not have
any of stated effects); Young v. Dey, 93 CV 690 (D.Conn. 1994) (reference
to attachment without mention of exemptions); Holt v. Wexler, 98 C 7285,
1999 U.S. Dist. LEXIS 8785 (N.D. Ill. 1999) ("Additional legal
proceedings will be implemented to enforce collection; credit bureaus have
recorded the fact in your credit report that you are a judgment debtor and
skip tracers may contact your references, your former employers, your
relatives and your neighbors in an effort to gain information about your
assets."). But see Kleczy v. First Federal Credit Control, Inc., 21 Ohio
App.3d 56, 486 N.E.2d 204 (1984) ("avoid further action" was not

58
 sufficiently threatening to violate §1692(e)(5)).”

11. A debt collector which also functions as a credit reporting agency cannot
threaten to disseminate credit information in a manner prohibited by the
Fair Credit Reporting Act or the FDCPA (15 U.S.C. §1692c(b)) unless the
debtor pays the debt.

12. Threats to contact employers or take other action prohibited by the

FDCPA or other law, Swanson v. Southern Oregon Credit Service, Inc.,
869 F.2d 1222, 1226-27 (9th Cir. 1988), or which is not in fact taken.
Beasley v. Collectors Training Institute of Ill. Inc., 98 C 8113, 1999 WL
675196, 1999 U.S. Dist. LEXIS 13275 (N.D.Ill. August 19, 1999).

13. The statement that “Late payments, missed payments or other defaults may
be reflected on your credit report” is unlawful if late or missed payments or
other defaults are not in fact reported to credit bureaus after the initial
reporting of a defaulted account. Fainbrun v. Southwest Credit Systems,
L.P., 05cv4364, 2007 U.S.Dist. LEXIS 70956 (E.D.N.Y. Sept. 25, 2007);
see also, Harrison v. Palisades Collections, LLC, 06cv3239 (E.D.N.Y.
May 7, 2007).

Threats may be implicit as well as express. Statements that a debt will be subject
to "legal review" or "will be transferred to an attorney" are implicit threats of suit. Drennan v.
Van Ru Credit Corp., 950 F.Supp. 858 (N.D.Ill. 1996); United States v. National Financial
Services, Inc., 98 F.3d 131 (4th Cir. 1996). A statement by an attorney that "all necessary actions"
will be taken is a threat of suit. Strombach v. Knepper & Moga, 98 C 2457, 1998 U.S.Dist.
LEXIS 15533 (N.D.Ill., Sept. 23, 1998)."Because to most consumers, the relevant distinction
between a collection agency and an attorney is the ability to sue, . . . the debtor would understand
the disparate treatment to be the institution of suit." United States v. National Financial Services,
Inc., supra. A statement that action "could be" or "can be" taken is a "threat." Vaughn v. CSC
Credit Services, 93 C 4151, 1994 WL 449247, 1994 U.S. Dist. LEXIS 2172, *24 (N.D. Ill. March
1, 1994) (Magistrate Judge's opinion), adopted, 1995 WL 51402, 1995 U.S. Dist. LEXIS 1358
(N.D. Ill. Feb. 3, 1995). A statement that the debtor would be "susceptible to immediate criminal
prosecution" if a check was not made good in 10 days conveyed the impression that "prosecution
would follow non-payment". Boyce v. Attorney's Dispatch Service, C-3-94-347, 1999 U.S. Dist.
LEXIS 1124 (S.D. Ohio, Feb. 2, 1999).
A statement that suit would be "recommended" is misleading where the collector
knows suit is never filed because of the small size of the debt. Boyce v. Attorney's Dispatch
Service, C-3-94-347, 1999 U.S. Dist. LEXIS 1124 (S.D. Ohio, Feb. 2, 1999).

In this regard, the FTC states:

6. Threat of legal or other action. Section 807(5) refers not only to a false
threat of legal action, but also a false threat by a debt collector that he will report a
debt to a credit bureau, assess a collection fee, or undertake any other action if the
debt is not paid. A debt collector may also not misrepresent the imminence of such
action.

A debt collector's implication, as well as a direct statement, of planned

legal action may be an unlawful deception. For example, reference to an attorney
or to legal proceedings may mislead the debtor as to the likelihood or imminence

59
 of legal action.

A debt collector's statement that legal action has been recommended is a

representation that legal action may be taken, since such a recommendation
implies that the creditor will act on it at least some of the time.

Lack of intent may be inferred when the amount of the debt is so small as
to make the action totally unfeasible or when the debt collector is unable to take
the action because the creditor has not authorized him to do so.

FTC Official Staff Commentary on the Fair Debt Collection Practices Act, Statements of General
Policy or Interpretation Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed.
Reg. 50097, 50106 (Dec. 13, 1988).

If the chance that action can be permissibly undertaken against the debtor is zero,
qualifying a statement by “to the extent permitted” does not save it. Gionis v. Javitch, Block &
Rathbone, LLP, Nos. 06-3048 & 06-3171, 238 Fed. Appx. 24; 2007 U.S. App. LEXIS 14054 (6th
Cir., June 6, 2007), aff’g, Gionis v. Javitch, Block & Rathbone, 405 F. Supp. 2d 856, 867 (S.D.
Ohio, 2005): “And the phrase ‘to the extent permitted’ suggests (at least to the least sophisticated
consumer) that some extent is in fact permitted under Ohio law. ‘Why else,’ the consumer would
wonder, "would Javitch attach this language to the complaint if Ohio law does not permit attorney
fees here?’" Accord, Ruth v. Triumph P'ships, 577 F.3d 790 (7th Cir. 2009) ("to the extent
permitted by law"); Veach v. Sheeks, 316 F.3d 690 (7th Cir. 2003) ("as permitted by law").

In Lox v. CDA, Ltd., 689 F.3d 818 (7th Cir. 2012), the Seventh Circuit held that a
letter stating that attorney’s fees could be awarded violated the FDCPA where there was no
contractual or statutory basis for fees. “[I]t is improper under the FDCPA to imply that certain
outcomes might befall a delinquent debtor when, legally, those outcomes cannot come to pass.”
The court relied on Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055 (9th Cir. 2011), and Ruth
v. Triumph P’ships, 577 F.3d 790, 794 n.2 (7th Cir. 2009).

A collection letter that stated that the creditor had authorized whatever legal means
were necessary to collect the debt and that referred to post-judgment attachment and garnishment
implied that legal proceedings were imminent when they were not and violated 15 U.S.C.
§1692e(5). Bentley v. Great Lakes Collection Bureau, 6 F.3d 60 (2d Cir. 1993).
X. VIOLATIONS -- ACTUAL TAKING OF UNLAWFUL ACTION

While a few cases hold that a “threat” to take illegal action does not include the
actual taking of action, Fick v. Am. Acceptance Co., No. 3:11 CV 229, 2012 U.S. Dist. LEXIS
43761 (N.D. Ind. Mar. 28, 2012), most courts hold that it does. Allen v. LaSalle Bank, 629 F.3d
364 (3d Cir. 2011); Bradshaw v. Hilco Receivables, LLC, 765 F. Supp. 2d 719, 730 (D. Md.
2011) ("Section 1692e(5) of the FDCPA . . . include[s] the taking of 'action that cannot legally be
taken.'"); Balthazor v. Sec. Credit Servs., LLC, No. 11-60867-CIV-COHN/SELTZER, 2012 U.S.
Dist. LEXIS 6495 (S.D.Fla. Jan. 20, 2012); Heathman v. Portfolio Recovery Associates, LLC, No.
12-CV-201-IEG (RBB), 2013 WL 755674 (S.D.Cal., February 27, 2013); Sprinkle v. SB & C
Ltd., 472 F.Supp.2d 1235, 1247 (W.D. Wash.2006) ("[C]ourts have recognized the futility of a
statutory scheme that would provide more protection to debt collectors who violate the law than
to those who merely threaten or pretend to do so . . . The opposite conclusion would be akin to
attaching liability to one who merely threatens a tortuous act while absolving one who
unabashedly completes is [sic]. It is safe to say that such an interpretation veers sharply from the
legislative purpose behind the FDCPA."); Marchant v. U.S. Collections West, Inc., 12 F.Supp.2d

60
1001, 1006 (D.Ariz. 1998) ("defendants assert that they made no threat; they simply took action .
. . such argument elevates form over substance. To argue that a collection agency can avoid the
strictures of the FDCPA simply by acting where it has no legal authority . . . would defy the very
purpose of the section.").

In this regard, the actual taking of action is usually a threat to take further action, e.g.,
filing a lawsuit is a threat to obtain a judgment. Royal Financial Group, LLC v. Perkins,
ED98991, 2013 WL 4419343 (Mo. App. Aug. 20, 2013).
XI. VIOLATIONS -- UNAUTHORIZED CHARGES

The FDCPA prohibits "[t]he collection of any amount (including any interest, fee,
charge, or expense incidental to the principal obligation) unless such amount is expressly
authorized by the agreement creating the debt or permitted by law" and “[t]he false representation
of . . . (A) the character, amount, or legal status of any debt; or (B) any services rendered or
compensation which may be lawfully received by any debt collector for the collection of a debt”.
15 U.S.C. §§1692f(1), 1692e(2).

Section 1692f(1) has been regularly interpreted to cover the attempted collection
of such amounts. Williams v. Edelman, 408 F. Supp. 2d 1261, 1268-69 (S.D. Fla. 2005); Gigli v.
Palisades Collection, L.L.C., No. 3:CV-06-1428, 2008 U.S. Dist. LEXIS 62684, 2008 WL
3853295, at *5 (M.D. Pa. Aug. 14, 2008); Shepherd v. Liberty Acquisitions, LLC, No.
11-cv-00718-CMA-MEH, 2012 U.S. Dist. LEXIS 94199 (D.Colo. July 9, 2012).

The FTC Staff Commentary provides that “A debt collector may attempt to collect
a fee or charge in addition to the debt if either (a) the charge is expressly provided for in the
contract creating the debt and the charge is not prohibited by state law, or (b) the contract is silent
but the charge is otherwise expressly permitted by state law. Conversely, a debt collector may
not collect an additional amount if either (a) state law expressly prohibits collection of the
amount, or (b) the contract does not provide for collection of the amount and state law is silent.”
Federal Trade Commission Staff Commentary on the Fair Debt Collection Practices Act, 53
Fed.Reg. 50,097, at 50,108 (Dec. 13, 1988). This is the rule followed by the courts. Seeger v.
AFNI, Inc., 548 F.3d 1107 (7th Cir. 2008) (violation of FDCPA to demand collection fee when
contract authorizes fee only if owner of debt places it for collection with a third party; debt buyer
demanded fee even though it collected its own debts); West v. Costen, 558 F.Supp. 564 (W.D.Va.
1983); Pollice v. National Tax Funding, L.P., 225 F.3d 379, 408 (3rd Cir. 2000) (“[D]efendants
presumably have violated section 1692f(1) regardless of the presence of any agreement
authorizing the rates of interest and penalties, because state law specifically prohibits charging
interest in excess of ten percent on the assigned claims”); Johnson v. Riddle, 305 F.3d 1107,
1117-18 (10th Cir. 2002); In re Scrimpsher, 17 B.R. 999 (Bankr. N.D.N.Y. 1982) (unauthorized
"service charge" on NSF checks). "Under this provision, it is unconscionable for a debt collector
to collect any amount in excess of the principal amount of a loan, including collection charges,
unless these charges are authorized expressly by the terms of the agreement creating or
evidencing the debt or unless the charges are authorized explicitly by applicable state law."
Patzka v. Viterbo College, 917 F.Supp. 654, 658 (W.D. Wisc. 1996). Substantive state law is to
be determined in the usual way under Erie. Johnson v. Riddle, 305 F.3d 1107, 1117 (10th Cir.
2002).

Typical violations include (1) collection of usurious interest, Pollice, supra, Nance
v. Ulferts, 282 F.Supp.2d 912 (N.D.Ind. 2003); Patzka, supra; Martinez v. Albuquerque
Collection Services, Inc., 867 F.Supp. 1495 (D.N.M. 1994); (2) the imposition of service charges
for bad checks where not permitted by agreement and applicable state law, and the imposition of

61
attorney's fees where no contract or statute authorizes them. Strange v. Wexler, 796 F.Supp. 1117
(N.D.Ill. 1992); Lox v. CDA, Ltd., 689 F.3d 818 (7th Cir. 2012).

Bad debt buyers frequently commit violations of this nature, because they acquire
debts with little or no documentation and charge interest rates that can only be charged by
supervised lenders (e.g., banks, consumer small loan licensees) without possessing such licenses.

Percentage attorney's fees or collection fees are often not permitted under state
law, including the law of Illinois (except for credit union debts and federally-guaranteed student
loans) and Indiana (except for federally-guaranteed student loans). Kojetin v. C.U. Recovery,
Inc., 97-2273 (JRT/RLE), 1999 U.S. Dist. LEXIS 1745 (D. Minn. Feb. 17, 1999), adopted by,
1999 U.S. Dist. LEXIS 10930 (D. Minn. Mar. 29, 1999), affirmed, 212 F.3d 1318 (8th Cir.
2000). But see Talbott v. GC Services LP., 53 F. Supp. 2d 846 (W.D.Va 1999). Rather, the debtor
is liable for attorney's fees on collection agency fees computed on a "lodestar" basis.

One court held that a statement that the debtor might "also be responsible for
interest and any other fees to which we are legally entitled, along with the original balance," did
not violate the FDCPA because of the qualification "to which we are legally entitled." Hodrosky
v. Polo Club Apartments, No. 70608, 1997 Ohio App. LEXIS 1330 (8th Dist., April 3, 1997).
This decision would appear to be correct only insofar as it was legally possible to claim interest
and costs.

Filing suit on an allegedly forged instrument is not a violation, at least absence

knowledge of the forgery. Transamerica Finan. Services, Inc. v. Sykes, 171 F.3d 553 (7th Cir.
1999).

One frequent area of litigation is charges on bad checks. In this area, courts have
held:

1. "Service charges" could not be added to the amounts of dishonored checks

on the basis of posted signs unless there was evidence that the check writer
actually saw the sign, or that the charges otherwise actually formed part of
the contract entered into with the consumer. Newman v. Checkrite of
California, Inc., 912 F. Supp. 1354 (E.D.Cal. 1995).

2. For such charges to be valid as incidental damages under the Uniform

Commercial Code, debt collectors must establish that "the amount of their
service charges is a commercially reasonable incidental damage to the
merchant." A debt collector cannot do this "by referring to its own charges
to the merchant as evidence of reasonable or actual cost." Newman v.
Checkrite of California, Inc., 912 F. Supp. 1354 (E.D.Cal. 1995); Ballard
v. Equifax Services, Inc., 27 F.Supp. 2d 1201 (E.D.Cal. 1998), class
certification granted, claim dismissed, 186 F.R.D. 589 (E.D. Cal. 1999).
The Second Circuit has approved charges in the $20 range on this theory.
Tuttle v. Equifax Check Services, Inc., 190 F.3d 9 (2d Cir. 1999).

3. A debt collector violated the FDCPA by describing demands for additional

fees as "legal notice fees" or "legal consideration for covenant not to sue,"
as such names imply that they are an authorized legal expense or an
obligatory payment to avoid suit. Newman v. Checkrite of California, Inc.,
912 F. Supp. 1354 (E.D.Cal. 1995); Ditty v. Check Rite, Ltd., 973 F.Supp.
1320 (D.Utah 1997), class certification granted, in part, class certification

62
 denied, in part, 182 F.R.D. 639 (D. Utah 1998), mot. granted, Civil No.
2:95-CV-430C, 1998 WL 663357, 1998 U.S. Dist. LEXIS 12,940 (D.
Utah Aug. 13, 1998).

4. Where state law requires a formal demand by certified mail before

statutory damages are available, it is improper to represent that the check
writer is potentially liable for those damages when the demand requirement
is neither complied with nor disclosed. Newman v. Checkrite of California,
Inc., 912 F. Supp. 1354 (E.D.Cal. 1995); But see Davis v. Commercial
Check Control, Inc., 98 C 631, 1999 WL 89556, 1999 U.S. Dist. LEXIS
1682 (N.D.Ill. Feb. 16, 1999).

Some states, including Illinois, authorize by statute modest charges of this nature
under specified circumstances, generally in the $20-30 range.
XII. VIOLATIONS -- ADDING ATTORNEY’S FEES

Requesting attorney’s fees is not per se a violation where a contract authorizes

“reasonable” attorney’s fees.

The cases are divided on whether there is a violation if the request is patently
excessive or based on a method (such as a percentage of the debt) not permitted under state law.

In Kojetin v. C U Recovery, Inc., Civil No. 97-2273 (JRT/RLE), 1999 U.S. Dist.
LEXIS 10930 (D. Minn. Mar. 29, 1999), aff'd per curiam, 212 F.3d 1318 (8th Cir. 2000), the
court interpreted the phrase "reasonable costs incident to collection" to include only "actual
costs," and then determined that "actual costs" could not include a percentage-based fee.

Similarly, in Som v. Daniels Law Offices, P.C., 573 F. Supp. 2d 349 (D.Mass.
2008), the court held that it “cannot find as a matter of law that the language ‘all costs incurred’
necessarily authorizes a percentage-based attorney's fee. Depending on the facts, a
percentage-based fee might or might not be part of the actual ‘costs incurred’ by the creditor, and
the actual underlying facts will have to await discovery. Indeed, even under the arguably broader
contract language of ‘reasonable attorney's fees,’ courts have found that liquidated or
percentage-based attorney's fees can violate the FDCPA.”

In Richard v. Oak Tree Group, Inc., 614 F. Supp. 2d 814 (W.D.Mich. 2008), the
court held that a collection notice violated §1692f(1) where plaintiffs agreed "to pay ACI for
ACI's collection costs and expenses incurred" due to their default. “This agreement limited
plaintiffs' liability to ACI's collection costs ‘incurred,’ i.e., their ‘actual’ collection costs. The fact
that defendant added its maximum possible commission to the account balance does not establish
that ACI incurred this amount as a collection cost. On the contrary, ACI would not incur any
collection costs until defendant successfully collected some of the debt from plaintiffs. Requiring
plaintiffs to pay collection costs consisting of 28% of the outstanding principal balance amounts
to charging plaintiffs liquidated damages, something to which she did not agree.” “In summary,
plaintiffs agreement to pay ACI's ‘collection costs and expenses incurred,’ is not an agreement to
pay a collection agency's maximum potential commission based upon a percentage of plaintiffs'
unpaid account balance with ACI. Accordingly, plaintiffs are entitled to summary judgment with
respect to their claim brought pursuant to § 1692f.”

Cases declining to entertain the claim include Spears v. Brennan, 745 N.E.2d 862
(Ind. Ct. App. 2001). Spears may have turned on the fact that the FDCPA claimant could have

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challenged the amount in state court, which awarded the challenged fee.

Cases find a violation where the amount is stated as absolutely due instead of the
collector’s quantification of a contractual claim. Stolicker v. Muller, Muller, Richmond, Harms,
Myers & Sgroi, P.C., 1:04-CV-733, 2005 U.S. Dist. LEXIS 32404 (W.D.Mich., September 9,
2005), later opinion, 2006 U.S. Dist. LEXIS 36000 (W.D. Mich., June 2, 2006).

In Winn v. Unifund CCR Partners, 06-cv-447, 2007 U.S. Dist. LEXIS 95705, 2007
WL 974099, at *8 (D. Ariz. Feb. 13, 2007), the court noted the defendant "quotes a specific level
of attorney's fees in his prayer for damages, but he does not allege that this specific amount is
required by the terms of the credit card agreement. Instead, he acknowledges the creditor is
entitled only to 'reasonable' attorney's fees and invites the court to find that this specific amount is
reasonable." The court found Stolicker distinguishable because the fee request was not
represented as part of the debt and did "not inaccurately characterize the content of the credit card
agreement." Id.
XIII. VIOLATIONS -- OBFUSCATING ADDITION OF CHARGES

In Fields v. Wilber Law Firm, P.C., 383 F.3d 562 (7th Cir. 2004), a $250 attorney
fee was added to a $122 vet bill. Defendant’s dunning letter described the combined total of $388
as an “account balance,” not disclosing that most of it was attorney’s fees and interest. The court
found the letter misleading: “Even if attorneys' fees are authorized by contract, as in this case, and
even if the fees are reasonable, debt collectors must still clearly and fairly communicate
information about the amount of the debt to debtors. This includes how the total amount due was
determined if the demand for payment includes add-on expenses like attorneys' fees or collection
costs.” 383 F.3d at 566.
XIV. VIOLATIONS -- INABILITY TO PROVE WHAT IS DUE

Courts have divided on whether filing unprovable collection cases is actionable.

In In re Maxwell, 281 B.R. 101 (Bankr. D. Mass. 2002), Fairbanks Capital

Corporation obtained a mortgage loan that was allegedly in default. It did not have the note, an
account history, or other information from which the amount due could be accurately computed.
It demanded more money than was due. The court held that it violated 1692f and could not
qualify for a good faith defense.

In Harvey v. Great Seneca Fin. Corp., 453 F.3d 324 (6th Cir. 2006), the court held
that a debt collector’s failure to have on hand the proof necessary to establish a debt when the
case was filed was not an FDCPA violation. However, the court expressly refrained from passing
on the question of whether a pattern of such conduct violated the FDCPA, such claim having been
waived. Furthermore, although “mere filing of a lawsuit without the immediate means of proof is
not a violation of the FDCPA,” it is a violation to file a debt collection lawsuit without a good
faith belief that one could eventually prove the facts alleged in the complaint, especially if the
lawsuit is filed with the intent “to either obtain a default judgment or coerce [the debtor] into a
settlement. Accord, Kuria v. Palisades Acquisition XVI, LLC, No. 1:09-cv-03321-JOF-RGV,
2010 WL 4780769 at *6 (N.D. Ga. 2010)(holding that FDCPA complaint was sufficient to make
out a plausible claim under Twombly and Iqbal). Kuria lists several common debt buyer practices
that provide the "more": (1) pattern and practice of abusive, scattershot litigation to collect debts.
(at 1302.) (2) intent to either obtain a default judgment or enter into voluntary settlement. (at
1303.) (3) bad faith, reckless disregard towards debtors, and abuse of process (id.) (4) no
intent to investigate or verify a debt's validity. (id.) (5) general practice of filing coercive

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lawsuits to collect debts not actually owed. (id.)

In Royal Financial Group, LLC v. Perkins, ED98991, 2013 WL 4419343 (Mo.

App. Aug. 20, 2013), the court held that a practice of filing lawsuits with the intent of obtaining a
default judgment or settlement, but not of ever proving a case, is a violation of the FDCPA. “.
Recalling that the purpose of the FDCPA is to deter abusive debt collection practices, we see no
meaningful distinction, from the perspective of an unsophisticated consumer, between an empty
threat to file a lawsuit and empty threat to actually prosecute one once filed. Both tactics violate
the spirit and letter of section 1692(e)(5).” (*8)
XV. VIOLATIONS -- TIME BARRED DEBTS

1. CASELAW PRIOR TO 2012

Filing or threatening suit on debts barred by applicable federal or state statutes of

limitation is a violation, unless the debt collector has a reasonable basis for contending that the
debt is not time-barred. Kimber v. Federal Financial Corp., 668 F.Supp. 1480 (M.D.Ala. 1987);
McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939 (9th Cir. 2011); Freyermuth
v. Credit Bureau Serv. Inc., 248 F.3d 767, 771 (8th Cir 2001); Jackson v. Midland Funding, LLC,
754 F. Supp. 2d 711 (D.N.J. 2010); Griffith v Capital One Bank, 00-603-GPM, 2001 U.S. Dist.
LEXIS 21953, *4-5 (S.D. Ill. July 23, 2001); Stepney v Outsourcing Solutions, Inc., 97 C 5288,
1997 U.S. Dist. LEXIS 18264, 1997 WL 722972, *12-13 (N.D. Ill. Nov. 13, 1997); Baptist v.
Global Holding & Invest. Co., 04-CV-2365, 2007 U.S.Dist. LEXIS 49476 (E.D.N.Y. July 9,
2007); Reese v. Arrow Financial Services, 202 F.R.D. 83, 92 (D.Conn. 2001); Beattie v. D. M.
Collections, 754 F.Supp. 383, 393 (D.Del. 1991); Thompson v. D.A.N. Joint Venture III, L.P.,
1:05cv938, 2007 U.S.Dist. LEXIS 10849 (M.D.Ala. Feb. 13, 2007); Deere v. Javitch, 413
F.Supp.2d 886, 891 (S.D.Ohio. 2006); Velderman v. Midland Credit Mgmt., 1:04cv269, 2005
U.S.Dist. LEXIS 42242 (W.D.Mich. Sept. 29, 2005); Walker v. Gallegos, 167 F.Supp.2d 1105,
1107 (D.Ariz. 2001); Goins v. JBC & Assocs., P.C., 352 F. Supp. 2d 262 (D.Conn. 2005);
Ramirez v. Palisades Collection LLC, No. 07 C 3840, 2008 U.S. Dist. LEXIS 48722 (N.D. Ill.
June 23, 2008), earlier opinion, 250 F.R.D. 366 (N.D. Ill. 2008); Parkis v. Arrow Fin. Servs., No.
07 C 410, 2008 U.S. Dist. LEXIS 1212 (N.D. Ill. Jan. 8, 2008); Schutz v. Arrow Fin. Servs., LLC,
465 F. Supp. 2d 872 (N.D. Ill. 2006); Aronson v. Commercial Fin. Svcs., Inc., No. Civ. A.
96-2113, 1997 U.S. Dist. LEXIS 23534, 1997 WL 1038818, at *2 (W.D. Pa. Dec. 22, 1997).
This has been found to violate both §1692e and §1692f.

The February 2009 FTC report, “Collecting Consumer Debts: The Challenges of
Change: A Federal Trade Commission Workshop Report (February 2009),” states (pp. 63-64)
that “It thus is a violation of the FDCPA to sue or threaten to sue consumers to recover on time-
barred debt.”

This prohibition applies with equal force in all states, regardless of whether
expiration of the limitations period completely extinguishes a debt or merely
prevents judicial enforcement of it. In states that adopt the latter view, a debt
collector may request voluntary repayment of the debt but may not threaten suit
based upon it. Freyermuth v. Credit Bureau Svcs., Inc., 248 F.3d 767, 771 (8th Cir
2001).

Generally, “a debt collector violates the FDCPA when it actually files suit to collect a debt for
which it knows, or reasonably should know, the defendant is not liable.” Royal Financial Group,
LLC v. George, ED92972, 2010 Mo.App. LEXIS 399, *11 (March 30, 2010) (wrong person sued,
no evidence of assignment). For example, the filing of a collection action barred by res judicata

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violates the FDCPA. Montgomery v Donnett, . 1:05-CV-00476, 2006 U.S. Dist. LEXIS 7377,
2006 WL 293727 (S.D. Ohio Feb. 7, 2006); Donley v. Nordic Properties, Inc., 2003 WL
22282523 (N.D. Ill., Sept. 30, 2003).
2. 2012 CONSENT DECREES

In United States of America (For the Federal Trade Commission) v. Asset

Acceptance, LLC, Case No. 8:12-cv-182-T-27EAJ (M.D.Fla.), the FTC sued a major debt buyer,
alleging that Asset Acceptance regularly collects debts that are past the statute of limitations.
(Complaint, ¶30) The FTC alleged (¶34) that “Many consumers do not know if the accounts that
Asset is attempting to collect are beyond the statute of limitations. Consumers also do not realize
that making a partial payment on a debt, or making a written promise to pay will, in many
instances, revive the debt. When Asset contacts consumers to collect on a debt, many consumers
believe they could experience serious negative consequences, including being sued, if they fail to
pay the debt. Similarly, many consumers believe that making a partial payment on a debt in
response to Asset's collection efforts is a positive action that can avert the negative consequences
of nonpayment. If consumers knew, in connection with a past-statute debt, that Asset had no legal
means to enforce collection of the debt, or understood that making a partial payment or a written
to promise to pay would revive it, some consumers would likely choose not to make a payment or
a written promise to pay.”

The FTC alleged that by dunning consumers on time-barred debts without

disclosure of the fact, Asset Acceptance violated both §5(a) of the Federal Trade Commission
Act, 15 U.S.C. §45(a) (“FTC Act”) (¶¶56-58), and the FDCPA (¶¶81-83). Both 15 U.S.C.
§45(a) and 15 U.S.C. §1692e prohibit deceptive acts and practices. Indeed, §1692e represents a
codification and expansion of precedent relating to FTC actions with respect to debt collection
practices under §45(a). Jeter v. Credit Bureau, 760 F.2d 1168 (11th Cir. 1985).

The same day as the complaint was filed, Asset Acceptance consented to a
judgment in which it was required to disclose (¶IV.A-D), “for any debt that the Defendant knows
or should know may be beyond the applicable statute of limitations,” that “The law limits how
long you can be sued on a debt. Because of the age of your debt, we will not sue you for it.” The
judgment also required Asset to pay $2.5 million. The Commissioners of the FTC approved the
Consent Decree.

The FTC also issued a news release setting forth its position concerning collection
of time-barred debts. The release stated:
“Most consumers do not know their legal rights with respect to collection of old
debts past the statute of limitations,” said David Vladeck, Director of the FTC’s
Bureau of Consumer Protection. “When a collector tells a consumer that she owes
money and demands payment, it may create the misleading impression that the
collector can sue the consumer in court to collect that debt. This FTC settlement
signals that, even with old debt, the prohibitions against deceptive and unfair
collection methods apply.”

Finally, the FTC issued a notice to industry in which it described Asset’s violation as having
“failed to disclose that debts were too old to be legally enforceable or that a partial payment
would restart the clock”.

The FTC’s action in the Asset Acceptance case followed five years of investigation
and study of debt collection abuses generally and the collection of time-barred debts in particular.

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In late 2007, the FTC conducted a series of public workshops to evaluate the need for reform in
the debt collection system. Its subsequent report, Collecting Consumer Debts: The Challenges of
Change (2009),1 identified the advent and growth of the debt buying industry as the most
significant change in debt collection practices since the enactment of the FDCPA more than 30
years ago, and discussed some of the consumer challenges raised by this industry change. The
report noted (pp. 3-4) that large amounts of debts are sold to debt buyers, such as the defendants
herein, who generally pay 5% or less of the amount allegedly owed.

The most significant change in the debt collection business in recent years has
been the advent and growth of debt buying. Some companies simply buy debt and
seek to recover on it. In addition to these companies, debt buyers also include
collection law firms, contingency collection agencies, and investors who purchase
and resell portfolios of delinquent debt. Debt buyers purchase charged-off debt
from credit card issuers, retail merchants, telecommunications providers, utilities,
and other credit providers. Purchased debt typically is classified by its age and
the number of debt collectors who have attempted to collect it before it was sold. .
. . Debt buying increased substantially over the decade between 1997 and 2007,
and industry analysts estimate that debt buying will grow at an 11% rate over the
next five years and reach annual revenues of $6.2 billion by 2011.” (Id., 13-14)

Moreover, debt buyers receive only minimal information about the debts they claim to purchase:
“A leading association of debt buyers, DBA International (‘DBA’), acknowledged that it is
common for a debt buyer to receive only a computerized summary of the creditor’s business
records when it purchases a portfolio . . . .” (Id., 22).

This practice of acquiring debts without any evidence of them directly impinges on
the interest served by statutes of limitation. “By requiring that owners of debt file suit relatively
close in time to the delinquency, statutes of limitations help ensure that courts have necessary
evidence available to resolve disputes, and thus assist consumers in defending themselves.” (Id.,
62-63) The FTC noted that “. . . .there is a consensus that suing or threatening to sue to collect
time-barred debt is unlawful and unethical for debt collectors. . . .” (p. 64), but noted that further
measures may be necessary.

The FTC concluded that it needed more information before adopting a position.
To obtain more information, during the latter part of 2009 the FTC convened public roundtables
in Chicago, San Francisco, and Washington, D.C. These events brought together representatives
of the debt collection industry, consumer advocates, private attorneys, academics, government
officials, arbitration providers, judges, and others specifically to discuss issues related to debt
collection litigation. To supplement the information gleaned from the discussions at these
roundtables, the Commission also solicited and received public comments. The Commission’s
2010 Debt Collection and Arbitration Roundtables Report, Repairing a Broken System:
Protecting Consumers in Debt Collection Litigation and Arbitration (2010),2 examined the
deficiencies in debt collection lawsuits at the filing and default stages, particularly in actions
brought by debt buyers.

The 2010 Report again noted “that the FDCPA bars actual or threatened suit to
collect on time-barred debts.” (Report, p. 23) However, the FTC went further and concluded (pp.

1
Available at www.ftc.gov/bcp/workshops/debtcollection/dcwr.pdf.
2
Available at http://www.ftc.gov/os/2010/07/debtcollectionreport.pdf.

67
26-28) that other attempts to collect time-barred debt were misleading:

The Commission takes no position on whether the FDCPA should be amended to

preclude collectors from collecting debt that they know or should know is
time-barred. Nevertheless, because most consumers do not know or understand
their legal rights with respect to the collection of time-barred debt, the
Commission believes that in many circumstances such a collection attempt may
create a misleading impression that the collector can sue the consumer in court to
collect the debt, in violation of Section 5 of the FTC Act and Section 807 of the
FDCPA. To avoid creating this misleading impression, collectors would need to
disclose clearly and prominently to consumers before seeking payment on such
time-barred debt that, because of the passage of time, they can no longer sue in
court to collect the debt or otherwise compel payment.

The second issue related to collecting on time-barred debt roundtable participants

addressed was the “reviving” of such debt. In many states, making a payment on
a debt after it has gone into default triggers the start of a new statute of limitations
period for the entire debt, even if the original statute of limitations period has
already expired. . . . Debt collectors generally do not disclose to consumers that
making any payment on a time-barred debt revives the collector’s ability to sue to
collect on the entire debt. . . .

In states where laws continue to provide that a partial payment on a time-barred

debt revives it, the Commission believes that in many circumstances a collector’s
attempt to collect a debt that it knows or should know is time-barred may create a
misleading impression as to the consequences of making such a payment, in
violation of Section 5 of the FTC Act and Section 807 of the FDCPA. To avoid
creating a misleading impression, collectors would need to disclose clearly and
prominently to consumers prior to requesting or accepting such payments that (1)
the collector cannot sue to collect the debt and (2) providing a partial payment
would revive the collector’s ability to sue to collect the balance.

Among the reasons cited by the FTC for adopting this position were that debt buyers in particular
frequently threatened or filed suits to collect time-barred debt notwithstanding the existing
prohibition on doing so, apparently with the expectation that the consumers would default and
allow judgments to be entered against them. (2010 Report, pp. 29-30).
On October 1, 2012, the Consumer Financial Protection Bureau, which has taken
over much of the FTC’s enforcement responsibility and has been granted rule-making authority
with respect to debt collection, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, and the Office of the Comptroller of the Currency entered into consent orders with three
American Express-related entities requiring disclosure that debts they attempt to collect were
time-barred. 2012-CFPB-0002; 2012-CFPB-0003; 2012-CFPB-0004. The orders require that
“the Bank shall continue to provide disclosures concerning the expiration of the Bank’s litigation
rights when collecting debt that is barred by the applicable state statutes of limitations . . . .”
(2012-CFPB-0002, p. 6 of 35, 2012-CFPB-0003, p. 5 of 28). Thus, five agencies have entered
into four consent decrees explicitly based on the duty-to-disclose theory advanced by plaintiff
here. The orders further require disclosure of “all material conditions, benefits and restrictions
concerning any offer of settlement. . . .” (2012-CFPB-0002, p. 7 of 35, 2012-CFPB-0003, p. 6 of
28). Thus, they recognize that “settlement offers” that fail to disclose material information may
be misleading.

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 Most recently, the consent decree obtained by the Attorney General of Minnesota
in State v. Midland Funding, LLC, 27-CV-11-11510 (Hennepin Co. Dist. Ct.), requires disclosure
in collection letters (par. 16(h)) of the time-barred nature of debts.

Administrative agencies make law through adjudication as well as by rulemaking.

SEC v. Chenery Corp., 332 U.S. 194, 203 (1947). The decision of the FTC to file a complaint
represents its construction of the relevant statutes, in this case both the FTC Act and the FDCPA,
even if the proceeding is resolved by a consent decree. FTC v. Mandel Bros., 359 U.S. 385, 391
(1959); Ramson v. Layne, 668 F.Supp. 1162, 1168-69 (N.D.Ill. 1987); In re TJX Companies
Retail Security Breach Litigation, 564 F.3d 489, 496-97 (1st Cir. 2009); Schubach v. Household
Finance Corp., 375 Mass. 133, 135, 376 N.E.2d 140 (1978), PMP Assocs., Inc. v. Globe
Newspaper Co., 366 Mass. 593, 596, 321 N.E.2d 915 (1975), Commonwealth v. Fremont Inv. &
Loan, 452 Mass. 733, 747-48, 897 N.E.2d 548 (2008); State v. O'Neill Investigations, Inc., 609
P.2d 520, 529 (Alaska 1980). The FTC’s interpretation of what is “deceptive” in the area of debt
collection is entitled to deference by the courts. Chevron U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984). “Deceptive” is a very general term that the FTC
was to define through adjudication. FTC v. Colgate-Palmolive Co., 380 U.S. 374, 384-85 (1965).
3. ACCEPTANCE BY COURTS

One court has declined to defer to the FTC position. McMahon v. LVNV Funding,
LLC, 12 C 1410, 2012 U.S. Dist. LEXIS 92655 (N.D.Ill., July 5, 2012). However, the court
thought that any reference to the date of acquisition or other dates in connection with the debt,
without revealing its time-barred nature, were misleading. In a subsequent opinion, the court held
that an offer of settlement on a time-barred debt was at least potentially misleading. McMahon v.
LVNV Funding, LLC, 12 C 1410 (N.D.Ill., August 13, 2012).
XVI. VIOLATIONS -- COLLECTING DEBTS OF THE DECEASED

Just prior to transferring authority to the new Consumer Financial Protection

Bureau, the Federal Trade Commission issued a “Statement of Policy Regarding Communications
in Connection with the Collection of Decedents’ Debts,” 76 FR 44915 (Wednesday, July 27,
2011), which:

1. States that enforcement action will not be brought based on communication

regarding debts of decedent with widow/ widower or “an individual who
has the authority to pay the debts out of the assets of the decedent’s estate,”
even if not formally appointed by a court. Includes “persons who sign
declarations or affidavits to effectuate the transfer of estate assets” pursuant
to small estates procedures and “persons who dispose of the decedent’s
assets extrajudicially.”

2. States that attempts to identify the person authorized to pay the decedent’s
debts will be treated as location communications (15 U.S.C. §1692b) if
they state that the collection is trying to identify and locate the person who
has the authority to pay any outstanding bills of the decedent out of the
decedent’s estate, but cannot make any reference to a specific debt or the
fact that it is delinquent.

3. Does not permit correspondence to be sent to generic “estate of -----“ if it

specifically identifies a delinquent debt.

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 4. Authority to pay the decedent’s debts is not established by the fact that
someone is opening mail addressed to the decedent or paid for his or her
funeral or is “handling the decedent’s final affairs.”
XVII. VIOLATIONS -- COLLECTING DISCHARGED DEBTS

The Seventh Circuit has held that the attempted collection of debts discharged in
bankruptcy is an FDCPA violation:

Dunning people for their discharged debts would undermine the "fresh start"
rationale of bankruptcy (bankruptcy as a system of debtors' rights as well as
creditors' remedies), and is prohibited by the Fair Debt Collection Practices Act,
which so far as relates to this case prohibits a debt collector (a defined term) from
making a "false representation of the character, amount, or legal status of any
debt." 15 U.S.C. § 1692e(2)(A). Although not aimed specifically at efforts to
collect debts that have been discharged in bankruptcy, this provision fits that
practice to a T. Turner v. J.V.D.B. & Assocs., Inc., 330 F.3d 991, 994-95 (7th Cir.
2003); cf. Randolph v. IMBS, Inc., 368 F.3d 726, 728 (7th Cir. 2004) ("a demand
for immediate payment while a debtor is in bankruptcy (or after the debt's
discharge) is 'false' in the sense that it asserts that money is due, although, because
of the automatic stay (11 U.S.C. § 362) or the discharge injunction (11 U.S.C. §
524), it is not").

Ross v. RJM Acquisitions Funding LLC, 480 F.3d 493, 495 (7th Cir. 2007).
XVIII. VIOLATIONS -- FALSE REPRESENTATION THAT COMMUNICATION IS
FROM AN ATTORNEY

Another popular recent debt collection technique is to have large numbers of

collection letters, with implicit or explicit threats of suit, sent under the name of an attorney. The
courts have recognized that "A debt collection letter on an attorney's letterhead conveys authority
and credibility." Crossley v. Lieberman, 868 F.2d 566, 570 (3d Cir. 1989). The clear implication
of any attorney letter is a threat of suit.

Unless the attorney has in fact reviewed the debtor's file and made a professional
judgment that whatever action is threatened is appropriate, and the threatened action has been
authorized by the creditor, the use of such letters is a violation of §1692e(3), which prohibits
"[t]he false representation or implication that any individual is an attorney or that any
communication is from an attorney." Clomon v. Jackson, 988 F.2d 1314, 1321 (2d Cir. 1993);
Avila v. Rubin, 84 F.3d 222 (7th Cir. 1996); Nielsen v. Dickerson, 307 F.3d 623 (7th Cir. 2002);
United States v. National Financial Services, Inc., 98 F.3d 131 (4th Cir. 1996); Taylor v. Perrin,
Landry, DeLaunay & Durand, 103 F.3d 1232 (5th Cir. 1997); Bitah v. Global Collection Servs.,
968 F.Supp. 618 (D.N.M. 1997); Masuda v. Thomas Richards & Co., 759 F.Supp. 1456, 1461-2
(C.D.Cal. 1991) ("the letter falsely suggests to the least sophisticated debtor that an attorney has
been retained to collect his or her particular debt. Thus, the letter implies to the recipient that
TRC considers the debt to be more serious than TRC, in fact, considers it to be. . . . The
representation that independent outside counsel has been hired may unjustifiably frighten the
unsophisticated debtor into paying a debt that he or she does not owe. The FDCPA must be
construed to proscribe this means of collection"); United States v. Central Adjustment Bureau,
Inc., 667 F.Supp. 370, 380-81 (N.D.Tex. 1986) ("The attorney must have sufficient information to
satisfy himself that it is proper to send the dunning letter, i.e., he must investigate the merits of

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the claim before making a demand for payment. . . . the attorney must have the file for review to
determine the merits of the claim, as well as the limits of his authority"); Federal Trade
Commission, Statements of General Policy or Interpretation, Staff Commentary on the Fair Debt
Collection Practices Act, 53 Fed.Reg. 50,097, at 50,105 (1988) ("a debt collector may not send a
computer-generated letter deceptively using an attorney's name"). “[A]n attorney sending dunning
letters must be directly and personally involved in the mailing of the letters in order to comply
with the strictures of FDCPA. This may include reviewing the file of individual debtors to
determine if and when a letter should be sent or approving the sending of letters based on the
recommendations of others. [citation] Given these requirements, . . . there will be few, if any,
cases in which a mass-produced collection letter bearing the facsimile of an attorney's signature
will comply with the restrictions imposed by section 1692e." Avila, 84 F.3d at 228. The court
explained:

An unsophisticated consumer, getting a letter from an "attorney," knows the price

of poker has just gone up. And that clearly is the reason why the dunning
campaign escalates from the collection agency, which might not strike fear in the
heart of the consumer, to the attorney, who is better positioned to get the debtor's
knees knocking.

A letter from an attorney implies that a real lawyer, acting like a lawyer usually
acts, directly controlled or supervised the process through which the letter was
sent. That's the essence of the connotation that accompanies the title of "attorney."
A debt collection letter on an attorney's letterhead conveys authority. Consumers
are inclined to more quickly react to an attorney's threat than to one coming from a
debt collection agency. It is reasonable to believe that a dunning letter from an
attorney threatening legal action will be more effective in collecting a debt than a
letter from a collection agency. The attorney letter implies that the attorney has
reached a considered, professional judgment that the debtor is delinquent and is a
candidate for legal action. And the letter also implies that the attorney has some
personal involvement in the decision to send the letter. Thus, if a debt collector
(attorney or otherwise) wants to take advantage of the special connotation of the
word "attorney" in the minds of delinquent consumer debtors to better effect
collection of the debt, the debt collector should at least ensure that an attorney has
become professionally involved in the debtor's file. Any other result would
sanction the wholesale licensing of an attorney's name for commercial purposes, in
derogation of professional standards:
[A] lawyer has been given certain privileges by the state. Because of these
privileges, letters . . . purporting to be written by attorneys have a greater
weight than those written by laymen. But such privileges are strictly
personal, granted only to those who are found through personal
examination to measure up to the required standards. Public policy
therefore requires that whatever correspondence purports to come from a
lawyer in his official capacity must be at least passed upon and approved
by him. He cannot delegate this duty of approval to one who has not been
given the right to exercise the functions of a lawyer.

American Bar Association, Formal Opinion 68 (1932). (84 F.3d at 229)

A number of collection lawyers have recently sent out letters on attorney

letterhead which purport to state that the sender has not reviewed the debtor's file. The Second
and Fifth Circuits have held such disclaimers to be effective. Greco v. Trauner, Cohen &

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Thomas, LLP, 412 F.3d 360, 364 (2d Cir. 2005) ("at this time, no attorney with this firm has
personally reviewed the particular circumstances of your account"); Gonzalez v. Kay, 577 F.3d
600 (5th Cir. 2009) (if “clear and prominent”; not sufficient when on back of letter). Other courts
have disagreed regarding the efficacy of such disclaimers, either generally or based on the overall
message conveyed by the letter. Lesher v. Law Office of Mitchell N. Kay, P.C., 1:09-CV-0578,
2010 U.S. Dist. LEXIS 58263 (M.D.Pa., June 14, 2010) (violation even if disclaimer was on front
of letter); Robertson v. Richard J. Boudreau & Assocs., LLC, C09-1681 BZ, 2009 U.S. Dist.
LEXIS 117885 (N.D.Cal., Dec. 18, 2009) (“the brief Greco letter does not contain any of the
threatening language in defendant's letters and appended a statement of the debtor's rights that
fairly tracked the FDCPA. The Greco letter does not use language like ‘litigation’ or ‘any valid
legal defense’ or any of the inconsistent language this letter contains”); Henggeler v. Brumbaugh
& Quandahl, 8:11CV334, 2012 U.S. Dist. LEXIS 93402, *10-11 (D.Neb., July 5, 2012)
(“Defendants' reliance on the disclaimer that ‘there was no attorney involvement in sending this
letter’ is misplaced. The letters contain contradictory statements that ‘this office [known to be a
law office] represents [the respective creditors],’ and are written on law firm letterhead, which
could be misleading to an unsophisticated consumer.”).
Greco appears inconsistent with the treatment of disclaimers under the Federal
Trade Commission Act, where disclaimers which purport to negate a central message are
generally not considered sufficient to avoid deception, In re Cliffdale Associates, 103 FTC 110,
184 (1984) (“the Commission recognizes that in many circumstances, reasonable consumers do
not read the entirety of an ad or are directed away from the importance of the qualifying phrase
by the acts or statements of the seller”), and in trademark law, where it is not permissible to use
an established trademark coupled with a disclosure that the trademark owner has not authorized
the defendant's product, Boston Professional Hockey Ass'n v. Dallas Corp. & Emblem Mfg., Inc.,
510 F.2d 1004, 1013 (5th Cir. 1975). Furthermore, the mere sending of an attorney letter is a
representation that the lawyer is acting as a lawyer:

The committee believes that before a lawyers letter goes to a debtor the file must
have been turned over to the lawyer for collection. The lawyer must determine
what rights the parties have and whether applicable statutory or other legal
requirements have been met. The lawyer must have authority as well as
responsibility to determine the legal steps to be taken and to negotiate in behalf of
the client. None of these factors can exist if all the lawyer does is lend the lawyer's
name and letterhead to the client's use. (Iowa ethics opinion 91-24, Nov. 14,
1991.)
Similarly, Texas Ethics Opinion 484 states:

When an attorney signs a debtor letter or authorizes someone under his or her
direct supervision to sign such a letter, such action manifests that the attorney has
exercised professional judgement that the particular letter is appropriate for the
particular debtor and for a debtor's particular account. The rules require that an
attorney should review the debtor's file and determine that the letter to be sent is
appropriate for this particular debtor. A lawyer must exercise care and
independent judgement to make sure that each debtor's letter is accurate and
appropriate as to the account of the debtor.

If an attorney has not acted as such with respect to a debt, the use of an attorney letterhead serves
no legitimate purpose other than to deceive those who do not notice or grasp the disclaimer.
XIX. VIOLATIONS -- VOICEMAIL MESSAGES

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 A voicemail message is a “communication” within the meaning of 15 U.S.C.
§§1692d(6) and 1692e. Edwards v. Niagara Credit Solutions, Inc., 584 F.3d 1350 (11th Cir.
2009); Foti v. NCO Financial Systems, 424 F.Supp.2d 643, 669 (S.D.N.Y. 2006); Hosseinzadeh
v. M.R.S. Associates, Inc., 387 F.Supp.2d 1104, 1112, 1118 (C.D.Cal. 2005); Krapf v. Collectors
Training Institute of Illinois, Inc., 09-CV-391S, 2010 U.S. Dist. LEXIS 13063 (W.D.N.Y., Feb.
16, 2010); Mark v. J. C. Christensen & Assocs., 09-100, 2009 U.S.Dist. LEXIS 67724 (D.Minn.
Aug. 4, 2009); Widman v. Monterey Fin. Servs., 08-1331, 2009 U.S.Dist. LEXIS 38824 (W.D.Pa.,
May 7, 2009); Thomas v. Consumer Adjustment Co., 579 F.Supp.2d 1290, 1296-97 (E.D.Mo.
2008); Ramirez v. Apex Financial Mgmt., LLC, 567 F.Supp.2d 1035, 1041 (N.D.Ill. 2008);
Chalik v. Westport Recovery Corp., 09-60819-CIV, 2009 U.S. Dist. LEXIS 122029 (S.D.Fla.,
Oct. 30, 2009); Inman v. NCO Financial Systems, Inc., 08-5866, 2009 U.S. Dist. LEXIS 98215
(E.D.Pa., October 21, 2009); Pollock v. Bay Area Credit Serv., LLC, 08-61101-Civ, 2009 U.S.
Dist. LEXIS 71169 (S.D.Fla., Aug. 13, 2009); Drossin v. Nat'l Action Fin. Servs., 641 F. Supp. 2d
1314 (S.D.Fla. 2009); Joseph v. J. J. MacIntyre Cos., 281 F.Supp.2d 1156 (N.D.Cal. 2003);
Stinson v. Asset Acceptance, LLC, 1:05cv1026, 2006 WL 1647134, 2006 U.S. Dist. LEXIS 42266
(E.D. Va., June 12, 2006); Belin v. Litton Loan Servicing, LP, 8:06-cv-760-T-24 EAJ, 2006 WL
1992410, 2006 U.S. Dist. LEXIS 47953 (M.D.Fla., July 14, 2006); Knoll v. Allied Interstate, Inc.,
502 F. Supp. 2d 943, 946 (D.Minn. 2007) (“a debt collector violates § 1692d(6) if the collector
leaves an answering machine message under an alias and fails to disclose that the call is related to
debt collection”); Knoll v. IntelliRisk Mgmt. Corp., Civil No. 06-1211 (PAM/JSM), 2006 U.S.
Dist. LEXIS 77467 (D.Minn., October 16, 2006) (similar). See Horkey v. J.V.D.B. & Associates,
Inc., 333 F.3d 769, 774 (7th Cir. 2003) (message left with coworker).

Messages left by debt collectors will often violate 15 U.S.C. §§1692c-e and 1692g.
Potential violations include:

a. Failure to include the warning required by 15 U.S.C. §1692e(11)

and, if the initial communication, failure to provide the §1692g notice within 5 days.

b. If the voicemail is not solely accessed by the debtor, illegal third

party communications.

c. Failure to identify the caller’s company. 15 U.S.C. §1692d(6)

makes it unlawful for a debt collector to engage in the following conduct: “Except as provided in
section 1692b of this title, the placement of telephone calls without meaningful disclosure of the
caller's identity.” Under §1692d(6), it is essential that the caller provide the name of the debt
collection business. In Torres v. Procollect, Inc., No. 11-cv-02989-LTB, 2012 U.S. Dist. LEXIS
76985, *8-9 (D.Colo., June 1, 2012), the court held:

While neither a circuit court, see Costa v. Nat'l Action Fin. Servs., 634 F.Supp.2d
1069, 1074 n.5 (E.D. Cal. 2007), nor this Court has addressed whether § 1692d(6)
requires disclosure of a debt collector's company name, courts in other
jurisdictions have. They "have uniformly held that it requires a debt collector to
disclose the caller's name, the debt collection company's name, and the nature of
the debt collector's business." Baker v. Allstate Financial Services, Inc., 554 F.
Supp. 2d 945, 949 (D. Minn. 2008) (emphasis added); accord Valencia v.
Affiliated Group, Inv., 2008 U.S. Dist. LEXIS 73008, 2008 WL 4372895, *3 (S.D.
Fla. Sept. 24, 2008) (unpublished); Hosseinzadeh v. M.R.S. Assocs., Inc., 387
F.Supp.2d 1104, 1112 (C.D. Cal. 2005); Gilmore v. Account Mgmt, Inc., 2009
U.S. Dist. LEXIS 79508, 2009 WL 2848278, *5 (N.D. Ga. 2009); Davis v.
Bonewicz, 2011 U.S. Dist. LEXIS 133410, 2011 WL 5827796, *2 (E.D. Mo.

73
 2011); Fry v. Berks Credit and Collections, Inc., 2011 U.S. Dist. LEXIS 140256,
2011 WL 6057781 (N.D. Ohio 2011); Wright v. Credit Bureau of Georgia, Inc.,
548 F.Supp. 591, 597 (N.D. Ge. 1982); Frazier v. Absolute Collection Serv., Inc.,
767 F. Supp. 2d 1354, 1364 (N.D. Ga. 2011); [*9] c.f. Beeders v. Gulf Coast
Collection Bureau, 796 F.Supp.2d 1335, 1339 (M.D. Fla. 2011) ("FDCPA Section
1692d(6) does not prohibit a debt collection agency employee from using an alias
during a telephone call, as long as the employee accurately discloses the name of
the debt collection agency and explains the nature of its business.") (emphasis
added) (quoting Knoll v. Allied Ins., Inc., 502 F.Supp.2d 943, 946 (D. Minn.
2007)). For example, in Savage v. NIC, Inc., 2009 U.S. Dist. LEXIS 65071, 2009
WL 2259726, *3 (D. Ariz. July 28, 2009), a plaintiff sued a debt collector under §
1692d(6) when the debt collector's employee failed to identify his employer's
name in a voicemail left for the plaintiff. Even though the employee had left his
personal name, the court found that "no reasonable jury could find in favor of the
Defendant" because the employee had not disclosed the debt collection company's
name. Id.
XX. VIOLATIONS -- CONTACTS WITH THIRD PARTIES

Section 1692c provides debtors the "extremely important protection" of

prohibiting debt collectors from contacting third parties, including a debtor's employer, relatives
(other than the debtor's spouse), friends or neighbors, for any purpose other than obtaining
"location information." See also S. Rep. No. 382, 95th Cong. 2d Sess. 4, reprinted in 1977
U.S.C.C.A.N. 1695, 1698-99. There are a few highly regulated exceptions where the debtor
consents, a court has granted permission or to effect a post-judgment judicial remedy. § 1692c;
F.T.C. Official Staff Commentary § 805(b), 53 Fed. Reg. 50104; S. Rep. No. 382 , at 4. As
stated by the Senate, "[s]uch contacts are not legitimate collection practices and result in serious
invasions of privacy, as well as loss of job." Id. Debt collectors cannot communicate a consumer's
personal affairs to third persons". Id.

Contacts with the consumer's relatives, other than the spouse, violate the FDCPA.
West v. Costen, supra, 558 F.Supp. 564 (W.D.Va. 1983). Leaving a message on an answering
machine or voice mail system may result in an illegal third party communication if it is
foreseeable that a third party with whom the collector could not communicate directly would
access the device or system. Chlanda v. Wymard, C-3-93-321, 1995 U.S. Dist. LEXIS 14394
(S.D.Ohio 1995). See Committe v. Dennis Reimer Co., L.P.A., 150 F.R.D. 495 (D.Vt. 1993). One
case states that the collector must intend to communicate with a third party, Mostiller v. Chase
Asset Recovery Corp., 09-CV-218A, 2010 U.S. Dist. LEXIS 5208 (W.D.N.Y. January 22, 2010),
but this seems clearly wrong, and most other decisions are to the contrary. Thompson v.
Diversified Adjustment Service, Inc., H-12-922, 2013 WL 3973976, *6 (S.D.Tex., July 31, 2013),
holds:

Other courts have consistently concluded that debt collectors may be liable under
§1692c(b) for attempting to collect debts by leaving voicemail messages that were
inadvertently heard by third parties. See, e.g., Marisco v. NCO Fin. Sys., Inc., –––
F.Supp.2d ––––, 2013 WL 2285195, at *5 (E.D.N.Y. May 23, 2013); Travers v. Collecto,
Inc., 2013 WL 55819, at *3 (D.Mass. Jan.2, 2013) (holding that a debt collector violated
the FDCPA when it left a message on an answering machine “directed to a number which,
according to the plaintiff, was never associated with him, at a residence where he had not
resided for eight months, and as a result information regarding the plaintiff's debt was
communicated to the new resident.”); Friedman v. Sharinn & Lipshie, P.C., 2013 WL
1873302, at *4 (E.D.N.Y. Mar.28, 2013) (“[P]laintiff sufficiently alleges that the

74
 defendant violated Section 1692c(b) of the FDPCA by sharing personal and confidential
information about an alleged debt—presumably without plaintiff's permission via
answering machine messages that were overheard by third parties.”); Zortman v. J.C.
Christensen & Assocs., Inc., 819 F.Supp.2d 874, 879 (D.Minn.2011) (“[It is] possible to
communicate with someone in spite of lacking a deliberate or purposeful intent to convey
something to that particular person—for example, one may communicate with an
unintended audience.”); Cordes v. Frederick J. Hanna & Assocs., P. C., 789 F.Supp.2d
1173, 1174 (D.Minn.2011); Leahey v. Franklin Collection Serv., Inc., 756 F.Supp.2d
1322, 1327–28 (N.D.Ala.2010); Leyse v. Corporate Collection Servs., Inc., 2006 WL
2708451, at *4 (S.D.N.Y. Sept.18, 2006); F.T.C. v. Check Enforcement, 2005 WL
1677480, at *8 (D.N.J. July 18, 2005). But see Collier v. Professional Bureau of
Collections, 2012 WL 3745720, at *4–5 (D.Md.2012) (“Looking at the message in the
light most favorable to Ms. Collier, it was neither deceptive, threatening, coercive, or
abusive. In fact, the message provided ample opportunity for a person, other than Ms.
Collier, who received the message to ignore it or delete it. The communication was very
specific in that it was directed only to Ms. Collier.”).
Communications by postcard are expressly prohibited because of the risk that third parties will
inadvertently see the message, 15 U.S.C. §§1692b(4) and 1692f(7), and a message sent by fax or
left on a voicemail not known to be used solely by the debtor is the electronic equivalent of a
postcard.

The section is violated by any communication to a third party, even if the debt is
not expressly referenced, other than one that strictly complies with the provision allowing
location information to be gathered. Thus, a message left with a neighbor for the debtor to call
regarding some urgent matter is illegal. West v. Nationwide Credit, Inc., 998 F. Supp. 642 (W.D.
N.C. 1998); Shaver v. Trauner, 97-1309, 1998 U.S.Dist. LEXIS 19648 (C.D.Ill., Jul. 31, 1998)
(class and adoption of denial of motion to dismiss), 1998 U.S.Dist. LEXIS 19647 (C.D.Ill., May
29, 1998) (Magistrate Judge's denial of motion to dismiss); Krapf v. Collectors Training Institute
of Illinois, Inc., 09-CV-391S, 2010. U.S. Dist. LEXIS 1306, 2010 WL 584020 (W.D.N.Y. Feb.
16, 2010); Romano v. Williams & Fudge, Inc., 644 F.Supp.2d 653 (W.D.Pa. 2008); Thomas v.
Consumer Adjustment Co., 579 F.Supp.2d 1290 (E.D.Mo. 2008); Krug v. Focus Receivables
Mgmt., LLC, 2010 U.S.Dist. LEXIS 45850 (D.N.J. May 11, 2010); Leyse v. Corporate Collection
Services, 03 Civ. 8491 (DAB), 2006 U.S.Dist. LEXIS 67719 (S.D.N.Y. Sept. 18, 2006);
Wideman v. Monterey Fin. Servs., No. 08-1331, 2009 U.S.Dist LEXIS 38824 (W.D.Pa. May 7,
2009).
In Marx v. General Revenue Corp., 668 F.3d 1174 (10th Cir. 2011), the court held
that an “employment verification” sent to a consumer’s employer was not a “communication”
relating to a debt. “The facsimile was sent in September 2008 to Ms. Marx's employer as part of
GRC's inquiry into Marx's eligibility for [administrative] wage garnishment. When a GRC agent
called Ms. Marx's employer to verify her employment status, the agent was told to make the
request in writing. . . . GRC sent its standard employment verification form. This form displays
GRC's name, logo, address, and phone number, and bears an "ID" number representing GRC's
internal account number for Ms. Marx. The form indicates that its purpose is to "verify
[e]mployment" and to "[request] employment information"; blanks are left for the employer to fill
in the individual's employment status, date of hire, corporate payroll address, and position, and to
note whether the individual works full- or part-time.” The court reasoned that “absent any
evidentiary showing that Ms. Marx's employer either knew or inferred that the facsimile involved
a debt, the facsimile does not satisfy the statutory definition of a "communication." A party may
seek to verify employment status (without hinting at a debt) for any number of reasons, including
as part of processing a mortgage, conducting a background check before hiring, or determining

75
eligibility for an extension of credit.” The plaintiff “did not call any witnesses from her
employer's office to testify as to what they inferred from the facsimile.”

In Muzuco v. Re$ubmitit, LLC, Case No. 11-62628-Civ-SCOLA, 2012 U.S. Dist.

LEXIS 110373 (S.D.Fla., August 7, 2012), the court held that the purchaser of a dishonored
check cannot resubmit it to the debtor's bank because doing so is communicating with a third
party about the debt.
XXI. VIOLATIONS -- USE OF CREDITORS’ NAME

The use by a collection agency of the name of the creditor in communicating with
the debtor may violate the FDCPA. First Nationwide Collection Agency, Inc. v. Werner, 288 Ga.
App. 457, 654 S.E.2d 428 (2007).
XXII. VIOLATIONS -- ACQUISITION OF LOCATION INFORMATION

The debt collector may not communicate with someone other than the consumer
except to obtain location information. 15 U.S.C. §1692b. In doing so the debt collector must
identify himself but not discuss the debt. He also cannot request more explanation than specified
in the statute. Shaver v. Trauner, 97-1309, 1998 U.S.Dist. LEXIS 19648 (C.D.Ill., July 1, 1998),
adopting, 1998 U.S. Dist. LEXIS 19647 (C.D. Ill., May 29, 1998). Such a communication can be
made only once unless requested by that third party. If the consumer is represented by an
attorney, the debt collector may not communicate with any other person. Furthermore, if the
collector already has the permitted information, he should not be able to request it in order to
harass the debtor. Id.
XXIII. VIOLATIONS -- PLACE OF LEGAL ACTION BY DEBT COLLECTORS

A debt collector may bring an action to enforce an interest in real property only
where the real property is located. 15 U.S.C. §1692i(a)(1). This includes attorneys whose
collection activities are limited to purely legal activities, such as the filing of collection actions or
mortgage foreclosures. Shapiro & Meinhold v. Zartman, 823 P.2d 120 (Colo. 1992).

A collection action brought by a debt collector on a personal obligation may be

brought only in the "judicial district" where the consumer signed the contract or in which the
consumer resides at the time the action is filed. 15 U.S.C. §1692i(a)(2). Scott v. Jones, supra,
964 F.2d 314 (4th Cir. 1992); Dutton v. Wolhar, 809 F.Supp. 1130 (D.Del. 1992); Oglesby v.
Rotche, supra, 93 C 4183, 1993 WL 460841, 1993 U.S. Dist. LEXIS 15687 (N.D.Ill. 1993).

Cases are divided with respect to whether postjudgment collection proceedings

must comply with 15 U.S.C. §1692i. Decisions holding that they must include Fox v. Citicorp
Credit Servs., Inc., 15 F.3d 1507 (9th Cir. 1994), in which the Ninth Circuit held that the venue
provision reaches a writ of garnishment proceeding. Id. at 1515 ("The plain meaning of the term
`legal action' encompasses all judicial proceedings, including those in enforcement of a
previously-adjudicated right."). Accord, Adkins v. Weltman, Weinberg & Reis Co., L.P.A., No.
2:11-cv-00619, 2012 WL 604249 (S.D. Ohio Feb. 24, 2012); Blakemore v. Pekay, 895 F.Supp.
972, 982-83 (N.D. Ill. 1995).

Some decisions hold otherwise, relying on the ill-conceived notion that a

postjudgment collection proceeding is not really “against the consumer” even though their
purpose is to get the consumer’s wages or assets. In Pickens v. Collection Servs. of Athens, Inc.,
165 F. Supp. 2d 1376, 1377 (M.D. Ga. 2001), aff'd, 273 F.3d 1121 (11th Cir. 2001), the court

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held that a wage garnishment action did not fall within the FDCPA's venue provision because the
action was not against "a consumer." Id. at 1380. Accord, Smith v. Solomon & Solomon, P.C.,
CIV.A. 12-10274-RBC, 2012 WL 3636861 (D. Mass. Aug. 23, 2012); Schuback v. the Law
Offices of Phillip S. Van Embden, P.C., No. 1:12-CV-320 (M.D.Pa., Feb. 1, 2013).
XXIV. VIOLATIONS -- EXTRANEOUS MATERIAL ON ENVELOPES

Section 1692f(8) prohibits “Using any language or symbol, other than the debt
collector's address, on any envelope when communicating with a consumer by use of the mails or
by telegram, except that a debt collector may use his business name if such name does not
indicate that he is in the debt collection business.” Putting “U. S. Dept. of Education” on the
return address portion does not comply. Peter v. GC Services, LP, 310 F.3d 344 (5th Cir. 2002).
XXV. VIOLATIONS – FALSE STATEMENT OF LEGAL RIGHTS

The FDCPA prohibits a debt collector from misrepresenting its legal rights, even if
no threat is made. Easterling v. Collecto, Inc., 692 F.3d 229 (2nd Cir. 2012) (statement that
student loan could never be discharged in bankruptcy, unaccompanied by any threat, is false and
violated FDCPA).
XXVI. VIOLATIONS – SUIT BY PERSONS LACKING STANDING

If an entity does not own the account, or if it is not owed, the collector may not
collect or sue. E.g., Cox v. Hilco Receivables, L.L.C., 726 F.Supp.2d 659, 666 (N.D. Tex. 2010)
(“Improperly identifying oneself as the owner of a debt is certainly a misrepresentation of that
debt's legal status”); Wallace v. Washington Mut. Bank, F.A., 683 F.3d 323 (6th Cir. 2012) (suing
before ownership documents transferred); Bourff v. Rubin Lublin, LLC, 674 F.3d 1238, 1241
(11th Cir. 2012) (misidentification of BAC as creditor); Shoup v. McCurdy & Candler, LLC, 465
Fed. Appx. 882, 885 (11th Cir. 2012) (misidentification of MERS as creditor); Gearing v. Check
Brokerage Corp., 233 F.3d 469, 472 -73 (7th Cir. 2000) (allegation in its state court complaint
that it was “subrogated” to Ayerco's rights gave a false impression as to the legal status); Grant-
Hall v. Cavalry Portfolio Services, LLC, 856 F.Supp.2d 929, 942 (N.D. Ill. 2012)
(misrepresenting that CPS had the right to file suit); Manlapaz v. Unifund CCR Partners , 2009
WL 3015166 *5 (N.D. Ill. 2009) (suing on a debt it did not own); Matmanivong v. Unifund CCR
Partners, 2009 WL 1181529 *5 (N.D. Ill. 2009) (same); Hepsen v. J.C. Christensen and
Associates, Inc., 2009 WL 3064865 *5 (M.D. Fla. 2009) (false representation of
creditor’s name); Braatz v. Leading Edge Recovery Solutions, LLC, 2011 WL 9528479 *1 (N.D.
Ill. 2011) (identifying two companies might cause consumer to be concerned about the possibility
she was being defrauded or that she might pay the incorrect creditor and continue to have
outstanding debt).

XXVII. VIOLATIONS -- FALSE REPRESENTATIONS REGARDING TAX

CONSEQUENCES

The Internal Revenue Code treats cancellation of debt as income under specified
circumstances. 26 U.S.C. §6050P; 26 C.F.R. §1.6050P. The owner of a debt who cancels it
must file an informational form 1099-C if the amount cancelled exceeds $600.

Generally, cancellation of debt is income unless (a) there is a bona fide dispute
concerning the debtor’s obligation to pay, (b) the debtor is insolvent, (c) the debt is discharged in
bankruptcy.

77
 Misrepresentation of a debtor’s rights or liabilities under the Internal Revenue
Code in connection with the collection of a debt is an FDCPA violation. Kuehn v. Cadle Co.,
5:04-cv-432-Oc-10GRJ, 2007 U.S. Dist. LEXIS 25764 (M.D.Fla., April 6, 2007). This includes a
statement that a 1099 must be issued when a 1099 is not required. Wagner v. Client Services,
Inc., 08-5546, 2009 U.S. Dist. LEXIS 26604 (E.D.Pa., March 26, 2009); Sledge v. Sands, 182
F.R.D. 255 (N.D. Ill. 1998).
XXVIII. VIOLATIONS -- CONDUCT OF COLLECTION LITIGATION

A debt collector’s misrepresentation in a pleading that it is a subrogee is

actionable. Gearing v. Check Brokerage Corp., 233 F.3d 469 (7th Cir. 2000).

Suing the wrong person is a violation. Heathman v. Portfolio Recovery

Associates, LLC, 12-cv-201, 2013 WL 755674 (S.D.Cal., Feb. 27, 2013) (“Section 1692e
prohibits the use by a debt collector of ‘any false, deceptive, or misleading representation or
means in connection with the collection of any debt.’ Donohue, 592 F.3d at 1030. Filing a state
court complaint alleging a nonexistent debt clearly violates this section. See, e.g., Cox v. Hilco
Receivable, L.L.C., 726 F.Supp.2d 659, 666 (N.D.Tex.2010) (‘a debt collector's representation
that a debt is owed to it when it in fact is not, amounts to a misrepresentation barred by the
FDCPA.’). Here, the undisputed facts establish that PRA filed a state court collections complaint
against Heathman alleging a debt not in fact owed by Heathman. . . . Thus, the record supports
summary judgment as to liability under section 1692e.”).

The representation that a demand has been made when no demand has been made
violates the FDCPA. First Nationwide Collection Agency, Inc. v. Werner, 288 Ga. App. 457, 654
S.E.2d 428 (2007).

Other cases involving false statements in state court pleadings include

McCollough v. Johnson, Rodenburg & Lauinger, LLC, No. 09-35767, 2011 U.S. App. LEXIS
4072 (9th Cir., March 4, 2011); Todd v. Weltman, Weinberg, & Reis Co., L.P.A., 434 F.3d 432
(6th Cir. 2006); Hartman v. Great Seneca Financial Corp., 569 F.3d 606 (6th Cir. 2009); Blevins
v. Hudson & Keyse, Inc., 395 F. Supp. 2d 655 (S.D.Ohio 2004), later opinion, 395 F.Supp.2d 662
(S.D.Ohio 2004); Hartman v. Asset Acceptance Corp., 1:03-cv-113, 2004 U.S. Dist. LEXIS
24845 (S.D. Ohio Sept. 29. 2004); Jordan v. Thomas & Thomas, C-1-04-296, 2007 U.S. Dist.
LEXIS 71404 (S.D.Ohio September 26, 2007); Foster v. Velocity Invs., LLC, 07 C 0824 and 07 C
2989, 2007 U.S. Dist. LEXIS 63302 (N.D.Ill., August 24, 2007); Matmanivong v. Unifund CCR
Ptnrs., Case No. 08 CV 6415, 2009 U.S. Dist. LEXIS 36287 (N.D. Ill. Apr. 28, 2009); Ramirez v.
Palisades Collection LLC, No. 07 C 3840, 2008 U.S. Dist. LEXIS 48722 (N.D. Ill. June 23,
2008); Guevara v. Midland Funding NCC-2 Corp., No. 07 C 5858, 2008 U.S. Dist. LEXIS 47767
(N.D. Ill. June 20, 2008); Parkis v. Arrow Fin. Servs., No. 07 C 410, 2008 U.S. Dist. LEXIS 1212
(N.D. Ill. Jan. 8, 2008); Jenkins v. Centurion Capital Corp., No. 07 C 3838, 2007 U.S. Dist.
LEXIS 85218 (N.D. Ill. Nov. 15, 2007); Chavez v. Bowman, Heintz, Boscia & Vician, 07 C 670,
2007 U.S. Dist. LEXIS 61936 (N.D.Ill., August 22, 2007); Delawder v. Platinum Fin. Servs.
Corp., 1:04-cv-680, 2007 U.S. Dist. LEXIS 31174 (S.D.Ohio, April 27, 2007), earlier opinion,
2005 U.S. Dist. LEXIS 40139 (S.D.Ohio March 1, 2005); Lee v. Javitch, Block & Rathbone, LLP,
484 F. Supp. 2d 816 (S.D.Ohio 2007); Collins v. Sparacio, 03 C 64, 2003 WL 21254256
(N.D.Ill., May 30, 2003), later opinion, 2004 WL 555957 (N.D.Ill. Mar 19, 2004); Griffith v.
Javitch, Block & Rathbone, LLP, 1:04cv238 (S.D.Ohio, July 8, 2004); Gionis v. Javitch, Block &
Rathbone, 405 F. Supp. 2d 856 (S.D.Ohio. 2005); Stolicker v. Muller, Muller, Richmond, Harms,
Myers & Sgroi, P.C., 1:04-CV-733, 2005 U.S. Dist. LEXIS 32404 (W.D.Mich., Sept. 9, 2005),
later opinion, 2006 U.S. Dist. LEXIS 36000 (W.D. Mich., June 2, 2006); Reyes v. Kenosian &
Miele, LLP, 619 F.Supp.2d 796 (N.D.Cal. 2008); Eckert v. LVNV Funding, LLC, 4:08cv1802,

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2009 U.S.Dist. LEXIS 65295 (E.D.Mo., July 28, 2009). This is commonly alleged to be done by
bad debt buyers, whose employees have no knowledge of the underlying debt and usually no
records, in order to obtain default judgments.

In Avery v. Gordon, 08-139, 2008 U.S.Dist. LEXIS 86811 (D.Ore., Oct. 27, 2008),
an action was sustained for attaching “generic” documents to complaints.

Gearing also holds that misrepresentations are actionable regardless of intent. 233
F.3d at 473. The "FDCPA is a strict liability statute," and "proof of one violation is sufficient to
support summary judgment for the plaintiff." Cacace v. Lucas, 775 F. Supp. 502, 505 (D. Conn.
1990).

However, it is not necessary for the debt collector to write pleadings that are
intelligible to the “unsophisticated consumer.” Beler v. Blatt, Hasenmiller, Leibsker & Moore,
LLC, 480 F.3d 470 (7th Cir. 2007).

Beler is often overstated by defendants: “Despite Beler, other district courts in the
Seventh Circuit have allowed debtors to bring FDCPA claims alleging false statements and unfair
acts during state court proceedings. E.g., Guevara v. Midland Funding NCC-2 Corp., 2008 U.S.
Dist. LEXIS 47767, 2008 WL 4865550, *5 (N.D. Ill. Jun. 20, 2008) (plaintiff may state FDCPA
claim based on alleged misrepresentation and unfair collection practices in state court complaint);
Polzin v. Unifund CCR Partners, 2008 U.S. Dist. LEXIS 112356, 2008 WL 2324618, *4 (E.D.
Wis. Jun. 5, 2008) (granting leave to proceed on a FDCPA claim that creditor falsely stated
amount of legal interest associated with debt in state court filings); Parkis v. Arrow Fin. Servs.,
2008 U.S. Dist. LEXIS 1212, 2008 WL 94798 (N.D. Ill. Jan. 8, 2008) (denying summary
judgment on FDCPA claim for filing state court complaint that attempted to collect time-barred
debt); Jenkins v. Centurion Capital Corp., 2007 U.S. Dist. LEXIS 85218, 2007 WL 4109235, at
*2-3 (N.D. Ill. Nov. 15, 2007) (denying motion to dismiss claim alleging failure to attach contract
and details of assignments to state court complaint); Foster v. Velocity Investments, LLC, 2007
U.S. Dist. LEXIS 63302, 2007 WL 2461665, at *2 (N.D. Ill. Aug. 24, 2007) (denying motion to
dismiss claim alleging misstatement of principal balance as including both principal and interest
in state court complaint). These courts note that although the Seventh Circuit has questioned the
applicability of the FDCPA to state court filings, it has not decided that issue. Guevara, 2008
U.S. Dist. LEXIS 47767, 2008 WL 4865550, *5; Foster, 2007 U.S. Dist. LEXIS 63302, 2007 WL
2461665, *2. Defendants distinguish Beler on the additional ground that the plaintiff in that case
challenged the form or sufficiency of a state complaint and not any false representations in the
pleadings. [¶] I find the reasoning in these district court cases to be persuasive. . . .” Eichman v.
Mann Bracken, LLC, 689 F. Supp. 2d 1094, 1100 (W.D.Wisc. 2010).

The FTC has stated that it “may take law enforcement action to address conduct
related to debt collection litigation and arbitration to the extent that such conduct violates the FDCPA,
the FTC Act, or other laws the Commission enforces.” “Collecting Consumer Debts: The
Challenges of Change: A Federal Trade Commission Workshop Report (February 2009),” p. 66.

The Seventh Circuit has held that “fraud on the court” is not permissible theory
and that FDCPA only applies to representations to debtors and persons standing in shoes of
debtors. O’Rourke v. Palisades Acquisition XVI, LLC, 635 F.3d 938 (7th Cir. 2011).

Other courts hold that representations to third parties are actionable. Todd v.
Weltman, Weinberg & Reis Co., L.P.A., 434 F.3d 432,437-447 (6th Cir. 2006) (debt collector
which submitted affidavit to court which falsely attested that the debtor’s assets were not exempt
was not immune from FDCPA liability); Picht v. Jon R. Hawks, Ltd., 236 F.3d 446, 448-451 (8th

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Cir. 2001) (service of garnishment summons, not authorized by law, on a bank holding a debtor’s
funds violated the FDCPA); Sykes v. Mel Harris & Assoc., LLC, 757 F. Supp. 2d 413, 423-424
(S.D.N.Y. Dec. 29, 2010)(“sewer service” – presenting a court with an affidavit that knowingly
and falsely stated that the defendant had been served with process, when the defendant had not
been served – was covered by the FDCPA, even though an affidavit of service filed with the court
is purely a representation to the court and not the debtor); Spiegel v. Judicial Attorney Services,
Inc., 09 C 7163, 2011 U.S. Dist. LEXIS 9350 (N.D.Ill., Feb. 1, 2011) (also involving sewer
service); Bowens v. Mel S. Harris & Assoc., LLC, 07-CV-459S, 2008 U.S. Dist. LEXIS 16120
(W.D.N.Y., March 3, 2008) (same); Campos v. Brooksbank, 120 F. Supp. 2d 1271 (D.N.M. 2000)
(same); Owings v. Hunt & Henriques, 08-cv-1931, 2010 U.S. Dist. LEXIS 91819 (S.D. Cal.
2010) (filing a false affidavit that a defendant is not protected by the Servicemembers Civil Relief
Act).

In Bandy v. Midland Funding, LLC, No. 12–00491, 2013 WL 210730 (S.D.Ala.,

Jan. 18, 2013), the defendant debt buyer filed a case and appeared at trial without any witnesses
or evidence, resulting in judgment for Bandy. Bandy filed an FDCPA action alleging that
“Midland's intent, at the time of filing and throughout the [state court] litigation, was not to
initiate the action and prove its claims in court; but rather, to imply to [Bandy], through its
collection law firm and its collection lawsuit, that it was willing to prove its claims and thereby
intimidate or otherwise coerce [Bandy] into 1) paying [Midland] or 2) taking no action and
allowing [Midland] to obtain a default judgment.” Bandy also alleged that Midland “routinely
does so in many other state-court collection suits, without obtaining evidence and without ever
intending to actually prove those claims.” The court refused to find an FDCPA violation absent a
specific misrepresentation: “Bandy cites several district court cases that have distinguished
Harvey and Deere in declining to dismiss FDCPA claims arising from collection lawsuits in state
courts. However, the Court is not persuaded by those cases. Unlike Bandy, who does not allege
that the collection complaint contained any statement that Midland knew or should have known
was false, in three of those cases the consumer-plaintiffs successfully stated FDCPA claims by
alleging that representations made in the state court collection complaints themselves were
intentionally false or deceptive. . . . Bandy's FDCPA claims rest on the allegation that Midland
chose not to acquire evidence needed to prove its case, not that it was incapable of doing so or
that it could never do so.”

On the other hand, an essentially identical complaint was sustained in Samuels v.

Midland Funding, LLC, 12-0490, 2013 WL 466386 (S.D.Ala., Feb. 7, 2013), which expressly
rejected Bandy.
XXIX. VIOLATIONS – USING FALSE NAME

Courts have held that a debt collector avoids violating §1692 e(14) if “it properly
registers its incorporated name and any alternate trade names in any of 1) the debt collection
company's place of incorporation, 2) the debt collection company's principal place of business, or
3) the state in which the plaintiff was injured." Boyko v. Am. Int'l Group, Inc., 2012 U.S. Dist.
LEXIS 81229, *8-9 (D. N.J. 2012).

The unsophisticated consumer should be able to tell without too much trouble
what debt collection entity it is dealing with.
XXX. REMEDIES AND PROCEDURE

1. JURISDICTION

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 Federal and state courts have concurrent jurisdiction of FDCPA suits. 15 U.S.C.
§1692k(d).

A single violation is sufficient to support judgment for the consumer. Cacace v.

Lucas, 775 F.Supp. 502, 505 (D.Conn. 1990); Supan v. Medical Bureau of Economics, Inc., 785
F.Supp. 304, 305 (D.Conn. 1991).

A successful consumer is entitled to an award of actual damages, statutory

damages up to $1,000, costs and attorney's fees. 15 U.S.C. §1692k(a). Class action relief is also
available. 15 U.S.C. §1692k(a)(2)(B).

In FDCPA litigation brought against the debt collector, the collector normally may
not assert a counterclaim for the underlying debt. Peterson v. United Accounts, Inc., 638 F.2d
1134 (8th Cir. 1981); Leatherwood v. Universal Business Service Co., 115 F.R.D. 48 (W.D.N.Y.
1987); Gutshall v. Bailey & Assoc., 90 C 20182, 1991 U.S.Dist. LEXIS 12153 (N.D.Ill. 1991);
Venes v. Professional Service Bureau, Inc., 353 N.W.2d 671 (Minn. App. 1984) (is permissive);
Hart v. Clayton-Parker & Assoc., 869 F. Supp. 774 (D.Ariz. 1994); Ayres v. National Credit
Management Corp., 90-5535, 1991 U.S. Dist. LEXIS 5629, 1991 WL 66845, at *4 (E.D. Pa.
April 25, 1991); Zhang v. Haven-Scott Assoc., Inc., 95-2126, 1996 WL 355344, 1996 U.S.Dist.
LEXIS 8738 (E.D.Pa., June 21, 1996).
2. DISCOVERY

Among the areas that have been held discoverable in FDCPA cases:

a. The source of a debt and the amount a bad debt buyer paid for
plaintiff’s debt. Coppola v. Arrow Financial Services, 3:02CV577,
2002 U.S. Dist. LEXIS 26788, 2002 WL 32173704 (D.Conn., Oct.
29, 2002) (must phrase request clearly); Kimbro v. IC System,
3:01CV1676, 2002 WL 1816820 (D.Conn. July 22, 2002); Boutvis
v. Risk Management Alternatives, Inc., 3:01 CV 1933 (DJS), 2002
U.S. Dist. LEXIS 8521 (D.Conn., May 3, 2002) (price paid is
relevant to the nature of the relationship between the alleged
assignee and prior owner, i.e. had the company actually bought the
debt). A low price is also relevant to whether the purchaser is on
notice that the debt is time-barred or discharged in bankruptcy.
b. How amount sought was calculated. Coppola v. Arrow Financial
Services, 3:02CV577, 2002 U.S. Dist. LEXIS 26788, 2002 WL
32173704 (D.Conn., Oct. 29, 2002); Kimbro v. IC System,
3:01CV1676, 2002 WL 1816820 (D.Conn. July 22, 2002).

c. Where in issue, list of reports to credit bureaus. Coppola v. Arrow

Financial Services, 3:02CV577, 2002 U.S. Dist. LEXIS 26788,
2002 WL 32173704 (D.Conn., Oct. 29, 2002).

d. Documents conferring authority on defendant to collect debt.

Coppola v. Arrow Financial Services, 3:02CV577, 2002 U.S. Dist.
LEXIS 26788, 2002 WL 32173704 (D.Conn., Oct. 29, 2002);
Kimbro v. IC System, 3:01CV1676, 2002 WL 1816820 (D.Conn.
July 22, 2002); Yancey v. Hooten, 180 F.R.D. 203 (D.Conn. 1998).

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e. Number of times offending collection letters were used. Yancey v.
Hooten, 180 F.R.D. 203 (D.Conn. 1998)

f. In a class action, tax returns, financial statements. Mailloux v.

Arrow Financial Services, LLC, 01 CV 2000, 2002 U.S. Dist.
LEXIS 3314, 2002 WL 246771 (E.D.N.Y., Feb. 21, 2002); Trevino
v. ABC Am., Inc., 232 F.R.D. 612 (N.D.Cal. 2006); Barkouras v.
Hecker, 06-366, 2007 U.S.Dist. LEXIS 12772 (D.N.J., March 12,
2007). Discovery as to net worth includes financial statements,
Oakes v. Halvorsen Marine Ltd., 179 F.R.D. 281 (C.D. Cal. 1998),
bank statements, tax returns, back up documentation for any lines
of credit, and credit card statements. Duval v. Law Offices of
Andreu, CASE NO. 09-22636-CIV-UNGARO/SIMONTON, 2010
U.S. Dist. LEXIS 70617 (S.D. Fla. 2010). See also, del Campo v.
Am. Corrective Counseling Servs., Case No.: C 01-21151 JW
(PVT), 2009 U.S. Dist. LEXIS 103771 (N.D. Cal. Oct. 23, 2009);
Smith v. Greystone Alliance LLC, 09 C 5585, 2011 U.S. Dist.
LEXIS 95368 (N.D.Ill. Aug. 23, 2011).

g. With respect to class numbers and issues, see Gray v. First

Winthrop Corp., 133 F.R.D. 39 (C.D.Cal. 1990) ("[O]rder staying
discovery pending class certification would be unworkable, since
plaintiffs must be able to develop facts in support of their class
certification motion"); Zahorik v. Cornell University, 98 F.R.D. 27
(N.D.N.Y. 1983) (discovery is often necessary before plaintiffs can
satisfy the requirements of Fed.R.Civ.P. 23(a)); Walker v. World
Tire Corp., Inc., 563 F.2d 918, 921 (8th Cir. 1977)(the propriety of
class action status can seldom be determined on the basis of
pleadings alone, and parties must be offered the opportunity to
discover evidence on the issue.); McCray v. Standard Oil Co., 76
F.R.D. 490, 500 (N.D.Ill. 1976); Kelly v. Montgomery, Lynch &
Associates, Inc., 1:07cv919, 2007 U.S.Dist. LEXIS 93651
(N.D.Ohio. Dec. 13, 2007). If class members are witnesses there is
no reason they cannot be identified before certification. Best Buy
Stores v. Superior Court, 37 Cal. App. 4th 772, 40 Cal. Rptr. 3d 575
(2006).

h. Proof of prior illegal acts is admissible to show knowledge and

intent. Joseph Taylor Coal Co. v. Dawes, 122 Ill.App. 389 (1905),
aff'd. 220 Ill. 147, 77 N.E. 131 (1906); Edgar v. Fred Jones
Lincoln-Mercury, 524 F.2d 162, 167 (10th Cir. 1975; Eaves v.
Penn, 587 F.2d 453, 463-4 (10th Cir. 1978)(in civil action for
breach of fiduciary duty, evidence of breaches of fiduciary other
than one for which recovery was sought properly admitted to show
intent); Welch v. Barnett, 34 Okla. 166 125 P. 472 (1912) (that five
Indians willed property to the same unrelated white men in different
transactions is convincing proof that undue influence and fraud
were practiced on all); Barry v. Arrow Pontiac, Inc., 100 N.J. 57,
494 A.2d 804, 814 (1985).

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 i. Where a good faith defense is asserted, prior claims. Trevino v.
ABC Am., Inc., 232 F.R.D. 612 (N.D.Cal. 2006). “In their answer to
the complaint, defendants claim that they had a good faith belief
that their collection efforts were lawful. While plaintiffs' requests
may be phrased too broadly, information relating to whether or not
defendants had claims filed against them, participated in litigation
or arbitration, or received demand letters from attorneys about the
legality of this particular type of collection effort under the FDCPA
is relevant and must be disclosed.”

j. Manuals relating to the practices in question. Trevino v. ABC Am.,

Inc., 232 F.R.D. 612 (N.D.Cal. 2006); Seifried v. Portfolio
Recovery Associates, LLC, 12-cv-0032, 2013 WL 3340685
(E.D.Okla., July 2, 2013).

k. Items which should generally be requested include:

(1) All insurance policies that may afford coverage with respect
to the matters complained of, together with all
correspondence accepting or declining coverage or reserving
rights with respect thereto.

(2) Identify any testing done of defendant’s collection letters.

(3) Communications from recipients of the letters containing

inquiries about the allegedly misleading item in the letter, or
complaints that the letters were incorrect or
incomprehensible. The Seventh Circuit has suggested
reference to trademark cases by analogy, Johnson v.
Revenue Management Corp., 169 F.3d 1057 (7th Cir. 1999),
and “evidence of actual confusion” is one of the “most
important factors" in a trademark case. Ty, Inc. v. Jones
Group, Inc., 237 F.3d 891, 898 (7th Cir. 2001). The
Johnson court specifically encouraged inquiry into evidence
of actual confusion by debtors. 169 F.3d at 1061.

(4) A claim that a person lacks knowledge is generally not an

appropriate reason for refusing to produce him, as the
opposing party is entitled to test the alleged lack of
knowledge. Amherst Leasing Corp. v. Emhart Corp., 65
F.R.D. 121, 122 (D.Conn. 1974).

(5) The consumer’s motives in filing suit and the circumstances

regarding same are generally not a proper subject of
discovery in either a class or an individual action. Amherst
Leasing Corp. v. Emhart Corp., 65 F.R.D. 121 (D.Conn.
1974); Cresswell v. Prudential-Bache Securities, Inc., 105
F.R.D. 64 (S.D.N.Y. 1985).
3. QUESTIONS OF LAW VS. FACT

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 All Courts of Appeal other than the Seventh Circuit treat the issue of whether a
collection letter complies with the FDCPA as one of law. Terran v. Kaplan, 109
F.3d 1428, 1432-33 (9th Cir. 1997) (determination of whether language in
collection letter overshadowed or contradicted validation notice, like interpretation
of language in contracts or similar written documents, does not turn on the
credibility of extrinsic evidence and, therefore, presents a question of law to be
reviewed de novo); Swanson v. Southern Oregon Credit Serv., Inc., 869 F.2d 1222,
1225-26 (9th Cir. 1988); Russell v. Equifax A.R.S., 74 F.3d 30, 33, 35 (2d Cir.
1996); Wilson v. Quadramed Corp., 225 F.3d 350, 354-55 (3rd Cir. 2000); Peters
v. General Service Bureau, Inc., 277 F.3d 1051 (8th Cir. 2002).

The Seventh Circuit treats the issue as one of fact. The question is one for the trier
of fact unless a reasonable trier of fact would have to find that the statement is or is
not false or deceptive. In a case where the misleading or false character of the
representation is not clear, the Seventh Circuit requires evidence such as a survey
that people exposed to the statement were confused. Hahn v. Triumph
Partnerships LLC, 557 F.3d 755, 757-58 (7th Cir. 2009); Wahl v. Midland Credit
Management, Inc., 556 F.3d 643, 645-46 (7th Cir. 2009); Muha v. Encore
Receivable Mgmt., 558 F.3d 623, 267 (7th Cir. 2009); Williams v. OSI Educational
Services, Inc., 505 F.3d 675, 678 (7th Cir. 2007); Johnson v. Revenue Management
Corp., 169 F.3d 1057 (7th Cir. 1999).

Finally, some statements are sufficiently confusing or misleading that a court

should find them to violate the FDCPA unless the defendant explains why they are
not confusing. Muha v. Encore Receivable Mgmt., 558 F.3d 623, 267 (7th Cir.
2009).
4. MATERIALITY

Several circuits have imposecd a materiality requirement on false or deceptive

statements. Hahn v. Triumph Partnerships LLC, 557 F.3d 755, 757-58 (7th Cir. 2009); Wahl v.
Midland Credit Management, Inc., 556 F.3d 643, 645-46 (7th Cir. 2009); Donohue v. Quick
Collect, Inc., 592 F.3d 1027 (9th Cir. 2010); Miller v. Javitch, Block & Rathbone, 561 F.3d 588
(6th Cir. 2009); Corazzini v. Litton Loan Servicing LLP, 1:09-cv-199 (MAD/ATB), 2011 U.S.
Dist. LEXIS 63565 (N.D.N.Y. June 15, 2011).

“Statements are material if they influence a consumer's decision--to pay a debt in

response to a dunning letter, for example, see Muha, 558 F.3d at 628--or if they would impair the
consumer's ability to challenge the debt at issue. See Berg v. Blatt, Hasenmiller, Leibsker &
Moore LLC, No. 07 C 4887, 2009 U.S. Dist. LEXIS 26808, 2009 WL 901011, at *7 (N.D. Ill.
Mar. 31, 2009). AFNI's false statements are material in both related senses; AFNI's statements
that it is "unable to investigate" a consumer's dispute due to "insufficient information" both
impair the consumer's ability to challenge the debt at issue and influence his or her decision to
pay the debt.“ Hale v. AFNI, Inc., No. 08 CV 3918, 2010 U.S. Dist. LEXIS 6715, *22 (Jan. 26,
2010). Misrepresenting the financial consequences of not paying a debt is “material.” Lox v.
CDA, Ltd., 689 F.3d 818 (7th Cir. 2012). Correct identification of the debt collector and the owner
of the debt is “material.” Wallace v. Wash. Mut. Bank, F.A., 683 F.3d 323 (6th Cir. 2012).

All conduct specifically prohibited or disclosures specifically required by the

FDCPA is “material.” Mark v. J. C. Christensen & Assoc., Inc., 09-100, 2009 U.S.Dist. LEXIS
67724, *11 (D.Minn. Aug. 4, 2009); Warren v. Sessoms & Rogers, P.A., 676 F.3d 365, 374 (4th
Cir. 2012) (violations of 1692e(11) are always “material”); Garo v. Global Credit & Collection

84
Corp., CV-09-2506-PHX-GMS, 2011 U.S. Dist. LEXIS 7737 (D.Ariz. January 26, 2011).

In Massey v. On-Site Manager, Inc., 285 F.R.D. 239 (E.D.N.Y. 2012), the court
stated (*20-22):

Defendant's reliance on cases applying a materiality requirement to FDCPA

§1692e claims is misplaced. Those cases address the provisions of FDCPA §1692e
that prohibit false representations. In other words, they address the anti-fraud
provisions of FDCPA §1692e. Materiality is almost always a required element in
proving a fraud. See Hahn v. Triumph P'ships, 557 F.3d 755, 757 (7th Cir. 2009)
("Materiality is an ordinary element of any federal claim based on a false or
misleading statement."). But FDCPA §1692e also contains other provisions that do
not require a showing of materiality. For example, FDCPA §1692e(11) mandates
that debt collectors disclose in the initial communication with a consumer that they
are attempting to collect a debt. The failure to give the required disclosure is
actionable per se, without any requirement of materiality. Warren v. Sessoms &
Rogers, P.A., 676 F.3d 365, 374 (4th Cir. 2012) ("whether a materiality
requirement attaches to other violations of §1692e has no impact on [plaintiff's]
allegations that the defendants violated § 1692e(ll )."). Statutory damages are
available for every consumer who has suffered a violation of FDCPA §1692e(ll ),
regardless of whether they were actually injured or not. See 15 U.S.C.
§1692k(a)(2)(A).

For example, disclosing the present owner of the debt is specifically required and should always
be “material.” Wallace v. Washington Mutual Bank, F.A., 683 F.3d 323 (6th Cir. 2012).

5. ACTUAL DAMAGES

A debt collector who has violated any provision of the FDCPA is liable for actual
damages. 15 U.S.C. §1692k(a)(1).

Cases are divided as to whether payment on a valid debt induced by an FDCPA

violation constitutes actual damages. Wiginton v. Pacific Credit Corp., 2 Haw. App. 435, 634
P.2d 111, 118 (1981), and Moritz v. Daniel N. Gordon, P.C., 895 F.Supp.2d 1097 (W.D.Wash.
2012) (under state debt collection statute), hold that it does not. Alonso v. Blackstone Financial
Group, 1:11cv1693, 2013 WL 3992122 (E.D.Cal., Aug. 2, 2013), Hamid v. Stock & Grimes, LLP,
876 F.Supp.2d 500 (E.D.Pa. 2012), and Abby v. Page, 1:10cv23589, 2013 WL 141145 (S.D.Fla.,
Jan. 11, 2013), hold that it does. If the debt is time-barred or there is another defense payment is
actual damages. Gervais v. O’Connell, Harris & Assoc., 297 F.Supp.2d 435 (D.Conn. 2003).

Failure to verify a debt before proceeding with a collection lawsuit may entitle the
consumer to damages, but not to dismissal of the collection case. Midland Funding v. Pipkin,
2012 UT App 185, 283 P.3d 541 (2012), at n. 1.

Pipkin also argues that the Fair Debt Collection Practices Act (FDCPA), see
generally 15 U.S.C.A. §§ 1692-1692p (2009 & Supp. 2012), precluded Midland
from filing a collection action against Pipkin until Pipkin received information that
he timely requested from Midland regarding the debt in accordance with the terms
of the initial collection letter Midland sent Pipkin. The letter stated that Midland
would "suspend [its] efforts to collect the debt (through a lawsuit, arbitration or
otherwise) until [it] mail[ed] the requested information to [Pipkin]," pursuant to
the FDCPA. See generally id. § 1692g(b) (2009) ("If the consumer notifies the

85
 debt collector in writing within the thirty-day period described in subsection (a) of
this section that the debt, or any portion thereof, is disputed, or that the consumer
requests the name and address of the original creditor, the debt collector shall
cease collection of the debt, or any disputed portion thereof, until the debt collector
obtains verification of the debt or a copy of a judgment, or the name and address of
the original creditor, and a copy of such verification or judgment, or name and
address of the original creditor, is mailed to the consumer by the debt collector.");
id. § 1692k(a) ("[A]ny debt collector who fails to comply with any provision of
this subchapter with respect to any person is liable to such person . . . ."). While
Midland's alleged failure to comply with the FDCPA may subject it to liability
under the act, such failure is not a defense to liability for the underlying debt. See
Balsly v. West Mich. Debt Collections, Inc., No. 3:11cv642-DJN, 2012 WL
628490, at *12 (E.D. Va. Feb. 27, 2012) (mem.) ("Pursuant to the FDCPA, [the
alleged debtor] has a right to pursue his claim regardless of whether he is found
liable on the debt . . .—the two rights are not coterminous."); United States v.
Iwanski, 805 F. Supp. 2d 1355, 1359 (S.D. Fla. 2011) ("[A] violation of th[e
FDCPA] does not relieve Defendant of his obligation to pay the underlying
debt."); Vitullo v. Mancini, 684 F. Supp. 2d 760, 765 (E.D. Va. 2010) (mem.)
("Nothing in the FDCPA suggests, explicitly or implicitly, that debtors might seek
declaratory judgments cancelling or extinguishing accrued debts, in lieu of
damages, for FDCPA violations . . . ."); see also Schroyer v. Frankel, 197 F.3d
1170, 1178 (6th Cir. 1999); Keele v. Wexler, 149 F.3d 589, 594 (7th Cir. 1998);
McCartney v. First City Bank, 970 F.2d 45, 47 (5th Cir. 1992) ("'The [FDCPA] is
designed to protect consumers who have been victimized by unscrupulous debt
collectors, regardless of whether a valid debt actually exists.'" (quoting Baker v.
G.C. Servs. Corp., 677 F.2d 775, 777 (9th Cir. 1982))); Torres v. ProCollect, Inc.,
No. 11-cv-02989-LTB, 2012 WL 1969280, at *3 (D. Colo. June 1, 2012) (mem.);
Kolker v. Duke City Collection Agency, 750 F. Supp. 468, 471 (D. N.M. 1990)
[**4] (mem.). . . .

Actual damages include emotional distress. The debt collector may be held "liable
for any mental and emotional stress, embarrassment, and humiliation caused" by improper debt
collection activities. Kleczy v. First Federal Credit Control, Inc., 21 Ohio App.3d 56, 486 N.E.2d
204, 207 (1984); Venes v. Professional Service Bureau, Inc., 353 N.W.2d 671 (Minn. Ct. App.
1984); Baez-Martinez v. PMS, 95-1409(CC), 1997 U.S. Dist. LEXIS 3314 (D.P.R. 1997);
McGrady v. Nissan Motor Accep. Corp., 40 F.Supp. 2d 1323 (M.D.Ala. 1998); Carrigan v.
Central Adjustment Bureau, 502 F.Supp. 468 (N.D. Ga. 1980); Rawlings v. Dovenmuehle Mtge,
Inc., 64 F.Supp.2d 1156 (M.D.Ala. 1999). State law requirements regarding the proof of
intentional or negligent infliction of emotional distress are not applicable to actual damages under
the FDCPA. Smith v. Law Offices of Mitchell N. Kay, 124 B.R. 182, 185 (D.Del. 1991); Howze v.
Romano, 92-644, 1994 WL 827162, 1994 U.S. Dist. LEXIS 20547 (D.Del. Dec. 9, 1994);
Crossley v. Lieberman, 90 B.R. 682 (E.D.Pa. 1988), aff'd, 868 F.2d 566 (3d Cir. 1989); Teng v.
Metropolitan Retail Recovery, 851 F.Supp. 61, 68-9 (E.D.N.Y. 1994); Donahue v. NFS, Inc., 781
F.Supp. 188, 193-4 (W.D.N.Y. 1991).

Awards in harassment cases:

a. Panahiasl v. Gurney, 04-4479, 2007 U.S.Dist. LEXIS 17269

(N.D.Cal., March 8, 2007): $50,000 to one plaintiff and $10,000 to
another for repeated telephone abuse, upon testimony of
embarrassment, fear, anger, panic, humiliation, nervousness, crying
fits, difficulty eating and sleeping, and diarrhea.

86
 b. Robertson v. Horton Bros. Recovery, 02-1656, 2007 U.S.Dist.
LEXIS 48602 (D.Del. July 3, 2007). $75,000 actual damages
awarded for receipt of threatening and vulgar calls, visits.

c. Southern Siding Co. v. Raymond, 703 So.2d 44 (La.App. 1997)

($5,000 actual and $2,000 statutory damages awarded to husband
and wife under FDCPA for emotional distress upon proof of undue
street, anxiety, sleeplessness, and depression after receipt of
threatening letter).

d. Venes v. Professional Service Bureau, 353 N.W.671 (Minn. App.

1984) ($6,000 for stress caused by telephone harassment).

e. Smith v. Law Offices of Mitchell N. Kay, 124 B.R. 182 (D.Del.

1991) ($3,000 for emotional distress).
6. STATUTORY DAMAGES

In addition to actual damages, if any, the consumer may be awarded "such

additional damages as the court may allow, but not exceeding $1,000." 15 U.S.C. §1692k(a)(2).
The consumer need not show any actual damages in order to recover statutory damages. Bartlett
v. Heibl, supra; Baker v. G.C. Services Corp., 677 F.2d 775, 780-81 (9th Cir. 1982); Harvey v.
United Adjusters, supra, 509 F.Supp. 1218 (D.Or. 1981); Woolfolk v. Van Ru Credit Corp., 783
F.Supp. 724, 725 (D.Conn. 1990); Cacace v. Lucas, 775 F.Supp. 502 (D.Conn. 1990); Riveria v.
MAB Collections, Inc., 682 F.Supp. 174, 177 (W.D.N.Y. 1988); Kuhn v. Account Control
Technol., 865 F.Supp. 1443, 1450 (D.Nev. 1994). It follows that where only statutory damages
are claimed "any FDCPA or related lawsuits filed in the past by this plaintiff have no bearing on
whether the letter sent by [the collector] violated the FDCPA" and are not discoverable. Lee v.
Robins Preston Beckett Taylor & Gugle Co., L.P.A., C2-97-1204, 1999 U.S. Dist. LEXIS 12969
(S.D. Ohio July 9, 1999).

In determining the amount of statutory damages in an individual action the court is

to consider "the frequency and persistence of non-compliance by the debt collector, the nature of
such non-compliance, and the extent to which the non-compliance was intentional". 15 U.S.C.
§1692k(b)(1).
Some cases have held that "frequency and persistence of noncompliance" pertains
only to the debt collector's noncompliance with respect to the plaintiff. See, e.g., Powell v.
Computer Credit, Inc., 975 F.Supp. 1034, 1039 (S.D. Ohio 1997); Dewey v. Associated
Collectors, Inc., 927 F.Supp.1172, 1175 (W.D.Wisc. 1996). Other courts, in assessing statutory
damages, appear to have considered the debt collector's noncompliance as to other debtors. See,
e.g., Masuda v. Thomas Richards & Co., 759 F.Supp. 1456, 1459, 1467 (C.D.Cal. 1991); Riveria
v. MAB Collections, Inc., 682 F.Supp. 174, 179 (W.D.N.Y. 1988).

On the other hand, some courts consider that in an individual action the conduct
of the debt collector towards third persons is not relevant. Cusumano v. NRB, Inc., 96 C 6876,
1998 WL 673833, 1998 U.S.Dist. LEXIS 15418 (N.D.Ill. Sept. 23, 1998); Powell v. Computer
Credit, Inc., 975 F.Supp. 1034, 1039 (S.D.Ohio 1997); Dewey v. Associated Collectors, Inc., 927
F.Supp. 1172, 1175 (W.D. Wis. 1996); Byes v. Credit Bureau Enterps., Inc., 1995 U.S. Dist.
LEXIS 13559, Civ. A No. 95-239, 1995 WL 540234, at *1 (E.D. La. Sept. 11, 1995). This
appears to be wrong. The only justification was offered by the court in Dewey, which stated that

87
“number of persons adversely affected” would be superfluous if “frequency and persistence of
noncompliance” included violations committed with respect to others. The short answer is that
“number of persons adversely affected” refers to the number of persons affected by one violation,
whereas “frequency and persistence of noncompliance” refers to the overall track record of the
defendant.

One court has held that continued use of an unlawful letter after being placed on
notice of its illegality warrants the maximum. Cacace v. Lucas, 775 F. Supp. 502, 507 (D. Conn.
1990). Others hold that the factor requires a court to consider whether the defendant “has a
history of violating the Act.” Blum v. Lawent, 02 C 5596, 2003 WL 22078306 (N.D.Ill., Sept. 8,
2003). Accord, Evanauskas v. Strumpf, 300CV1106JCH, 2001 WL 777477 (D.Conn. June 27,
2001), *6; Yancey v. Hooten, 180 F.R.D. 203 (D.Conn. 1998); Miller v. McCalla, Raymer,
Padrick Cobb, Nichols & Clark, LLC, 198 F.R.D. 503, 506 (N.D.Ill. 2001) (“The noncompliance
here involved thousands of individual violations over several years”); Creighton v. Emporia
Credit Service, Inc., 981 F.Supp. 411, 417 (E.D.Va. 1997) (lack of other complaints in 19 years
collection agency was in operation is favorable factor). In King v. Int'l Data Servs., 01-00380
HG-LEK, 2002 U.S. Dist. LEXIS 26426 (D.Haw.), the court found that the fact that the debt
collector had sent out thousands of similar letters to other debtors was the "frequency" referred to
in the statute.

The Sixth Circuit, in Wright v. Finance Service of Norwalk, Inc., 22 F.3d 647 (6th
Cir. 1994) (en banc), the Fifth Circuit, in Peter v. GC Services, LP, 310 F.3d 344, 352 n. 5 (5th
Cir. 2002); and the Eleventh Circuit, in Harper v. Better Business Services, Inc., 961 F.2d 1561
(11th Cir. 1992), have held that up to $1,000 in statutory damages is available to one plaintiff in
one lawsuit. A majority of the district courts to have considered the issue have reached the same
conclusion. White v. Bruck, 927 F.Supp. 1168, 1169 (W.D.Wisc. 1996); Barber v. National
Revenue Corp., 932 F. Supp. 1153, 1156 (W.D.Wisc. 1996); Dewey v. Associated Collectors,
Inc., 927 F.Supp.1172 (W.D.Wisc., 1996); Teng v. Metropolitan Retail Recovery, Inc., 851
F.Supp. 61, 69 (E.D.N.Y. 1994); Hutchinson v. Russian, 92-2225-L, 1992 U.S. Dist. LEXIS
18891 (D. Kan. Oct. 29, 1992); Donahue v. NFS, Inc., 781 F.Supp. 188, 191 (W.D.N.Y. 1991);
Ganske v. Checkrite, Ltd., 96-C-0541-S, 96-C-0743-S, 1997 U.S.Dist. LEXIS 4345 (W.D.Wisc.,
Jan. 6, 1997); Beattie v. D.M. Collections, Inc., 764 F.Supp. 925, 928 (D.Del. 1991); Harvey v.
United Adjusters, 509 F.Supp. 1218, 1222 (D.Ore. 1981); Raimondi v. McAllister & Assocs., 50
F.Supp. 2d 825, 828 (N.D. Ill. 1999); Sibersky v. Borah, Goldstein, Altschuler & Schwartz, P.C.,
242 F.Supp.2d 273, 277 (S.D.N.Y. 2002); Evanauskas v. Strumpf, 300CV1106JCH, 2001 WL
777477 (D.Conn. June 27, 2001); In re Hart, 246 B.R. 709, 732 (Bankr. D. Mass. 2000); Spencer
v. Hendersen-Webb, Inc., 81 F.Supp.2d 582, 594 (D.Md. 1999); Nielsen v. Dickerson, 98 C 5909,
1999 WL 350649 (N.D.Ill. May 20, 1999); Blum v. Lawent, 02 C 5596, 2003 WL 22078306
(N.D.Ill., Sept. 8, 2003).

However, since a separate FDCPA action could be filed for each communication
or other discrete act that violates the law, a substantial argument can be made that "action" means
"cause of action" in that sense. Kaschak v. Raritan Valley Collection Agency, 88-3763, 1989 WL
255498 (D.N.J. May 23, 1989); Rabideau v. Management Adjustment Bureau, 805 F.Supp. 1086,
1095 (W.D.N.Y. 1992); Owens v. Brachfeld, C07-4400, 2008 U.S.Dist. LEXIS 63701 (N.D.Cal.,
Aug. 20, 2008).

Nothing prevents a consumer from filing a separate FDCPA suit for each episode
that constitutes a violation of the FDCPA, at least with respect to episodes occurring after the
filing of an initial action. Goins v. JBC, 352 F.Supp.2d 262 (D.Conn. 2005) (“There is no
prohibition in the FDCPA against separate lawsuits for separate statutory violations by the same
defendant. Where, as here, the subsequent action is not duplicative and would not be barred

88
under the claim preclusion doctrine, plaintiff may avail herself of the serendipitiy of an additional
FDCPA violation by the same defendant subsequent to initiation of a prior lawsuit and thereby
avoid a per action damages limitation, as is undoubtedly plaintiff’s strategy here”)..

Moreover, each collection agency and individuals associated with it are liable for a
separate $1000 maximum award. Ganske v. Checkrite Ltd., 96-C-0541-S, 96-C-0743-S, 1997
U.S. Dist. LEXIS 4345 (W.D.Wis. 1997).

In Overcash v. United Abstract Group, Inc., 549 F. Supp. 2d 193 (N.D.N.Y 2008),
the court held:

In this case, each defendant violated the FDCPA on more than one occasion.
Additionally, although there is no evidence of intent, the nature of the defendants'
noncompliance is relatively egregious; United Abstract sold a debt which had
already been repaid, and American Credit attempted to recover in excess of $
41,000 on a debt originally worth only $ 1,353.15. Accordingly, in consideration
of the frequency and nature of the noncompliance, the court awards the full
amount of "additional damages" available under the statute: $ 1,000 per defendant.

At least one court has held that the FDCPA limits the total recovery of additional
damages to $ 1,000. See Dowling v. Kucker [*7] Kraus & Bruh, LLP, No. 99-cv-
11958, 2005 U.S. Dist. LEXIS 11000, 2005 WL 1337442, at *3 n 3 (S.D.N.Y. Jun.
6, 2005). By its terms, however, the statute does not impose such a limitation. The
statute provides, in part, that "any debt collector . . . is liable" for additional
damages not to exceed $ 1,000. 15 U.S.C. §1692k(a). In other words, the limitation
that the statute imposes is cast not in terms of the plaintiff's recovery, but in terms
of the defendant's liability. Thus, in the case of multiple defendants, each may be
liable for additional damages of up to $ 1,000. See Ganske v. Checkrite, Ltd., No.
96-cv-0541, 1997 U.S. Dist. LEXIS 4345, 1997 WL 33810208, at *5 (W.D. Wis.
Jan. 6, 1997). As a corollary to this, United Abstract and American Credit are not
jointly and severally liable for the full $ 2,000 in additional damages that the court
imposes; rather, each is individually liable for $ 1,000 in additional damages.

The statutory damages must be assessed by a jury if a party timely demands a jury
trial. Kobs v. Arrow Service Bureau, Inc., 134 F.3d 893 (7th Cir. 1998). Accord, Vera v. Trans-
Continental Credit & Collection Corp., 98 Civ. 1866, 1999 WL 292623, 1999 U.S. Dist. LEXIS
3464 (S.D.N.Y. May 10, 1999); Sibley v. Fulton DeKalb Collection Serv., 677 F.2d 830, 834
(11th Cir. 1982).
7. RELATIONSHIP TO STATE LAW CLAIMS

If a plaintiff has state law claims, he cannot recover the same elements of actual
damages under both the state law claim and the FDCPA. If punitive damages or injunctive relief
is available under state law, that can be awarded. Gervais v. O’Connell, Harris & Associates,
Inc., 297 F. Supp. 2d 435 (D.Conn. 2003); Spicer v. Lenahan, 2004 WL 3112554 (D. Conn. Sep
14, 2004); Chiverton v. Fed. Fin. Group, Inc., 399 F.Supp.2d 96 (D.Conn.2005).
8. VICARIOUS LIABILITY

A collection agency which employs an attorney who violates the FDCPA can be
held liable for his actions. Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507, 1516 (9th Cir.
1994); Martinez v. Albuquerque Collection Servs., 867 F. Supp. 1495, 1502 (D.N.M. 1994);

89
Kimber v. Federal Fin. Corp., 668 F. Supp. 1480, 1486 (M.D.Ala. 1987); Ditty v. Check Rite,
Ltd., 973 F.Supp. 1320 (D.Utah 1997); Jones v. Wolpoff & Abramson, L.L.P., 05-5774, 2006 U.S.
Dist. LEXIS 4031 (E.D.Pa., February 1, 2006). . See also Alger v. Ganick, O'Brien & Sarin, 35
F.Supp. 2d 148 (D. Mass. 1999); Farber v. NP Funding II L.P., CV-96-4322 (CPS), 1997 U.S.
Dist. LEXIS 21245, 1997 WL 913335 at *2-3 & n.4 (E.D.N.Y. Dec. 9, 1997).

A collection agency is liable for the FDCPA violations of its employees. West v.
Costen, 558 F. Supp. 564, 573 (W.D.Va. 1983). "[N]umerous courts utilize agency principles to
make a principal vicariously liable for the acts of his authorized or apparent agent under the
FDCPA". Alger v. Ganick, O'Brien & Sarin, 35 F.Supp. 2d 148, 153 (D.Mass. 1999); accord,
Pettit v. Retrieval Masters, 211 F.3d 1057, 1059 (7th Cir. 2000); Pollice v. National Tax Funding,
L.P., 225 F.3d 379, 404 (3d Cir. 2000) (“Although there is relatively little case law on the subject
of vicarious liability under the FDCPA, there are cases supporting the notion that an entity which
itself meets the definition of "debt collector" may be held vicariously liable for unlawful
collection activities carried out by another on its behalf. In Fox v. Citicorp Credit Services, Inc.,
15 F.3d 1507 (9th Cir. 1994), the court indicated that a company which had been asked to collect
a defaulted debt could be held vicariously liable for its attorney's conduct which was in violation
of the FDCPA. See id. at 1516. By contrast, in Wadlington, supra, the Court of Appeals for the
Sixth Circuit declined to impose vicarious liability on a company for the actions of its attorney; in
the court's view, vicarious liability could not be imposed because the company itself did not meet
the definition of "debt collector"); Flamm v. Sarner & Associates, 02-4302, 2002 WL 31618443
(E.D.Pa., Nov. 6, 2002); Piper v. Portnoff Law Associates, 274 F.Supp.2d 681, 689 (E.D.Pa.
2003); Havens-Tobias v. Eagle, 127 F.Supp.2d 889, 898 (S.D.Ohio 2001); Campion v. Credit
Bureau Services, CS-99-0199-EFS, 2000 WL 33255504 (E.D.Wash. Sept. 20, 2000); In re Hart,
246 B.R. 709, 731 (Bankr. D.Mass. 2000); Mizrahi v. Network Recovery Services, Inc., 98-CV-
4528, 1999 U.S. Dist. LEXIS 22145, 1999 WL 33127737 (E.D.N.Y. Nov. 5, 1999)("debt
collectors employing attorneys or other agents to carry out debt collection practices that violate
the FDCPA are vicariously liable for their agent's conduct."); Caron v. Charles E. Maxwell, P.C.,
48 F.Supp.2d 932, 935 (D.Ariz. 1999) (“courts have held that the client of an attorney working as
a "debt collector" as defined in § 1692a(6) of the FDCPA is only liable for his attorney's
violations if both the attorney and the client are debt collectors within the meaning of the
statute”); Randle v. GC Services, L.P., 25 F. Supp. 2d 849, 851 (N.D.Ill. 1998); Ditty v.
CheckRite, Limited, Inc., 973 F. Supp. 1320, 1333-1335 (D.Utah 1997) (“a debt collector may be
held vicariously liable under the Act for the conduct of its attorney. . . . DeLoney & Associates
acted as CheckRite's agent. That the law firm might also have been an independent contractor
does not relieve CheckRite of vicarious liability”); Farber v. NP Funding II L.P., CV-96-4322
(CPS), 1997 U.S. Dist. LEXIS 21245, 1997 WL 913335 *2-3 & n.4 (E.D.N.Y. Dec. 9, 1997);
Newman v. CheckRite California, Inc., 912 F. Supp. 1354, 1369-1372 (E.D.Cal. 1995); Taylor v.
CheckRite, Ltd, 627 F. Supp. 415, 416-417 (S.D. Ohio 1986); West v. Costen, 558 F. Supp. 564,
573 & n.2 (W.D.Va. 1983); Martinez v. Albuquerque Collection Servs., 867 F. Supp. 1495, 1502
(D.N.M. 1994) ("debt collectors employing attorneys or other agents to carry out debt collection
practices that violate the FDCPA are vicariously liable for their agent's conduct"); First Interstate
Bank of Fort Collins v. Soucie, 924 P.2d 1200, 1202 (Colo. Ct. App. 1996) (“Federal courts that
have considered the issue have held that the client of an attorney who is a 'debt collector,' as
defined in § 1692a(6), is vicariously liable for the attorney's misconduct if the client is itself a
debt collector as defined in the statute. Thus, vicarious liability under the FDCPA will be imposed
for an attorney's violations of the FDCPA if both the attorney and the client are debt collectors as
defined in § 1692a(6).”); Oei v. N. Star Capital Acquisitions, LLC, 486 F.Supp.2d 1089, 1095
(C.D. Cal.,2006) (“courts routinely hold debt collectors vicariously liable under the FDCPA for
the conduct of their attorneys in collecting debts on their behalf”).

In Newman v. Checkrite, 912 F.Supp. 1354 (E.D. Cal. 1995), the court stated:

90
 In this circuit, however, it is established that, under the FDCPA, a debt collector
may be found vicariously liable for the conduct of its attorney. See Fox v. Citicorp
Credit Servs., Inc., 15 F.3d 1507, 1516 (9th Cir. [**31] 1994); see also
Martinez v. Albuquerque Collection Servs., 867 F. Supp. 1495 (D.N.M. 1994); and
see 17 Am.Jur.2d Consumer Protection § 200 (1990). n19 The fact that an attorney
may act as an independent contractor does not require a different result. Under
general rules of agency, one who contracts to act on behalf of another and is
subject the other's control, may be both an agent and an independent contractor.
See Restatement of Agency Second §§ 2, 14N; Harby v. Saadeh, 816 F.2d 436,
439 (9th Cir. 1987). Accordingly, employers may be liable for the acts of
independent contractors when an agency relationship is demonstrated. See
Sugimoto v. Exportadora de Sal, S.A. de C.V., 19 F.3d 1309, 1311-12 (9th Cir.
1994), cert. denied, 130 L. Ed. 2d 496, 115 S. Ct. 581 (1994). It has generally been
said that an attorney is an agent even if employed for a single transaction and as an
independent contractor. See Restatement (Second) of Agency § 1.

However, a creditor which does not (i) bring itself within the proviso in §1692a(6)
imposing liability for using a third party name or (ii) violate §1692j is not vicariously liable for
the FDCPA violations of its debt collector, on the ground that with those two exceptions the
FDCPA manifests Congressional intent to exclude creditors from its scope. Wadlington v. Credit
Acceptance Corp., 76 F.3d 103, 108 (6th Cir. 1996); Caron v. Maxwell, 48 F.Supp. 2d 932
(D.Ariz. 1999); Claussen v. Chase Manhattan Visa, 87-4146, 1989 WL 87996, 1989 U.S.Dist.
LEXIS 9076 (D.Kan. July 26, 1989); First Interstate Bank of Fort Collins, N.A. v. Soucie, 924
P.2d 1200 (Colo.App. 1996).

Vicarious liability against creditors may be available under state collection

practices laws, such as the Illinois Collection Agency Act. 225 ILCS 425/1 et seq. In Sherman v.
Field Clinic, 74 Ill.App.3d 21, 392 N.E.2d 154 (1st Dist. 1979), the court held that a complaint
stated a claim on the theory that a medical clinic hired a collection agency which, in the course of
employment, committed a practice made unlawful under the Collection Agency Act.

General partners of a debt collector organized as a partnership are liable. Bartlett

v. Heibl, supra, 128 F.3d 497, 499 (7th Cir. 1997); Peter v. GC Services, LP, 310 F.3d 344, 353
(5th Cir. 2002); Pollice v. National Tax Funding, LP, 225 F.3d 379, 405 (3rd Cir. 2000); Randle v.
G.C. Services, LP, 25 F.Supp. 2d 849 (N.D.Ill. 1998), related proceedings, Roe v. Publishers
Clearing House, Inc., 39 F. Supp. 1099 (N.D. Ill. 1999), summ. judgment granted, Randle v. GC
Servs. L.P., 48 F.Supp. 2d 835 (N.D. Ill. 1999); Peters v. AT&T, 179 F.R.D. 564 (N.D.Ill. 1998).
Illinois law holds that a parent corporation that directly participates in the unlawful
act of its subsidiary is liable. Forsythe v. Clark USA, Inc., 224 Ill. 2d 274; 864 N.E.2d 227
(2007).

Direct involvement in wrong of another is not vicarious liability. Gionis v.

Javitch, Block & Rathbone, LLP, Nos. 06-3048 & 06-3171, 238 Fed. Appx. 24; 2007 U.S. App.
LEXIS 14054 (6th Cir., June 6, 2007), aff’g, Gionis v. Javitch, Block & Rathbone, 405 F. Supp.
2d 856 (S.D. Ohio, 2005): “One more hurdle remains in this matter: Javitch did not utter the
statement in the Affidavit; Erica Vick did. Javitch therefore contends that imputing Erica Vick's
words onto it would essentially amount to impermissible ‘vicarious liability.’ This is not so. Had
Vick independently made the threat to Gionis (with no assistance from Javitch), the imposition of
liability on Javitch for Vick's threatening words could be classified as ‘vicarious liability.’ See
Restatement (Third) of Torts § 13 (2000). But Javitch did not passively stand by as Vick made the
threat. It instead chose to communicate the threatening language to Gionis--in a lawsuit no less.

91
And any consumer, especially the least sophisticated one, could view the very act of doing so as
an adoption of Vick's threat--and thus a ‘threat’ within itself. Cf. United States v. Cox, 957 F.2d
264, 266 (6th Cir. 1992) ("A threat is . . . an appearance to the victim.") (internal quotation marks
omitted). This is all the more true in Ohio given that Ohio's Civil Procedure Rule 10(C) provides
that "[a] copy of any written instrument attached to a pleading is part of the pleading for all
purposes." Ohio Civ. P. R. 10(C) (emphasis added). Hence, to hold Javitch liable for its own
actions does not invoke vicarious liability.”
9. ATTORNEY'S FEES

The successful consumer is entitled to an award of costs and reasonable attorney's

fees. 15 U.S.C. §1692k(a)(3).

Given the structure of the section, attorney's fees should not be construed as a
special or discretionary remedy; rather the Act mandates an award of attorney's
fees as a means of fulfilling Congress's intent that the Act should be enforced by
debtors acting as private attorneys general.

Graziano v Harrison, supra, 950 F.2d at 113.

The proper rate at which an attorney bringing an FDCPA case is to be

compensated is the rate which his or her services command in the marketplace, as established by
billings or awards in other cases, and it is not proper to have a special reduced rate in FDCPA
cases because of the nature of the case or the $1,000 limitation on actual damages. Tolentino v.
Friedman, 46 F.3d 645 (7th Cir. 1995).

Fee awards may exceed the damages. Silver v. Law Offices Howard Lee Schiff,
P.C, Civil No. 3:09cv 912 (PCD) (D. Conn. Dec. 16, 2010) ( $26,962 fees and costs on $1,001
statutory recovery); Ellis v. Solomon & Solomon P.C., Civil No. 3:05CV1623, 2009 U.S. Dist.
LEXIS 96785 (D. Conn. Oct. 20, 2009) ($36,000 fees and costs on $1,000 statutory recovery);
Carter v. Reiner, Reiner & Bendett, P.C., Civil No. 3:06CV988 (AWT) (D. Conn. Aug. 28, 2008)
($34,000 in fees and costs on $1,000 statutory recovery); Goray v. Unifund CCR Partners, Civ.
No. 06-00214 HG-LEK (D. Hawaii June 13, 2008) ($53,522.50 in fees and $2048.57 in costs on
$1000 statutory recovery); Register v. Reiner, Reiner & Bendett, P.C., Civil No. 3:06CV987
(JCH) (D. Conn. Oct. 19, 2007) ($37,000 in fees and costs on $1,000 statutory recovery);
Torgersen v. Arrow Fin. Servs., 2007 U.S. Dist. LEXIS 50156 * 11-12 (N.D. Ill. June 29, 2007)
($8,427.98 in fees and costs on $1,500 Offer of Judgment); McKinney v. Cadleway Props., Inc.,
04 C 8248, 2007 U.S. Dist. LEXIS 41588 * 2, 7 (N.D. Ill. June 8, 2007), affd McKinney v.
Cadleway Props., Inc., 2007 U.S. Dist. LEXIS 79786 (N.D. Ill. Oct. 23, 2007) (affirming
$40,595.50 in attorneys' fees and costs of $ 1,192.62 on a $1,000 judgment for statutory
damages), revd on other grounds, 548 F.3d 496 (7th Cir. 2008) (reversing summary judgment
entered in favor of the plaintiff); Nelson v. Select Fin. Servs., Inc., 05-3473, 2006 U.S. Dist.
LEXIS 42637 *4 (E.D. Pa. 2006) ($24,600 in fees on $1,000 statutory recovery); Gradisher v.
Check Enforcement Unit, Case No. 1:00-CV-401, 2003 U.S. Dist. LEXIS 753, * 1, 29, 2003 WL
187416 (W.D. Mich. Jan. 22, 2003) ($69,872.00 in attorneys fees and $7,808.44 in costs on
$1,000 statutory damages); Armstrong v. The Rose Law Firm, P.A., Civil No. 00-2287
(MJD/SRN), 2002 U.S. Dist. LEXIS 16867, 2002 WL 31050583 (D. Minn. Sept. 4, 2002)
($43,180.00 in attorneys fees on recovery of $1,000.00 statutory damages); In re Martinez, 266
B.R. 523, 544 (Bankr. S.D. Fla. 2001), aff'd 271 B.R. 696 (S.D. Fla. 2001) (affirming bankruptcy
court's award of attorney's fees of $29,037.50 on recovery of $1,000 statutory damages); and
Perez v. Perkiss, 742 F. Supp. 883 (D. Del. 1990) (the district court awarded $10,110 in attorneys
fees where the plaintiff's recovery was $1,200).

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 The provision in §1692k that “On a finding by the court that an action under this
section was brought in bad faith and for the purpose of harassment, the court may award to the
defendant attorney's fees reasonable in relation to the work expended and costs” is not a basis for
a counterclaim; the relief must be sought by motion. Rodriguez v. Portfolio Recovery Associates,
LLC, 841 F. Supp. 2d 1208 (W.D.Wash. 2012); Kropf v. TCA, Inc., 752 F. Supp. 2d 797 (E.D.
Mich. 2010) ("the Fair Debt Collection Practices Act does not create an independent cause of
action for attorney's fees"); Perry v. Stewart Title Co., 756 F. 2d 1197, 1211 (5th Cir. 1985) ("[t]o
recover attorney's fees under the FDCPA, the prevailing defendant must show affirmatively that
the plaintiff brought the FDCPA claim in bad faith and for the purpose of harassment"); Hardin
v. Folger, 704 F.Supp. 355, 356-57 (W.D.N.Y.1988) (dismissing the counterclaim because
section 1692k(a)(3) "provides relief, but not a claim, to defendants"); Kirscher v. Messerli &
Kramer, P.A., No. 05-1901 (PAM/RLE), 2006 U.S. Dist. LEXIS 3346, 2006 WL 145162 at *7
(D. Minn. Jan. 14, 2006) (dismissing the defendant's counterclaim, but permitting it to request
attorney's fees by a separate motion filed at a later stage in the proceedings); Young v. Reuben,
No. 04-0113, 2005 WL 1484671 at *1-2 (S.D. Ind. June 21, 2005) (same); Allen v. Scott, No.
3:10-CV-02005-F, 2011 U.S. Dist. LEXIS 8350, 2011 WL 219568 at *2 (N.D. Tex. Jan. 19,
2011) (noting that the "conclusion that § 1692k does not permit a bad faith counterclaim is
consistent with the majority of decisions reached by other courts"); Allers-Petrus v. Columbia
Recovery Group, LLC, C08-5533 FDB, 2009 U.S. Dist. LEXIS 41151, 2009 WL 1160061 at *1
(W.D. Wash. Apr. 29, 2009) ("if a plaintiff brings an FDCPA action and loses, subsection
1692k(a)(3) permits the court to award attorney's fees and costs to the defendant"). Contra:
Hylkema v. Palisades Collection, LLC, C07-1679RSL, 2008 U.S. Dist. LEXIS 21241, 2008 WL
623469 (W.D. Wash. Mar. 4, 2008); Ayres v. Nat'l Credit Mgmt. Corp., Civ. A. No. 90-5535,
1991 U.S. Dist. LEXIS 5629, 1991 WL 66845, at *5 (E.D. Pa. Apr. 25, 1991).
10. PERSONAL JURISDICTION

Most courts have held that FDCPA litigation is appropriately filed within the
district where the consumer received the communication. Pelaez v. MCT Group, Inc., 2:1-
cv00733-KJD-LRL, 2011 U.S.Dist. LEXIS 13899 (D.Nev. Feb. 10, 2011); Brink v. First Credit
Resources, 57 F.Supp.2d 848 (D.Ariz. 1999); Pope v. Vogel, 97 C 1835, 1998 WL 111576, 1998
U.S. Dist. LEXIS 2868 (N.D. Ill. March 5, 1998); Flanagan v. World Wide Adjustment Bureau,
Inc., 6:95CV00776, 1996 U.S.Dist. LEXIS 8257 (M.D.N.C., May 3, 1996); Murphy v. Allen
County Claims & Adjustments, 550 F.Supp. 128 (S.D.Ohio 1982); Lachman v. Bank of Louisiana
in New Orleans, 510 F.Supp. 753, 758 (N.D.Ohio 1981); Russey v. Rankin, 837 F.Supp. 1103
(D.N.M. 1993); Sluys v. Hand, 831 F. Supp. 321, 325 (S.D.N.Y. 1993); Fava v. RRI, Inc. , 96 CV
629, 1997 WL 205336, 1997 U.S. Dist. LEXIS 5630 (N.D.N.Y. April 24, 1997); Brujis v. Shaw,
876 F. Supp. 975 (N.D.Ill. 1995); Bailey v. Clegg, Brush & Assocs., Inc., 1991 WL 143361
(N.D.Ga. 1991); Stone v. Talan & Ktsanes, 91-244-FR, 1991 WL 134364, 1991 U.S. Dist. LEXIS
9632 (D.Ore. July 2, 1998), later opinion 1991 WL 226939, 1991 U.S. Dist. LEXIS 15599 (D. Or.
Oct. 15, 1991); Paradise v. Robinson & Hoover, 883 F. Supp. 521 (D.Nev. 1995); Hyman v. Hill
& Associates, 05 C 6486, 2006 U.S. Dist. LEXIS 5496 (N.D.Ill., February 9, 2006); Vlasak v.
Rapid Collection Systems, Inc., 962 F. Supp. 1096, 1102 (N.D. Ill. 1997) ("When an individual
receives calls or letters from a distant collection agency--and when those calls or letters are
allegedly illegal under the FDCPA--it makes sense to permit the individual to file suit where he
receives the communications."); Norton v. Local Loan, 251 N.W.2d 520 (Iowa 1977) (a
telephone call from the defendant's agent in Nebraska to the plaintiff in Iowa constituted "conduct
in [the] state" sufficient for Iowa to exercise personal jurisdiction over the defendant). There is
one case to the contrary: Krambeer v. Eisenberg, 923 F.Supp. 1170 (D.Minn. 1996).

The existence of jurisdiction and venue in the district where the communication
was received is supported by Felland v. Clifton, No. 11-1839, 2012 U.S. App. LEXIS 11380 (7th

93
Cir., June 6, 2012), where the court held that a consumer who received a fraudulent
misrepresentation in Wisconsin from an Arizona land developer could sue in Wisconsin. The
complaint alleges that repeated communications to plaintiffs’ Wisconsin home were part of a
deliberate attempt to create a false sense of security and to induce plaintiffs to make payments.
The communications are critical to the claim of intentional misrepresentation. Defendant was
aware that the harm would be felt in Wisconsin. The allegations are sufficient to establish
minimum contacts necessary to satisfy due-process requirements for jurisdiction in Wisconsin.

In Vlasak v. Rapid Collection Systems, Inc., 962 F. Supp. 1096 (N.D. Ill. 1997), the
defendant Arizona collection agency ("Rapid') challenged personal jurisdiction in Illinois because
it had no offices there, did not solicit or conduct business there and, in its five year history,
alleged it made "only two 'contacts' with Illinois in relation to its debt collection activities."
Vlasak at 1097. In rejecting Rapid's position, the court in Vlasak explained: "Rapid clearly
committed a 'tortious act' as defined by the long-arm statute." The court also explained that the
phrase "tortious act" under Illinois' long-arm statute "is not limited to acts which create common
law liability; instead, 'it encompasses any act that constitutes a breach of duty to another imposed
by law'" (citations omitted). Vlasak at 1100. The court concluded "a violation of the FDCPA
unquestionably constitutes a breach of a legal duty," noting that the FDCPA imposes a series of
behavioral obligations on debt collectors, "and collectors who fail to comply with the provisions
of the Act [FDCPA] may be liable for damages and attorneys fees." Id., citing Bailey v. Clegg,
Brush &Assocs., Inc., No. 90 CV 2702,1991 WL 143461 at 2 (N.D. Ga. 1991)(finding that
alleged violations of the FDCPA "are analogous to the commission of a tortious act" under the
Georgia long-arm statute.) Applying the International Shoe analysis, the court in Vlasak also
noted "based on its [debt collection] phone calls and letters to Vlasak, Rapid had fair warning that
it might be called before an Illinois court." Vlasak at 1101. The court explained "the main factor
in the minimum contacts inquiry is not physical presence in the forum state but rather
'foreseeability'" ld., at 1102. Thus, "Rapid obviously had a very clear purpose in mind when it
communicated with Vlasak in Illinois: to collect a debt on behalf of one of its clients." Id.

More recently, a California debt collection lawyer challenged personal jurisdiction

in Ohio because "he has never been to Ohio and maintains no contacts with the state, business
related or otherwise." Vlach v. Yaple, 670 F.Supp.2d 644,646 (N.D. Ohio 2009). Therein, the
consumer alleged that Yaple engaged in debt collection communications with her in Ohio that
violated the FDCPA as well as the Ohio Consumer Sales Practices Act ("OCSPA"). Citing Vlasak
and other cases, the court found that Yaple [who sent three written communications that allegedly
violated the FDCPA and the OCSPA] "should have reasonably expected that the recipient would
have been injured in this state, given that the letter was addressed to an Ohio resident" (citations
omitted). Vlach at 648.

The rulings of Vlasak and Vlach are supported by many other cases involving
venue and jurisdictional challenges in debt collection cases filed in consumer's home states. See,
i.e., Sluys v. Hand, 831 F. Supp. 321,324 (S.D.N.Y. 1993) (suits over alleged unlawful debt
collection communications will be brought where the consumer receives the communication;
«[o]therwise, one could invoke the protection of distance and send violative letters with relative
impunity, at least so far as less well-funded parties are concerned."); Bates v. C & S Adjusters,
Inc., 980 F.2d 865, 868 (2d Cir. 1992)(noting the harm does not occur until receipt of the
collection notice, the court concluded that receipt of a collection notice "is a substantial part of
the events giving rise to a claim under the Fair Debt Collection Practices Act."); Murphy v. Allen
County Claims & Adjustments, Inc., 550 F. Supp. 128, 132 (S.D. Oh. 1982)(venue and
jurisdiction for a claim involving alleged unlawful debt collection communications are in the
place where the telephone calls were received, and thus the place where the harm occurred, and

94
not the place where the calls were initiated as alleged by a nonresident collection agency).

The jurisdictional principles enunciated by the foregoing cases were not limited to
written communications; rather, they apply to telephone calls, repossessions, or other tortious
conduct that allegedly violates the FDCPA or state debt collection laws. Many courts have held
that a single contact, even a single telephone call made to collect an alleged debt, provides
sufficient contact for due process purposes to invoke the jurisdiction of the court in the state
where the communication was received. In Hyman v. Hill & Associates, 2006 WL 328260
(N.D.III), the court found venue and jurisdiction proper for a nonresident debt collection agency
that had made "more than one call to Illinois," noting "a single telephone call or letter directed by
a defendant debt collector to a plaintiff debtor's home state may support venue in that state in an
FDCPA action" citing several other cases discussed herein above. Similarly, in Brooks v.
Holmes. Rich & Sigler. P.C., 1998 WL 704023 (N.D.III.), the court found venue to lie based on a
single act directed by the nonresident collection agency to the consumer's state of residence; when
an individual receives allegedly unlawful calls or letters from a distant collection agency "it
makes sense to permit the individual to file suit where he receives the communications." See also
Norton v. Local Loan, 251 N.W.2d 520 (Iowa 1977) (a single allegedly unlawful debt collection
call from another state into Iowa constitutes "conduct in this state" for due process purposes; the
maker of such a telephone call assumes the burdens of Iowa law); Heritage House Restaurants v.
Continental Funding Group. Inc., 906 F.2d 276, 281 n. 6 (7th Cir. 1990) (a single transaction
which gives rise to the cause of action amounts to purposeful availment of the privilege of
conducting activities within the forum state; physical presence of a nonresident defendant when
the transaction is not necessary to obtain jurisdiction); Paradise v. Robinson and Hoover, 883 F.
Supp. 521,526 (D. Nev. 1995) (in a challenge to jurisdiction over an alleged unlawful debt
collection communication the court noted 'it is well-settled that a single contact with the forum
state, not involving the physical presence of the defendant, can be a sufficient basis upon which to
establish jurisdiction over the defendant").

The court in Paradise explained the important distinction between telephone calls
and letters made for other purposes and alleged unlawful communications:

This is not a case where the communication involved is merely a means of

conducting some other primary business within the forum. Here, the Robinson
Defendants' 'communications in the forum state ... are the precise subject matter of
this action pursuant to the FDCPA.' Paradise at 526 (citations omitted) (emphasis
added).
See Myers v. Bennett Law Offices, 238 F.3d 1068 (9th Cir 2001)(good personal jurisdiction
analysis in FCRA case); Silva v. Jason Head, PLC, 2010 WL 4593704, at *2-3 (N.D. Cal. Nov. 4,
2010) (a debt collection voicemail is an affirmative act conferring jurisdiction); Maloon v.
Schwartz Zweben & Slingbaum, 399 F. Supp. 2d 1108 (D. Haw. 2005).
11. CLASS ACTIONS

The FDCPA contains special damage provisions for class actions. 15 U.S.C.
§1692k. Recovery of statutory damages for the class is limited to 1% of the debt collector's net
worth or $500,000, whichever is less. The named plaintiffs, however, can collect their full
statutory damages. The damage limitation does not apply to actual damages.

“Net worth" means accounting book value. Sanders v. Jackson, 209 F.3d 998 (7th
Cir. 2000).

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 FDCPA actions based on improper form letters or charges, or similar standard
practices, are ideally suited for class action treatment. Under the objective "least sophisticated
consumer" or "unsophisticated consumer" standard of liability, an FDCPA claim for statutory
damages presents no issues of reliance or causation. "The question is not whether the plaintiffs
were deceived or misled, but rather whether an unsophisticated consumer would have been
misled." Beattie v. D.M. Collections, Inc., 754 F.Supp. 383, 392 (D.Del. 1991); see also,
Stewart v. Slaughter, 165 F.R.D. 696 (M.D.Ga. 1996). An FDCPA class action alleging
unauthorized charges may technically require proof of causation, but the payment of the
unauthorized amount establishes causation.

Class actions have been certified under the FDCPA in cases involving:

a. Phony attorney letters, Avila v. Rubin, supra; Stewart v. Slaughter,

165 F.R.D. 696 (M.D.Ga. 1996);

b. "Flat-rating", Arellano v. Etan Industries, Inc., supra, 97 C 8512,

1998 U.S. Dist. LEXIS 11352 (N.D. Ill., July 16, 1998); Davis v.
Suran, 98 C 656, 1998 WL 474105, 1998 U.S. Dist. LEXIS 12233
(N.D.Ill. Aug. 3, 1998);

c. Unauthorized charges, West v. Costen, 558 F.Supp. 564 (W.D.Va.

1983); Duran v. Credit Bureau of Yuma, Inc., 93 F.R.D. 607
(D.Ariz. 1982); Keele v. Wexler, 95 C 3483, 1996 U.S. Dist. LEXIS
3253, 1996 WL 124452, *6 (N.D.Ill. 1996), aff'd, 149 F.3d 589 (7th
Cir. 1998); Ditty v. CheckRite, Ltd., 182 F.R.D. 639 (D. Utah,
1998), later opinion, 2:95-CV-430C, 1998 U.S.Dist. LEXIS 12940
(D.Utah, Aug. 13, 1998); Pikes v Riddle, 38 F.Supp. 2d 639
(N.D.Ill. 1998); Francisco v. Doctors & Merchants Credit Service,
Inc., 98 C 716, 1998 WL 474107, 1998 U.S. Dist. LEXIS 12234
(N.D. Ill., July 29, 1998); Cheqnet Systems, Inc. v. Montgomery,
322 Ark. 742, 911 S.W.2d 956 (1995) (class certified in FDCPA
action challenging bad check charges).

d. Improper form letters, West v. Costen, 558 F.Supp. 564, 572-573

(W.D.Va. 1983) (FDCPA class certified regarding alleged failure to
provide required "validation" notices); Brewer v. Friedman, 152
F.R.D. 142 (N.D.Ill. 1993) (FDCPA class certified regarding
transmission of misleading collection demands to consumers),
earlier opinion, 833 F.Supp. 697 (N.D.Ill. 1993); Vaughn v. CSC
Credit Services, 93 C 4151, 1994 WL 449247, 1994 U.S. Dist.
LEXIS 2172, *24 (N.D. Ill. March 1, 1994) (Magistrate Judge's
opinion), adopted, 1995 WL 51402, 1995 U.S. Dist. LEXIS 1358
(N.D. Ill. Feb. 3, 1995); Beasley v. Blatt, 93 C 4987, 1994 WL
362185, 1994 U.S.Dist. LEXIS 9383 (N.D.Ill., July 11, 1994)
(letters threatening action which was not intended to be taken and
could not legally be taken); Carr v. Trans Union Corp., 94-22, 1995
WL 20865, 1995 U.S. Dist. LEXIS 567 (E.D.Pa. Jan. 12, 1995);
Colbert v. Trans Union Corp., 93-6106, 1995 WL 20821, 1995 U.S.
Dist. LEXIS 578 (E.D.Pa. Jan. 12, 1995); Villareal v. Snow, 95 C
2484, 1996 WL 28254, 1996 WL 28282, 1996 U.S. Dist. LEXIS
667, *6 (N.D.Ill. Jan. 19, 1996); Peters v. AT&T Corp., 179 F.R.D.
564 (N.D. Ill. 1998); Arango v. GC Services LP, 97 C 7912, 1998

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 WL 325257, 1998 U.S. Dist. LEXIS 9124 (N.D.Ill. June 11, 1998);
Arellano v. Etan Industries, Inc., 97 C 8512, 1998 WL 417599,
1998 U.S. Dist. LEXIS 11352 (N.D. Ill., July 20, 1998); Wells v.
McDonough, 97 C 3288, 1998 WL 160876, 1998 U.S. Dist. LEXIS
4441 (N.D. Ill., March 31, 1998); Miller v. Wexler & Wexler, 97 C
6593, 1998 WL 60798, 1998 U.S. Dist. LEXIS 1382 (N.D. Ill.,
Feb. 6, 1998); Shaver v. Trauner, 97-1309,1998 U.S. Dist. LEXIS
19648 (C.D. Ill., July 31, 1998); Wilborn v Dun & Bradstreet, 180
F.R.D. 347 (N.D.Ill. 1998).

e. Filing of suits in improper venues, Zanni v. Lippold, 119 F.R.D.

32, 35 (C.D.Ill. 1988); Holloway v. Pekay, 94 C 3418, 1995 U.S.
Dist. LEXIS 18331, 1995 WL 736925 (N.D.Ill. 1995).

f. The class may be defined in any manner that results in a cohesive

group of claimants with similar characteristics. In Mace v. Van Ru
Credit Corp., 109 F.3d 338 (7th Cir., 1997). the Seventh Circuit
rejected the notion that the court is obligated to define the class as
broadly as possible:

[O]ur only task on appeal is to determine whether the

FDCPA authorizes statewide (in contrast to nation-wide)
class actions. We note first that we know of no authority
requiring the participation of the broadest possible class. On
the contrary, the class requirements found in the Federal
Rules of Civil Procedure encourage rather specific and
limited classes. Fed. R. Civ. P. 23. The typicality and
commonality requirements of the Federal Rules ensure that
only those plaintiffs or defendants who can advance the
same factual and legal arguments may be grouped together
as a class. * * *

The defendants, however, advance a policy argument, from

which the district court constructed a requirement for a
nation-wide class. The district court reasoned that, if the
damage cap of $ 500,000 can be applied anew to a series of
state-wide (or otherwise limited) class actions, the damage
limitation would become meaningless. This contention may
be correct as far as it goes, although there is, of course, no
way of telling whether such repeated class actions are
possible or likely, here or generally. The other side of the
coin is that to require a nation-wide class as the district court
did here brings with it other problems that will be discussed
later. There are other possible problems with the district
court's reasoning. The FDCPA has a short, one-year statute
of limitations making multiple lawsuits more difficult.
Further, if a debt collector is sued in one state, but continues
to violate the statute in another, it ought to be possible to
challenge such continuing violations. Given the uncertainty
of those policy considerations, there is no compelling reason
to ignore the plain words of the statute. In any event, the
case before us does not now present multiple or serial class

97
 actions to recover for the same misconduct. Hence, it would
be premature to require a nation-wide class at this juncture.
If and when multiple serial class actions are presented, it
will be time enough to rule on such a pattern. At this point,
there is no persuasive reason to require a nation-wide class.

In a class action alleging that unauthorized charges were demanded, a plaintiff

who did not pay the charge may represent a class consisting of both people that did pay and
people that did not pay. Keele v. Wexler, 149 F.3d 589 (7th Cir. 1998).
XXXI. DEFENSES

1. BONA FIDE ERROR DEFENSE

The FDCPA does provide an affirmative defense to debt collectors:

A debt collector may not be held liable in any action brought under this title if
the debt collector shows by a preponderance of the evidence that the violation
was not intentional and resulted from a bona fide error notwithstanding the
maintenance of procedures reasonably adapted to avoid any such error.

15 U.S.C. §1692k(c). The provision is somewhat similar, but not identical, to one found in the
Truth in Lending Act. 15 U.S.C. §1640.

The United States Supreme Court has held that errors as to one’s obligations under
the FDCPA are not protected by the bona fide error provision. Jerman v. Carlisle, McNellie,
Rini, Kramer & Ulrich LPA, 559 U.S. 573, 176 L.Ed.2d 519, 130 S.Ct. 1605 (2010). Although
the case dealt with an error in construing the FDCPA, its logic would lead to the same
conclusion regardless of whether the error is one of construing the FDCPA, another federal
statute, or state law.

A majority of lower courts hold that the defense is limited to clerical errors and
cannot protect against mistakes of law. Picht v. Jon R. Hawks, Ltd., 236 F.3d 446, 451 (8th
Cir.2001) (stating that bona fide error defense does not apply to mistakes of law); Hulshizer v.
Global Credit Servs., Inc., 728 F.2d 1037, 1038 (8th Cir.1984) (per curiam); Pipiles v. Credit
Bureau of Lockport, Inc., 886 F.2d 22, 27 (2d Cir.1989) (same); Baker v. G.C. Servs. Corp., 677
F.2d 775, 779 (9th Cir.1982) (mistake of law "insufficient by itself to support the bona fide error
defense"); Hartman v. Meridian Fin. Servs., Inc., 191 F.Supp.2d 1031, 1045-46 (W.D.Wis.2002)
(does not apply to mistakes of law and generally is limited to clerical mistakes); Arroyo v.
Solomon & Solomon, P.C., No. 99-CV- 8302, 2001 WL 984940, at *6 (E.D.N.Y. July 19, 2001),
amended and superseded by 2001 WL 1590520 (E.D.N.Y. Nov. 16, 2001) (does not apply to
mistakes of law, and collecting cases); Wilkerson v. Bowman, 200 F.R.D. 605, 608-09
(N.D.Ill.2001) (does not apply to mistaken view of the obligations imposed by the FDCPA);
Edwards v. McCormick, 136 F.Supp.2d 795, 800 (S.D.Ohio 2001) (limited to clerical errors);
Spencer v. Hendersen- Webb, Inc., 81 F.Supp.2d 582, 591 (D.Md.1999) (does not apply to
mistakes of law and generally is limited to clerical mistakes); Booth v. Collection Experts, Inc.,
969 F.Supp. 1161, 1165 (E.D.Wis.1997) (same).

If the bona fide error defense has any application to a mistake of law, an opinion of
competent counsel or a regulatory agency should be required. Seeger v. AFNI, Inc., 548 F.3d
1107, 1114 (7th Cir. 2008) ( “relied on an informed, but mistaken, legal opinion”). Where the
debt collector "failed to provide any evidence that it maintained proper procedures to avoid

98
error", the bona fide error defense was held not to be available. Carrigan v. Central Adjustment
Bureau, Inc., 494 F.Supp. 824, 827 (N.D.Ga. 1980); Oglesby v. Rotche, supra, 93 C 4183, 1993
U.S. Dist. LEXIS 15687, 1993 WL 460841 (N.D.Ill., Nov. 4, 1993). The mere assertion by a
defendant that it tries to comply with the law is not enough. Dechert v. Cadle Co., IP 01-880-
C(B/G), 2003 WL 23008969 (S.D.Ind. Sep. 11, 2003).
2. LIMITATIONS

The one-year statute of limitations begins to run when a collection letter is mailed
or an improper legal action is filed. Naas v. Stolman, 130 F.3d 892 (9th Cir. 1997); Maloy v.
Phillips, 64 F.3d 607, 608 (11th Cir. 1995); Mattson v. U.S. West Communications, 967 F.2d
259, 261 (8th Cir. 1992); Prade v. Jackson & Kelley, 941 F.Supp. 596, 599-600 (N.D. W. Va.
1996), aff'd mem. 135 F.3d 770 (4th Cir. 1998); Blakemore v. Pekay, 895 F.Supp. 972, 982-83
(N.D. Ill. 1995). The Eighth Circuit has held that the one year statutory limitation expires the day
before that anniversary date, Mattson v. U.S. West Communications, Inc., 967 F.2d 259 (8th Cir.
1992), but all other circuits are contrary. Johnson v. Riddle, 305 F.3d 1107 (10th Cir. 2002);
United Mine Workers v. Dole, 870 F.2d 662, 665 (D.C.Cir.1989); Frey, 748 F.2d at 175.

The one year is subject to tolling under appropriate circumstances. Kubiski v.

Unifund CCR Partners, 08 C 6421, 2009 U.S. Dist. LEXIS 26754 (N.D.Ill., March 25, 2009).

In the case of FDCPA claims based on violations in connection with the filing of
legal actions, the statute runs from the filing of suit, subject to tolling if through the delay of
service, “sewer service” or the like the debtor does not learn of the violation in time to bring suit
within one year. Serna v.Law Office of Joseph Onwuteaka, PC, No. H-11-CV-3034 (S.D. Tex.
June 19, 2012). The statute should not be routinely treated as running one year from the date of
service, e.g., if it is served within a month or two of filing.

Decisions applying the FDCPA limitations period generally hold that, depending
on the relationship between the acts, the plaintiff can either recover for an entire course of
improper collection conduct continuing within a year prior to filing or for the acts committed
during the year prior to filing. Joseph v. J. J. MacIntyre Cos., L.L.C., 281 F.Supp.2d 1156
(N.D.Cal. 2003); Arvie v. Dodeka, LLC, H-09-1076, 2010 WL 4312907 (S.D.Tex., Oct. 25,
2010).

The Sixth Circuit holds that where there is a series of FDCPA violations in the
course of collecting a single debt, beginning before the one-year limitations period and continuing
into it, the consumer may recover for those violations within the one-year period. Purnell v.
Arrow Financial Services, LLC, 303 Fed. Appx. 297 (6th Cir. 2008) (where the debt collector was
asked to validate a debt prior to the one-year period, but failed to do so and continued collection
activity, the consumer could recover for whatever collection activity occurred within the one
year).

In Langendorfer v. Kaufman, 1:10cv797, 2011 WL 3682775, *3-4 (S.D.Ohio, Aug. 23,

2011), a court within the Sixth Circuit applied Purnell to hold that a violation of 15 U.S.C.
§1692i, prohibiting legal action to collect a debt in a venue other than that where the consumer
resides or signed the contract sued upon, continues as long as the collection litigation is being
prosecuted, because “being forced to defend a collection action in a different venue is the very
wrong that the statute intends to prevent and address.” Accord, Kline v. Mortgage Electronic,
659 F.Supp.2d 940, 951-52 (S.D.Ohio 2009); Solomon v. HSBC Mtge. Corp., 395 Fed.Appx. 494,
497-8 (10th Cir. 2010) (court agrees that “the entire amended complaint should not have been
dismissed simply because one allegedly wrongful act occurred outside of the limitation period”).

99
 The court took the same approach in Blakemore v. Pekay, 895 F. Supp. 972, 982-
83 (N.D.Ill. 1995) (Coar, J.), holding that where a collection lawsuit was filed in the wrong
county more than one year previously, but postjudgment wage deductions occurred within one
year, FDCPA claims based on conducting the wage deduction proceedings in the wrong county
were timely. The consumer is harmed by the post-judgment collection proceedings in the wrong
venue (the consumer may be compelled to appear, and is hampered by the distant forum in
asserting any claim of exemption or other objection), and the wrong can be stopped at any time
by the debt collector transferring the collection proceedings to the correct venue.

In Hockenhull v. Law Office of Howard Lee Schiff, PC, C.A. No. 12-415 S, 2012
WL 6525504 (D.R.I., December 13, 2012), the court held:

While this Court has not yet addressed the issue of how the one year statute of
limitations applies when some of the conduct occurred within the limitations
period and some occurred outside of it, the courts that have considered the issue
have found the continuous violation doctrine applicable and the action timely. See,
e.g., Devlin v. Law Offices Howard Lee Schiff, P.C., Civil Action No. 11-11902-
JGD, 2012 WL 4469139, at *7 (D. Mass. Sept. 25, 2012) (citing cases). As the
Northern District of California put it:

The key is whether the conduct complained of constitutes a continuing

pattern and course of conduct as opposed to unrelated discrete acts. If there
is a pattern, then the suit is timely if "the action is filed within one year of
the most recent date on which the defendant is alleged to have violated the
FDCPA."

Joseph v. J.J. Mac Intyre Cos., 281 F. Supp. 2d 1156, 1161 (N.D. Cal. 2003)
(quoting Padilla v. Payco Gen. Am. Credits, Inc., 161 F. Supp. 2d 264, 273
(S.D.N.Y. 2001)).

This Court agrees with the reasoning of its sister courts. The Complaint alleges
that Defendants repeatedly called and harassed Hockenhull from December 2010
through November 19, 2011. (Compl. ¶¶ 7-12.) This is a clear pattern of conduct
and not a group of unrelated, discrete acts. Thus the continuing violation doctrine
applies and the applicable date for statute of limitation purposes is the date of the
last phone call: November 19, 2011. The Complaint was filed on May 31, 2012,
well before the one year statute of limitations deadline of November 19, 2012.
Thus, all of Hockenhull's claims are timely.
3. ROOKER-FELDMAN DOCTRINE

In Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005), the
Supreme Court held: “The Rooker- Feldman doctrine, we hold today, is confined to cases of the
kind from which the doctrine acquired its name: cases brought by state-court losers complaining
of injuries caused by state-court judgments rendered before the district court proceedings
commenced and inviting district court review and rejection of those judgments.”

As narrowed by the Supreme Court in Exxon, the doctrine only applies where
someone against whom a judgment has been entered files a later action complaining of injury
“caused by [the] state court judgment.” “Under the Rooker-Feldman doctrine an individual is
precluded from petitioning the federal court only when they seek review of a state-court judgment
entered against them.” Chavez v. Bowman, Heintz, Boscia & Vician, 07 C 670, 2007 U.S.Dist.

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LEXIS 61936 (N.D.Ill., Aug. 22, 2007). Where an FDCPA violation is committed by a debt
collector in the course of collection litigation prior to judgment, the consumer may be barred from
recovering actual damages resulting from entry of the judgment, but can recover statutory
damages and any actual damages not caused by entry of the judgment. McCammon v. Bibler,
Newman & Reynolds, P.A., 06-2242, 2007 U.S.Dist. LEXIS 69352 (D.Kan. Sept. 18, 2007);
Foster v. D.B.S. Collection Agency, 463 F.Supp.2d 783, 798 (S.D.Ohio 2006); Kelly v. Wolpoff &
Abramson, L.L.P., 07cv00091, 2007 U.S. Dist. LEXIS 60528, *11-16 (D.Colo. Aug. 17, 2007);
Johnson v. CGR Services, Inc., 04 C 2587, 2005 U.S.Dist. LEXIS 7889 (N.D.Ill., April 7, 2005).

Decisions applying Rooker-Feldman as interpreted by Exxon to FDCPA claims

generally limit its application to claims for actual damages resulting from the issuance or
execution of a state court judgment.

In Todd v. Weltman, Weinberg & Reis, 434 F.3d 432 (6th Cir. 2006), an FDCPA
plaintiff complained that a debt collector had filed a false affidavit in a state court garnishment
proceeding. Rejecting the collector’s Rooker-Feldman argument, the Sixth Circuit held that
“This argument ignores the fact that Plaintiff here does not complain of injuries caused by this
state court [garnishment] judgment, as the plaintiffs did in Rooker and Feldman. Instead, after
the state court judgment, Plaintiff filed an independent federal claim that Plaintiff was injured by
Defendant when he filed a false affidavit. This situation was explicitly addressed by the Exxon
Mobil Court when it stated that even if the independent claim was inextricably linked to the state
court decision, preclusion law was the correct solution to challenge the federal claim, not Rooker-
Feldman.” (434 F.3d at 437) Accord, Foster v. D.B.S. Collection Agency, 463 F.Supp.2d 783,
798 (S.D.Ohio 2006); Kelly v. Wolpoff & Abramson, L.L.P., 07cv00091, 2007 U.S. Dist. LEXIS
60528, *11-16 (D.Colo. Aug. 17, 2007).

The Seventh Circuit anticipated Exxon in Long v. Shorebank Development Corp.,

182 F.3d 548 (7th Cir. 1999), where an FDCPA defendant had obtained a state court judgment
evicting plaintiff from her home. Plaintiff then filed a federal FDCPA action alleging that a
notice demanding payment of rent sent by defendant prior to the eviction judgment violated the
FDCPA. The court held that Rooker-Feldman did not bar the FDCPA claim, even though the
eviction order was for nonpayment of the rent demanded in the notice, because the FDCPA
violations were “independent and complete prior to the entry” of the state court judgment. 182
F.3d at 556.

The same principle is followed in Sides v. City of Champaign, 496 F.3d 820, 825
(7th Cir. 2007), a case involving a criminal conviction. The Court of Appeals recognized that
under Exxon “Arguments concerning events that precede the conviction – arguments that would
be equally strong (or weak) if Sides had been acquitted – likewise are outside the scope of the
Rooker-Feldman doctrine.”

Johnson v. CGR Services, Inc., 04 C 2587, 2005 U.S.Dist. LEXIS 7889 (N.D.Ill.,
April 7, 2005), is also closely in point. “Plaintiff’s FDCPA claims against CGR involve the
representations made in filings in the state court and other actions taken by CGR that were
allegedly false, deceptive, or misleading, but are not specifically predicated on the entry of the
money judgment.” (*12) The court held that the plaintiff could recover statutory damages for
such violations without running afoul of Rooker-Feldman, even though actual damages resulting
from enforcement of the judgment could not be recovered. The court specifically rejected
defendant’s argument that plaintiff “had a reasonable opportunity to present her claims” in the
state court, because that “is an exception to an otherwise appropriate application of the Doctrine.”
(*13-14)

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 4. CLAIM PRECLUSION

The Seventh Circuit has held that an Illinois state court default judgment on a debt
is not res judicata with respect to FDCPA claims for illegal collection activity. Whitaker v.
Ameritech Corp., 129 F.3d 952, 958 (7th Cir. 1997).

“[T]here are no compulsory counterclaims in Illinois.” Peregrine Fin. Group v.

Martinez, 305 Ill. App. 3d 571, 712 N.E.2d 861, 868 (1st Dist. 1999). “If . . . the defendant did not
interpose counterclaims in the earlier action, and was not required to do so, there is no bar from
raising them in a subsequent action.” Peregrine, 712 N.E.2d at 867.

Indeed, even in states which have compulsory counterclaim rules, state court debt
collection actions and federal FDCPA actions challenging pre-judgment collection conduct do not
“arise out of the same transaction or occurrence” and are not the same “cause of action.”
Peterson v. United Accounts, Inc., 638 F.2d 1134 (8th Cir. 1981); Leatherwood v. Universal
Business Service Co., 115 F.R.D. 48 (W.D.N.Y. 1987); Gutshall v. Bailey & Assoc., 90 C 20182,
1991 U.S.Dist. LEXIS 12153 (N.D.Ill. 1991); Venes v. Professional Service Bureau, Inc., 353
N.W.2d 671 (Minn. App. 1984); Hart v. Clayton-Parker & Assoc., 869 F. Supp. 774 (D.Ariz.
1994); Ayres v. National Credit Management Corp., 90-5535, 1991 U.S. Dist. LEXIS 5629, 1991
WL 66845, at *4 (E.D. Pa. April 25, 1991); Zhang v. Haven-Scott Assoc., Inc., 95-2126, 1996
WL 355344, 1996 U.S.Dist. LEXIS 8738 (E.D.Pa., June 21, 1996).

In Foster v. D.B.S. Collection Agency, 463 F.Supp.2d 783, 797 (S.D.Ohio 2006),
the court held that “All of the underlying debt collection cases were actions on account, which
addressed the class members’ alleged liability to repay certain debts. Plaintiffs’ federal court
claims, on the other hand, address the allegedly unlawful misrepresentations Defendants made
during the process of collecting such debts.” Even though the misrepresentations – which went
to the collector’s capacity to sue, whether the debts had been assigned to the collector, and similar
matters – could have given rise to defenses to the collection suits, the court held that unasserted
issues of that nature did not bar the FDCPA claims on a res judicata theory.

In Davis v. Unifund CCR Partners, 07-1767, 2007 U.S.Dist. LEXIS 44606, *7

(N.D.Cal., June 20, 2007), a consumer brought an FDCPA action alleging he had been sued on a
time-barred debt. The debt collector asserted that the consumer had been required to file the
FDCPA claim as a compulsory counterclaim in the state court action and was barred by res
judicata for failing to do so. The court rejected this contention: “Although the FDCPA and
Rosenthal Act [state FDCPA] claims are generally related to the subject matter of the state
collection action – plaintiff’s Citibank debt – the FDCPA and Rosenthal Act claims arise out of
a different set of facts related to defendant’s alleged unfair and illegal practices in their efforts to
collect on that debt. Other courts have agreed that collection claims and FDCPA claims do not
arise out of the same set of operative facts . . . .” A fortiori, the same result obtains in a state,
such as Illinois, which does not even have compulsory counterclaims.
5. ISSUE PRECLUSION

Illinois law is clear that “parties will not be collaterally estopped unless the
precise facts and issues were clearly determined in the prior judgment.” Nowak v. St. Rita High
School, 197 Ill. 2d 381, 390-91, 757 N.E.2d 471, 477-78 (2001). “The judgment in the first suit
operates as an estoppel only as to the point or question actually litigated and determined and not
as to other matters which might have been litigated and determined.” Id. “A judgment is
conclusive in a subsequent action between the same parties on any issue actually litigated and
determined if its determination was essential to that judgment.” S & S Automotive v. Checker

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Taxi Co., 166 Ill. App. 3d 6; 520 N.E.2d 929, 931 (1st Dist. 1988). “The party asserting the
doctrine of collateral estoppel bears the ‘heavy burden’ of demonstrating with clarity and
certainty what the prior judgment determined.” Peregrine, supra, 305 Ill.App.3d at 581, 712
N.E.2d at 868.

“[C]ollateral estoppel bars subsequent actions only as to the point or question

actually litigated and determined in the prior suit and not as to matters that might have been
litigated and determined.” FTC v. QT, Inc., 448 F.Supp.2d 908, 971 (N.D.Ill. 2006). Even where
the prior case is litigated, “The reviewing court has a duty to study the record to determine
whether the trier of fact in the prior adjudication could have based its decision, verdict or
judgment upon a matter other than that which the party asserting collateral estoppel attempts to
preclude from consideration in the subsequent action.” Peregrine, 305 Ill.App.3d at 581-82, 712
N.E.2d at 868.

Other courts have likewise held that FDCPA claims are not barred by state court
default judgments on debts. Foster v. D.B.S. Collection Agency, 463 F.Supp.2d 783, 796
(S.D.Ohio 2006) (“those default judgments do not satisfy the ‘actually litigated’ element of issue
preclusion”); Kelly v. Wolpoff & Abramson, L.L.P., 07cv00091, 2007 U.S. Dist. LEXIS 60528,
*22-24 (D.Colo. Aug. 17, 2007).

Also, the small size of a default judgment is material. Illinois law is clear that “the
doctrine of res judicata need not be applied where fundamental fairness so requires.” People v.
Somerville, 42 Ill. 2d 1, 4, 245 N.E.2d 461 (1969). It cannot be applied “unless it is clear that no
unfairness results to the party being estopped.” Talarico v. Dunlap, 177 Ill.2d 185, 685 N.E.2d
325, 328 (1997). Applying this principle, the Seventh Circuit has actually held that collateral
estoppel should not be applied where the Illinois state court decision is plainly wrong.
Sornberger v. City of Knoxville, 434 F.3d 1006, 1022 (7th Cir. 2006).

“Even where the threshold elements of the doctrine are satisfied and an identical
common issue is found to exist between a former and current lawsuit, collateral estoppel must not
be applied to preclude parties from presenting their claims or defenses unless it is clear that no
unfairness results to the party being estopped.” Talarico v. Dunlap, supra, 177 Ill. 2d 185, 192,
685 N.E.2d 325 (1997). The Supreme Court elaborated in that case:

In deciding whether the doctrine of collateral estoppel is applicable in a particular

situation, a court must balance the need to limit litigation against the right of a fair
adversary proceeding in which a party may fully present his case. 50 C.J.S.
Judgments § 779 (1997). In determining whether a party has had a full and fair
opportunity to litigate an issue in a prior action, those elements which comprise the
‘practical realities of litigation' must be examined. 47 Am. Jur. 2d Judgments §
651 (1995). In some circumstances the absence of an incentive to vigorously
litigate in the former proceeding is relevant in the application of collateral
estoppel. See Housing Authority for La Salle County v. Young Men's Christian
Ass'n, 101 Ill. 2d 246, 255, 461 N.E.2d 959 (1984); Restatement (Second) of
Judgments § 28(5)(c) (1982); see also 47 Am. Jur. 2d Judgments § 651 (1995).
There must have been the incentive and opportunity to litigate, so that a failure to
litigate the issue is in fact a concession on that issue. A. Vestal, Issue Preclusion
and Criminal Prosecutions, 65 Iowa L. Rev. 281, 288-89 (1980).

Incentive to litigate might be absent, for instance, where the amount at stake in the
first litigation was insignificant, or if the future litigation was not foreseeable. 47
Am. Jur. 2d Judgments § 651 (1995). In the context of prior criminal proceedings,

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 the seriousness of the allegations or the criminal charge at the prior hearing is a
factor to be considered. If the offense charged is of a minor or trivial nature,
defendant might not be sufficiently motivated to challenge the allegations made at
trial and, in such a case, it might be unfair to allow collateral estoppel to be
asserted later. However, even summary offenses, when they provide sufficient
incentive and opportunity for a defense, may be the basis of collateral estoppel in
a subsequent civil proceeding as, for instance, when they are part of another
important charge. 50 C.J.S. Judgments § 922 (1997). (Talarico v. Dunlap, 177 Ill.
2d 185, 192-3, 685 N.E.2d 325; emphasis added)

In Talarico, the court refused to give collateral estoppel effect to a criminal conviction based on
plaintiff’s plea of guilty to two counts of misdemeanor battery. The plaintiff, a medical student
who had previously had a clean record, had been charged with aggravated battery, aggravated
unlawful restraint, armed violence and aggravated criminal sexual abuse based on bizarre acts of
violence, but was given a year’s probation with mandatory psychiatric treatment and a monetary
assessment in exchange for pleading guilty to the battery charges. Recognizing his predicament,
the Supreme Court refused to allow use of the battery convictions in subsequent civil litigation
concerning the administration of drugs that allegedly caused the bizarre behavior. Subsequent
cases confirm that when very serious criminal charges are reduced to a misdemeanor and a light
sentence is imposed, the conviction cannot be given collateral estoppel effect, as “Even an
innocent defendant would have to be of stout heart to reject such an offer.” Metropolitan Prop. &
Cas. Ins. Co. v. Pittington, 362 Ill.App.3d 220, 841 N.E.2d 413 (3rd Dist. 2005) (defendant facing
31 years to life allowed to plead to reckless conduct, a misdemeanor).

Other courts generally do not give small claims judgments preclusive effect, either
by decision or rule. Restatement 2d, Judgments, §28(3) and comment d; Sanderson v. Niemann,
17 Cal.2d 563, 573, 110 P.2d 1025 (1941) (small claims judgments not given collateral estoppel
effect); Village Supply Co. v. Iowa Fund, Inc., 312 N.W.2d 551 (Iowa 1981) (refusing to give
collateral estoppel effect to small claims judgment); Indiana Small Claim Rule 11(f) (a judgment
in small claims court shall be res judicata only as to the amount involved in the particular action
and shall not be considered an adjudication of any fact at issue in any other action or court); State
Farm Fire & Cas. Co. v. Emde, 706 S.W.2d 543 (Mo.App. 1986) (small claims judgment denied
preclusive effect); Henriksen v. Gleason, 264 Neb. 840, 643 N.W.2d 652 (2002) (same); Quinn v.
DiGiulian, 81-1921, 1983 U.S.Dist. LEXIS 16618, 97 Lab. Cas. P10,163 (D.D.C. May 29, 1983)
(refusing to give collateral estoppel effect to small claims judgment for $230); Salida School
District v. Morrison, 732 P.2d 1160, 1165 (Colo. 1987) (“The use of an unemployment
compensation decision to bind the parties in a subsequent section 1983 action in which the
employee seeks reinstatement and over $31,000 in back pay and costs would be wholly
inappropriate, and would frustreate the underlying purposes of [the Colorado Employment
Security Act] and collateral estoppel”).
6. LITIGATION PRIVILEGE

Federal decisions reject application of any common law litigation privilege to

FDCPA claims. Sayyed v. Wolpoff & Abramson, 485 F.3d 226, 233-34 (4th Cir. 2007):

Ultimately, W&A's specific arguments are manifestations of the same general

claim: that it simply cannot be the case that the FDCPA covers litigation, the entire
purpose of which is to arrive at the truth through the clash of the adversarial
process. This argument may have some intuitive appeal, but the fact that an
interpretation may seem appealing does not mean that it is correct. While the
district court stated, "I cannot see how commercial litigation could proceed" if the

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 statements at issue in this case were subject to the FDCPA, the FDCPA does not
apply to commercial litigation: it covers debt collection where "debt" is defined as
an obligation of a "consumer," defined as a "natural person," for "personal, family,
or household purposes." 15 U.S.C. § 1692a(3), (5). And, in any event,."[i]n the
ordinary case, absent any indication that doing so would frustrate Congress's clear
intention or yield patent absurdity, our obligation is to apply the statute as
Congress wrote it." Hubbard v. United States, 514 U.S. 695, 703, 115 S. Ct. 1754,
131 L. Ed. 2d 779 (1995) (internal quotation marks omitted). Operating from "the
understanding that Congress says in a statute what it means and means in a statute
what it says there," Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A.,
530 U.S. 1, 6, 120 S. Ct. 1942, 147 L. Ed. 2d 1 (2000), we reverse the district
court's dismissal of the action.
7. OTHER DEFENSES

Nonstatutory defenses should not be recognized under the FDCPA. Generally,

when dealing with a statutory cause of action which enumerates defenses, it is not appropriate to
add to the list. People v. Theobald, 43 Ill.App.3d 897, 356 N.E.2d 1258 (3rd Dist. 1976). For
example, it is inappropriate to recognize the common law “voluntary payment” doctrine as a
defense to a statute which makes it unlawful to induce the payment of money through deceptive
or unfair practices. Scott v. Fairbanks Capital Corp., 284 F.Supp.2d 880 (S.D.Ohio 2003);
Cappetta v. GC Services LP, 3:08cv288, 2009 U.S.Dist. LEXIS 80619, *27-30 (E.D.Va., Sept. 4,
2009); Gonzalez v. Codilis & Assocs., P.C., No. 03 C 2883, 2004 U.S. Dist. LEXIS 5463
(N.D.Ill., March 30, 2004); Harper v. American Tel. & Tel. Co., 54 F.Supp.2d 1371, 1380-81
(S.D.Ga. 1999) (state law regarding voluntary payments cannot be used to prevent recovery of
money obtained through mail fraud).

Hamid v. Stock & Grimes, LLP, 876 F.Supp.2d 500 (E.D.Pa. 2012), rejects
application of a state law voluntary payment defense:

S&G contends that the Pennsylvania state law voluntary payment doctrine
precludes Hamid from recovering the amount she paid in settlement of the
underlying state action at trial in this case. We disagree. The FDCPA is a federal
law and accordingly state law defenses are not relevant here.[2] See, e.g., Allen v.
LaSalle Bank, 629 F.3d 364, 369 (3d Cir. 2011); see also Cappetta v. GC Servs.
L.P., 654 F. Supp. 2d 453, 464 (E.D. Va. 2009). In Allen, our Court of Appeals
determined that a New Jersey state litigation privilege did not "absolve a debt
collector from liability under the FDCPA" because "common law immunities
cannot trump the FDCPA's clear application to the litigating activities of
attorneys." Allen, 629 F.3d at 369 (internal citations and quotations omitted).
Similarly, here S&G may not use a state common law doctrine to avoid paying
damages required by the FDCPA.

We therefore turn to the FDCPA itself to determine whether Hamid may recover at
trial the amount she paid to settle the underlying debt collection action. Congress
has stated that its purpose in enacting the FDCPA was "to eliminate abusive debt
collection practices by debt collectors, to insure that those debt collectors who
refrain from using abusive debt collection practices are not competitively
disadvantaged, and to promote consistent State action to protect consumers against
debt collection abuses." 15 U.S.C. § 1692(e); see also Allen, 629 F.3d at 367. As
our Court of Appeals observed in FTC, "[a] basic tenet of the Act is that all
consumers, even those who have mismanaged their financial affairs resulting in

105
 default on their debt, deserve the right to be treated in a reasonable and civil
manner." 502 F.3d at 165 (internal quotation omitted).

The court in FTC explained that in enacting the FDCPA Congress noted, "`[o]ne
of the most frequent fallacies concerning debt collection legislation is the
contention that the primary beneficiaries are "deadbeats." In fact, however, there is
universal agreement among scholars, law enforcement officials, and even debt
collectors that the number of persons who willfully refuse to pay debts is
minuscule.'" Id. at 165-66 (quoting S. Rep. No. 93-382, at 2 (1977), reprinted in
1977 U.S.C.C.A.N. at 1696)). The court further stated that "Congress recognized
that `the vast majority of consumers who obtain credit fully intend to repay their
debts. When default occurs, it is nearly always due to an unforeseen event such as
unemployment, overextension, serious illness or marital difficulties or divorce.'"
Id.

It is clear from its underlying purpose that debtors may recover for violations of
the FDCPA even if they have defaulted on a debt. It follows that debtors may
recover the amount paid to settle a debt, if the debt collector violated the FDCPA
in making the collection, as occurred here. Hamid paid some or all of the money
she owed to Discover Bank only as a result of the untimely lawsuit filed by S&G
on behalf of the Bank. If her payment was not a proper element of actual damages
under the FDCPA, a debt collector could harass a debtor in violation of the
FDCPA, as a result of that harassment collect the debt, and thereafter retain what it
collected. We do not believe that Congress intended this result.

Accordingly, Hamid may present evidence to the jury of all the actual damages she
sustained, including the amount of money she paid to Discover Bank to settle the
state court collection action. The court will then determine any statutory damages,
costs, and attorneys' fees owed to her.

Similarly, in Abby v. Paige, Case No. 10-23589-CIV-KING (S.D.Fla., January 11,

2013), the court held:

However, the voluntary payment doctrine does not have the effect of precluding
FDCPA claims. Scott v. Fairbanks Capital Corp., 284 F. Supp. 2d 880, 895 (S.D.
Ohio 2003). "The FDCPA is a federal law and accordingly state law defenses are
not relevant here." Hamid v. Stock & Grimes, LLP, No. 11-2349, 2012 WL
2740869, at *2, ___ F. Supp. 2d ___ (E.D. Pa. 2012). Moreover, because the
FDCPA permits a plaintiff to recover for violations of the law even when he
defaulted on a debt, "[i]t follows that debtors may recover the amount paid to settle
a debt" if the debt collector violated the FDCPA in connection with collecting that
debt. Id. at *2.

“When an enactment is clear and unambiguous a court is not at liberty to depart

from the plain language and meaning of the statute by reading into it exceptions, limitations or
conditions that the legislature did not express." Village of Bloomingdale v. CDG Enterprises,
Inc., 196 Ill.2d 484, 493, 752 N.E.2d 1090 (2001).

Except as specified in the FDCPA, consent or waiver should not be a defense:

"Out of an abundance of caution, we further note what should be obvious: a consumer's consent
cannot waive protection from the practices the FDCPA seeks to eliminate, such as false,
misleading, harassing or abusive communications. Permitting such a waiver would violate the

106
public policy goals pursued by the FDCPA." Clark v. Capital Credit & Collection Servs., 460
F.3d 1162, 1171, fn. 5 (9th Cir. 2006).

8. WITNESS IMMUNITY

In several recent cases, FDCPA defendants have claimed that “common law
witness immunity” insulates them against liability for false statements in pleadings, affidavits,
etc., filed in state courts. Most recent decisions reject the “witness immunity” claim on the
ground that it does not apply to a complaining witness. Todd v. Weltman, Weinberg, & Reis Co.,
L.P.A., 434 F.3d 432 (6th Cir. 2006); Blevins v. Hudson & Keyse, Inc., 1:03-cv-241, 2004 U.S.
Dist. LEXIS 24843 (S.D. Ohio Sept. 29, 2004), and 2004 U.S. Dist. LEXIS 24844 (S.D. Ohio
Sept. 29, 2004); Hartman v. Asset Acceptance Corp., 1:03-cv-113, 2004 U.S. Dist. LEXIS 14845
(S.D. Ohio Sept. 29. 2004); Jordan v. Thomas & Thomas, C-1-04-296, 2007 U.S. Dist. LEXIS
71404 (S.D.Ohio September 26, 2007); Foster v. Velocity Invs., LLC, 07 C 0824 and 07 C 2989,
2007 U.S. Dist. LEXIS 63302 (N.D.Ill., August 24, 2007); Chavez v. Bowman, Heintz, Boscia &
Vician, 07 C 670, 2007 U.S. Dist. LEXIS 61936 (N.D.Ill., August 22, 2007); Delawder v.
Platinum Fin. Servs. Corp., 1:04-cv-680, 2007 U.S. Dist. LEXIS 31174 (S.D.Ohio, April 27,
2007); Lee v. Javitch, Block & Rathbone, LLP, 484 F. Supp. 2d 816 (S.D.Ohio 2007). Contra,
Beck v. Codilis & Stawiarski, 4:99cv485, 2000 U.S. Dist. LEXIS 22440 (N.D. Fla. Dec. 27,
2000). See McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939 (9th Cir. 2011).

Todd involved allegations that exempt Social Security income had been seized
because a collection attorney filed a false affdavit stating that he had reason to believe a bank
account held nonexempt assets. The court thought that an independent witness would have
immunity, but not a complaining witness:

Defendant's actions could properly be characterized as malicious prosecution. As a

result, it is a complaining witness without absolute immunity. The fact that
Plaintiff is suing under the FDCPA and not the common law claim does not affect
the immunity status of Defendant. As the Supreme Court stated in Kalina, "in
determining immunity, we examine the nature of the function performed." 522
U.S. at 127 (internal quotations and citation omitted). In this case, Defendant
functioned as a complaining witness, so it may not assert absolute immunity
against any claim in connection with this role.

From a practical perspective, treating Defendant as a complaining witness without

immunity simply makes sense. The Court reserves absolute immunity for
individuals when they functionally serve as "integral parts of the judicial process,"
such as judges, advocates, and witnesses in their ordinary judicial roles. Briscoe,
460 U.S. at 335. The purpose of this immunity is to preserve the integrity of our
judicial system, not to assist a self-interested party who allegedly lies in an
affidavit to initiate a garnishment proceeding. (*40-41)

As pointed out in these decisions, the Seventh Circuit has imposed liability for a false statement
in a complaint. Gearing v. Check Brokerage Corp., 233 F.3d 469 (7th Cir. 2000) (false statement
that plaintiff was “subrogated” to rights of creditor)

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 TEXT OF FDCPA AS AMENDED

§ 1692. Congressional findings and declaration of purpose

(a) Abusive practices. There is abundant evidence of the use of abusive, deceptive, and unfair
debt collection practices by many debt collectors. Abusive debt collection practices contribute to
the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of
individual privacy.

(b) Inadequacy of laws. Existing laws and procedures for redressing these injuries are
inadequate to protect consumers.

(c) Available non-abusive collection methods. Means other than misrepresentation or other
abusive debt collection practices are available for the effective collection of debts.

(d) Interstate commerce. Abusive debt collection practices are carried on to a substantial extent
in interstate commerce and through means and instrumentalities of such commerce. Even where
abusive debt collection practices are purely intrastate in character, they nevertheless directly
affect interstate commerce.

(e) Purposes. It is the purpose of this title to eliminate abusive debt collection practices by debt
collectors, to insure that those debt collectors who refrain from using abusive debt collection
practices are not competitively disadvantaged, and to promote consistent State action to protect
consumers against debt collection abuses.
§ 1692a. Definitions

As used in this title --

(1) The term "Bureau" means the Bureau of Consumer Financial Protection.

(2) The term "communication" means the conveying of information regarding a debt directly or
indirectly to any person through any medium.

(3) The term "consumer" means any natural person obligated or allegedly obligated to pay any
debt.

(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.

(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.

(6) The term "debt collector" means any person who uses any instrumentality of interstate
commerce or the mails in any business the principal 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. Notwithstanding the exclusion provided by clause (F) of the
last sentence of this paragraph, the term includes any creditor who, in the process of collecting his

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own debts, uses any name other than his own which would indicate that a third person is
collecting or attempting to collect such debts. For the purpose of section 808(6) [15 U.S.C. §
1692f(6)], such term also includes any person who uses any instrumentality of interstate
commerce or the mails in any business the principal purpose of which is the enforcement of
security interests. The term does not include--

(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts
for such creditor;

(B) any person while acting as a debt collector for another person, both of whom are related
by common ownership or affiliated by corporate control, if the person acting as a debt collector
does so only for persons to whom it is so related or affiliated and if the principal business of such
person is not the collection of debts;

(C) any officer or employee of the United States or any State to the extent that collecting or
attempting to collect any debt is in the performance of his official duties;
(D) any person while serving or attempting to serve legal process on any other person in
connection with the judicial enforcement of any debt;

(E) any nonprofit organization which, at the request of consumers, performs bona fide
consumer credit counseling and assists consumers in the liquidation of their debts by receiving
payments from such consumers and distributing such amounts to creditors; and

(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed
or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a
bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii)
concerns a debt which was not in default at the time it was obtained by such person; or (iv)
concerns a debt obtained by such person as a secured party in a commercial credit transaction
involving the creditor.

(7) The term "location information" means a consumer's place of abode and his telephone
number at such place, or his place of employment.

(8) The term "State" means any State, territory, or possession of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, or any political subdivision of any of the
foregoing.
§ 1692b. Acquisition of location information

Any debt collector communicating with any person other than the consumer for the purpose of
acquiring location information about the consumer shall--

(1) identify himself, state that he is confirming or correcting location information concerning
the consumer, and, only if expressly requested, identify his employer;

(2) not state that such consumer owes any debt;

(3) not communicate with any such person more than once unless requested to do so by such
person or unless the debt collector reasonably believes that the earlier response of such person is
erroneous or incomplete and that such person now has correct or complete location information;

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 (4) not communicate by post card;

(5) not use any language or symbol on any envelope or in the contents of any communication
effected by the mails or telegram that indicates that the debt collector is in the debt collection
business or that the communication relates to the collection of a debt; and

(6) after the debt collector knows the consumer is represented by an attorney with regard to the
subject debt and has knowledge of, or can readily ascertain, such attorney's name and address, not
communicate with any person other than that attorney, unless the attorney fails to respond within
a reasonable period of time to communication from the debt collector.
§ 1692c. Communication in connection with debt collection

(a) Communication with the consumer generally. Without the prior consent of the consumer
given directly to the debt collector or the express permission of a court of competent jurisdiction,
a debt collector may not communicate with a consumer in connection with the collection of any
debt–

(1) at any unusual time or place or a time or place known or which should be known to be
inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a
debt collector shall assume that the convenient time for communicating with a consumer is after 8
o'clock/ antimeridian and before 9 o'clock postmeridian, local time at the consumer's location;

(2) if the debt collector knows the consumer is represented by an attorney with respect to such
debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the
attorney fails to respond within a reasonable period of time to a communication from the debt
collector or unless the attorney consents to direct communication with the consumer; or

(3) at the consumer's place of employment if the debt collector knows or has reason to know
that the consumer's employer prohibits the consumer from receiving such communication.

(b) Communication with third parties. Except as provided in section 804 [15 U.S.C. § 1692b],
without the prior consent of the consumer given directly to the debt collector, or the express
permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a
postjudgment judicial remedy, a debt collector may not communicate, in connection with the
collection of any debt, with any person other than the consumer, his attorney, a consumer
reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the
attorney of the debt collector.

(c) Ceasing communication. If a consumer notifies a debt collector in writing that the consumer
refuses to pay a debt or that the consumer wishes the debt collector to cease further
communication with the consumer, the debt collector shall not communicate further with the
consumer with respect to such debt, except--

(1) to advise the consumer that the debt collector's further efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor may invoke specified remedies
which are ordinarily invoked by such debt collector or creditor; or

(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke
a specified remedy.

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If such notice from the consumer is made by mail, notification shall be complete upon receipt.

(d) "Consumer" defined. For the purpose of this section, the term "consumer" includes the
consumer's spouse, parent (if the consumer is a minor), guardian, executor, or administrator.

§ 1692d. Harassment or abuse

A debt collector may not engage in any conduct the natural consequence of which is to harass,
oppress, or abuse any person in connection with the collection of a debt. Without limiting the
general application of the foregoing, the following conduct is a violation of this section:

(1) The use or threat of use of violence or other criminal means to harm the physical person,
reputation, or property of any person.

(2) The use of obscene or profane language or language the natural consequence of which is to
abuse the hearer or reader.

(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a
consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3) of
this Act [15 U.S.C. §§ 1681a(f) or 1681b(3)].

(4) The advertisement for sale of any debt to coerce payment of the debt.

(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or
continuously with intent to annoy, abuse, or harass any person at the called number.

(6) Except as provided in section 804 [15 U.S.C. §1692b], the placement of telephone calls
without meaningful disclosure of the caller's identity.
§ 1692e. False or misleading representations

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

(B) any services rendered or compensation which may be lawfully received by any debt
collector for the collection of a debt.

(3) The false representation or implication that any individual is an attorney or that any
communication is from an attorney.

(4) The representation or implication that nonpayment of any debt will result in the arrest or

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imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or
wages of any person unless such action is lawful and the debt collector or creditor intends to take
such action.

(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.

(6) The false representation or implication that a sale, referral, or other transfer of any interest
in a debt shall cause the consumer to--

(A) lose any claim or defense to payment of the debt; or

(B) become subject to any practice prohibited by this title [15 U.S.C. §§ 1692 et seq.].

(7) The false representation or implication that the consumer committed any crime or other
conduct in order to disgrace the consumer.

(8) Communicating or threatening to communicate to any person credit information which is

known or which should be known to be false, including the failure to communicate that a disputed
debt is disputed.

(9) The use or distribution of any written communication which simulates or is falsely
represented to be a document authorized, issued, or approved by any court, official, or agency of
the United States or any State, or which creates a false impression as to its source, authorization,
or approval.

(10) The use of any false representation or deceptive means to collect or attempt to collect any
debt or to obtain information concerning a consumer.

(11) The failure to disclose in the initial written communication with the consumer and, in
addition, if the initial communication with the consumer is oral, in that initial oral
communication, that the debt collector is attempting to collect a debt and that any information
obtained will be used for that purpose, and the failure to disclose in subsequent communications
that the communication is from a debt collector, except that this paragraph shall not apply to a
formal pleading made in connection with a legal action.

(12) The false representation or implication that accounts have been turned over to innocent
purchasers for value.

(13) The false representation or implication that documents are legal process.

(14) The use of any business, company, or organization name other than the true name of the
debt collector's business, company, or organization.

(15) The false representation or implication that documents are not legal process forms or do
not require action by the consumer.

(16) The false representation or implication that a debt collector operates or is employed by a
consumer reporting agency as defined by section 6a(f) of this Act [15 U.S.C. § 1681a(f)].
§ 1692f. Unfair practices

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any

112
debt. Without limiting the general application of the foregoing, the following conduct is a
violation of this section:

(1) The collection of any amount (including any interest, fee, charge, or expense incidental to
the principal obligation) unless such amount is expressly authorized by the agreement creating the
debt or permitted by law.

(2) The acceptance by a debt collector from any person of a check or other payment instrument
postdated by more than five days unless such person is notified in writing of the debt collector's
intent to deposit such check or instrument not more than ten nor less than three business days
prior to such deposit.

(3) The solicitation by a debt collector of any postdated check or other postdated payment
instrument for the purpose of threatening or instituting criminal prosecution.

(4) Depositing or threatening to deposit any postdated check or other postdated payment
instrument prior to the date on such check or instrument.

(5) Causing charges to be made to any person for communications by concealment of the true
purpose of the communication. Such charges include, but are not limited to, collect telephone
calls and telegram fees.

(6) Taking or threatening to take any nonjudicial action to effect dispossession or disablement
of property if--

(A) there is no present right to possession of the property claimed as collateral through an
enforceable security interest;

(B) there is no present intention to take possession of the property; or

(C) the property is exempt by law from such dispossession or disablement.

(7) Communicating with a consumer regarding a debt by post card.

(8) Using any language or symbol, other than the debt collector's address, on any envelope
when communicating with a consumer by use of the mails or by telegram, except that a debt
collector may use his business name if such name does not indicate that he is in the debt
collection business.
§ 1692g. Validation of debts

(a) Notice of debt; contents. Within five days after the initial communication with a consumer in
connection with the collection of any debt, a debt collector shall, unless the following information
is contained in the initial communication or the consumer has paid the debt, send the consumer a
written notice containing--

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes
the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt

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collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day
period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification
of the debt or a copy of a judgment against the consumer and a copy of such verification or
judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt
collector will provide the consumer with the name and address of the original creditor, if different
from the current creditor.

(b) Disputed debts. If the consumer notifies the debt collector in writing within the thirty-day
period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the
consumer requests the name and address of the original creditor, the debt collector shall cease
collection of the debt, or any disputed portion thereof, until the debt collector obtains verification
of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy
of such verification or judgment, or name and address of the original creditor, is mailed to the
consumer by the debt collector. Collection activities and communications that do not otherwise
violate this title may continue during the 30-day period referred to in subsection (a) unless the
consumer has notified the debt collector in writing that the debt, or any portion of the debt, is
disputed or that the consumer requests the name and address of the original creditor. Any
collection activities and communication during the 30-day period may not overshadow or be
inconsistent with the disclosure of the consumer's right to dispute the debt or request the name
and address of the original creditor.

(c) Admission of liability. The failure of a consumer to dispute the validity of a debt under this
section may not be construed by any court as an admission of liability by the consumer.

(d) Legal pleadings. A communication in the form of a formal pleading in a civil action shall not
be treated as an initial communication for purposes of subsection (a).

(e) Notice provisions. The sending or delivery of any form or notice which does not relate to the
collection of a debt and is expressly required by the Internal Revenue Code of 1986 [26 U.S.C. §§
1 et seq.], title V of Gramm-Leach-Bliley Act [15 U.S.C. §§ 6801 et seq.], or any provision of
Federal or State law relating to notice of data security breach or privacy, or any regulation
prescribed under any such provision of law, shall not be treated as an initial communication in
connection with debt collection for purposes of this section.
§ 1692h. Multiple debts

If any consumer owes multiple debts and makes any single payment to any debt collector with
respect to such debts, such debt collector may not apply such payment to any debt which is
disputed by the consumer and, where applicable, shall apply such payment in accordance with the
consumer's directions.
§ 1692i. Legal actions by debt collectors

(a) Venue. 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

114
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.

(b) Authorization of actions. Nothing in this title shall be construed to authorize the bringing of
legal actions by debt collectors.
§ 1692j. Furnishing certain deceptive forms

(a) It is unlawful to design, compile, and furnish any form knowing that such form would be used
to create the false belief in a consumer that a person other than the creditor of such consumer is
participating in the collection of or in an attempt to collect a debt such consumer allegedly owes
such creditor, when in fact such person is not so participating.

(b) Any person who violates this section shall be liable to the same extent and in the same
manner as a debt collector is liable under section 813 [15 U.S.C. §1692k] for failure to comply
with a provision of this title [15 U.S.C. §§ 1692 et seq.].
§ 1692k. Civil liability

(a) Amount of damages. Except as otherwise provided by this section, any debt collector who
fails to comply with any provision of this title with respect to any person is liable to such person
in an amount equal to the sum of--

(1) any actual damage sustained by such person as a result of such failure;

(2) (A) in the case of any action by an individual, such additional damages as the court may
allow, but not exceeding $ 1,000; or
(B) in the case of a class action, (i) such amount for each named plaintiff as could be
recovered under subparagraph (A), and (ii) such amount as the court may allow for all other class
members, without regard to a minimum individual recovery, not to exceed the lesser of $ 500,000
or 1 per centum of the net worth of the debt collector; and

(3) in the case of any successful action to enforce the foregoing liability, the costs of the action,
together with a reasonable attorney's fee as determined by the court. On a finding by the court that
an action under this section was brought in bad faith and for the purpose of harassment, the court
may award to the defendant attorney's fees reasonable in relation to the work expended and costs.

(b) Factors considered by court. In determining the amount of liability in any action under
subsection (a), the court shall consider, among other relevant factors--

(1) in any individual action under subsection (a)(2)(A), the frequency and persistence of
noncompliance by the debt collector, the nature of such noncompliance, and the extent to which

115
such noncompliance was intentional; or

(2) in any class action under subsection (a)(2)(B), the frequency and persistence of
noncompliance by the debt collector, the nature of such noncompliance, the resources of the debt
collector, the number of persons adversely affected, and the extent to which the debt collector's
noncompliance was intentional.

(c) Intent. A debt collector may not be held liable in any action brought under this title if the debt
collector shows by a preponderance of evidence that the violation was not intentional and resulted
from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to
avoid any such error.

(d) Jurisdiction. An action to enforce any liability created by this title may be brought in any
appropriate United States district court without regard to the amount in controversy, or in any
other court of competent jurisdiction, within one year from the date on which the violation occurs.

(e) Advisory opinions of Bureau. No provision of this section imposing any liability shall apply
to any act done or omitted in good faith in conformity with any advisory opinion of the Bureau,
notwithstanding that after such act or omission has occurred, such opinion is amended, rescinded,
or determined by judicial or other authority to be invalid for any reason.
§ 1692l. Administrative enforcement

(a) Federal Trade Commission. The Federal Trade Commission shall be authorized to enforce
compliance with this title [15 USCS §§ 1692 et seq.], except to the extent that enforcement of the
requirements imposed under this title [15 USCS §§ 1692 et seq.] is specifically committed to
another Government agency under any of paragraphs (1) through (5) of subsection (b), subject to
subtitle B of the Consumer Financial Protection Act of 2010 [12 USCS § 5511 et seq.]. For
purpose of the exercise by the Federal Trade Commission of its functions and powers under the
Federal Trade Commission Act (15 U.S.C. 41 et seq.), a violation of this title [15 USCS §§ 1692
et seq.] shall be deemed an unfair or deceptive act or practice in violation of that Act. All of the
functions and powers of the Federal Trade Commission under the Federal Trade Commission Act
[15 USCS §§ 41 et seq.] are available to the Federal Trade Commission to enforce compliance by
any person with this title, irrespective of whether that person is engaged in commerce or meets
any other jurisdictional tests under the Federal Trade Commission Act, including the power to
enforce the provisions of this title [15 USCS §§ 1692 et seq.], in the same manner as if the
violation had been a violation of a Federal Trade Commission trade regulation rule.

(b) Applicable provisions of law. Subject to subtitle B of the Consumer Financial Protection Act
of 2010 [12 USCS §§ 5511 et seq.], compliance with any requirements imposed under this title
[15 USCS §§ 1692 et seq.] shall be enforced under--

(1) section 8 of the Federal Deposit Insurance Act [12 USCS § 1818], by the appropriate
Federal banking agency, as defined in section 3(q) of the Federal Deposit Insurance Act (12
U.S.C. 1813(q)), with respect to--

(A) national banks, Federal savings associations, and Federal branches and Federal agencies
of foreign banks;

(B) member banks of the Federal Reserve System (other than national banks), branches and
agencies of foreign banks (other than Federal branches, Federal agencies, and insured State
branches of foreign banks), commercial lending companies owned or controlled by foreign banks,

116
and organizations operating under section 25 or 25A of the Federal Reserve Act ; and

(C) banks and State savings associations insured by the Federal Deposit Insurance
Corporation (other than members of the Federal Reserve System), and insured State branches of
foreign banks;

(2) the Federal Credit Union Act [12 USCS §§ 1751 et seq.], by the Administrator of the
National Credit Union Administration [National Credit Union Administration Board] with respect
to any Federal credit union;

(3) the Acts to regulate commerce [49 USCS §§ 10101 et seq.], by the Secretary of
Transportation, with respect to all carriers subject to the jurisdiction of the Surface Transportation
Board;

(4) the Federal Aviation Act of 1958 [49 USCS §§ 40101 et seq.], by the Secretary of
Transportation with respect to any air carrier or any foreign air carrier subject to that Act [49
USCS §§ 40101 et seq.];

(5) the Packers and Stockyards Act, 1921 [7 USCS §§ 181 et seq.] (except as provided in
section 406 of that Act [7 USCS §§ 226 and 227]), by the Secretary of Agriculture with respect to
any activities subject to that Act [7 USCS §§ 181 et seq.]; and

(6) subtitle E of the Consumer Financial Protection Act of 2010 [12 USCS §§ 5561 et seq.], by
the Bureau, with respect to any person subject to this title [15 USCS §§ 1692 et seq.].

The terms used in paragraph (1) that are not defined in this title [15 USCS §§ 1692 et seq.] or
otherwise defined in section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) shall
have the meaning given to them in section 1(b) of the International Banking Act of 1978 (12
U.S.C. 3101).

(c) Agency powers. For the purpose of the exercise by any agency referred to in subsection (b) of
its powers under any Act referred to in that subsection, a violation of any requirement imposed
under this title [15 USCS §§ 1692 et seq.] shall be deemed to be a violation of a requirement
imposed under that Act. In addition to its powers under any provision of law specifically referred
to in subsection (b), each of the agencies referred to in that subsection may exercise, for the
purpose of enforcing compliance with any requirement imposed under this title [15 USCS §§
1692 et seq.] any other authority conferred on it by law, except as provided in subsection (d).

(d) Rules and regulations. Except as provided in section 1029(a) of the Consumer Financial
Protection Act of 2010 [12 USCS § 5519(a)], the Bureau may prescribe rules with respect to the
collection of debts by debt collectors, as defined in this title [15 USCS §§ 1692 et seq.].
§ 1692m. Reports to Congress by the Commission; views of other Federal agencies

(a) Not later than one year after the effective date of this title and at one-year intervals thereafter,
the Bureau shall make reports to the Congress concerning the administration of its functions
under this title [15 USCS §§ 1692 et seq.], including such recommendations as the Bureau deems
necessary or appropriate. In addition, each report of the Bureau shall include its assessment of the
extent to which compliance with this title [15 USCS §§ 1692 et seq.] is being achieved and a
summary of the enforcement actions taken by the Bureau under section 814 of this title [15 USCS
§ 1692l]

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(b) In the exercise of its functions under this title [15 USCS §§ 1692 et seq.], the Bureau may
obtain upon request the views of any other Federal agency which exercises enforcement functions
under section 814 of this title [15 USCS § 1692l].
§ 1692n. Relation to State laws

This title [15 U.S.C. § § 1692 et seq.] does not annul, alter, or affect, or exempt any person
subject to the provisions of this title [15 U.S.C. § § 1692 et seq.] from complying with the laws
of any State with respect to debt collection practices, except to the extent that those laws are
inconsistent with any provision of this title [15 U.S.C. § § 1692 et seq.], and then only to the
extent of the inconsistency. For purposes of this section, a State law is not inconsistent with this
title [15 U.S.C. § § 1692 et seq.] if the protection such law affords any consumer is greater than
the protection provided by this title [15 U.S.C. § § 1692 et seq.].
§ 1692o. Exemption for State regulation

The Bureau shall by regulation exempt from the requirements of this title [15 USCS §§ 1692 et
seq.] any class of debt collection practices within any State if the Bureau determines that under
the law of that State that class of debt collection practices is subject to requirements substantially
similar to those imposed by this title [15 USCS §§ 1692 et seq.], and that there is adequate
provision for enforcement.
§ 1692p. Exception for certain bad check enforcement programs operated by private
entities

(a) In general.

(1) Treatment of certain private entities. Subject to paragraph (2), a private entity shall be
excluded from the definition of a debt collector, pursuant to the exception provided in section
803(6) [15 U.S.C. § 1692a(6)], with respect to the operation by the entity of a program described
in paragraph (2)(A) under a contract described in paragraph (2)(B).

(2) Conditions of applicability. Paragraph (1) shall apply if--

(A) a State or district attorney establishes, within the jurisdiction of such State or district
attorney and with respect to alleged bad check violations that do not involve a check described in
subsection (b), a pretrial diversion program for alleged bad check offenders who agree to
participate voluntarily in such program to avoid criminal prosecution;

(B) a private entity, that is subject to an administrative support services contract with a State
or district attorney and operates under the direction, supervision, and control of such State or
district attorney, operates the pretrial diversion program described in subparagraph (A); and

(C) in the course of performing duties delegated to it by a State or district attorney under the
contract, the private entity referred to in subparagraph (B)--

(i) complies with the penal laws of the State;

(ii) conforms with the terms of the contract and directives of the State or district attorney;

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 (iii) does not exercise independent prosecutorial discretion;

(iv) contacts any alleged offender referred to in subparagraph (A) for purposes of
participating in a program referred to in such paragraph--

(I) only as a result of any determination by the State or district attorney that probable
cause of a bad check violation under State penal law exists, and that contact with the alleged
offender for purposes of participation in the program is appropriate; and

(II) the alleged offender has failed to pay the bad check after demand for payment,
pursuant to State law, is made for payment of the check amount;

(v) includes as part of an initial written communication with an alleged offender a clear and
conspicuous statement that--

(I) the alleged offender may dispute the validity of any alleged bad check violation;
(II) where the alleged offender knows, or has reasonable cause to believe, that the alleged
bad check violation is the result of theft or forgery of the check, identity theft, or other fraud that
is not the result of the conduct of the alleged offender, the alleged offender may file a crime
report with the appropriate law enforcement agency; and

(III) if the alleged offender notifies the private entity or the district attorney in writing, not
later than 30 days after being contacted for the first time pursuant to clause (iv), that there is a
dispute pursuant to this subsection, before further restitution efforts are pursued, the district
attorney or an employee of the district attorney authorized to make such a determination makes a
determination that there is probable cause to believe that a crime has been committed; and

(vi) charges only fees in connection with services under the contract that have been
authorized by the contract with the State or district attorney.

(b) Certain checks excluded. A check is described in this subsection if the check involves, or is
subsequently found to involve--

(1) a postdated check presented in connection with a payday loan, or other similar transaction,
where the payee of the check knew that the issuer had insufficient funds at the time the check was
made, drawn, or delivered;

(2) a stop payment order where the issuer acted in good faith and with reasonable cause in
stopping payment on the check;

(3) a check dishonored because of an adjustment to the issuer's account by the financial
institution holding such account without providing notice to the person at the time the check was
made, drawn, or delivered;

(4) a check for partial payment of a debt where the payee had previously accepted partial
payment for such debt;

(5) a check issued by a person who was not competent, or was not of legal age, to enter into a
legal contractual obligation at the time the check was made, drawn, or delivered; or

(6) a check issued to pay an obligation arising from a transaction that was illegal in the

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jurisdiction of the State or district attorney at the time the check was made, drawn, or delivered.

(c) Definitions. For purposes of this section, the following definitions shall apply:

(1) State or district attorney. The term "State or district attorney" means the chief elected or
appointed prosecuting attorney in a district, county (as defined in section 2 of title 1, United
States Code), municipality, or comparable jurisdiction, including State attorneys general who act
as chief elected or appointed prosecuting attorneys in a district, county (as so defined),
municipality or comparable jurisdiction, who may be referred to by a variety of titles such as
district attorneys, prosecuting attorneys, commonwealth's attorneys, solicitors, county attorneys,
and state's attorneys, and who are responsible for the prosecution of State crimes and violations of
jurisdiction-specific local ordinances.

(2) Check. The term "check" has the same meaning as in section 3(6) of the Check Clearing for
the 21st Century Act [12 U.S.C. § 5002(6)].

(3) Bad check violation. The term "bad check violation" means a violation of the applicable
State criminal law relating to the writing of dishonored checks.

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