Proposed Changes to The FDCPA

[ppdotcomadmin]

There is currently a bill in Congress called HR-3066 which is sponsored by and being pushed heavily by the American Collector's Association.

Link to HR-3066 here

I would encourage all consumer to research the Bill and write their Congress persons and Senators and give their input on the proposed amendments to the Fair Debt Collection Practices Act. The ACA has deep pockets and the NCLC is a non-profit organization fighting for consumer rights.

I am in the process of gathering information from Margot Saunders at the National Consumer Law Center about starting a Consumer Action Committe to give input into the proposed amendments to the FDCPA. Check here for updates www.PermissiblePurpose.com

Below is a list of the proposed amendments to the FDCPA by the ACA and NCLC:

1. NCLC proposed amendment to allow the right to record telephone calls –

Amend Section 806 (15 U.S.C. Section 1692d) by designating the existing language as section (a) and adding the following section (:

( Notwithstanding any other provision of state or federal law, when the consumer receives a call from a person collecting a consumer debt, the consumer and the debt collector are authorized to record the telephone conversation to which they are both a party without the knowledge or consent of the other, and that recording shall be admissible in proceedings respecting fair debt collection practices.

** I emailed Margot Saunders to propose modifying "when the consumer receives a call" to "when a consumer engages in a telephone conversation with." That way it would read:

"( Notwithstanding any other provision of state or federal law, when a consumer engages in a telephone conversation with a person collecting a consumer debt, the consumer and the debt collector are authorized to record the telephone conversation to which they are both a party without the knowledge or consent of the other, and that recording shall be admissible in proceedings respecting fair debt collection practices."

This would give the consumer the right to record a telephone conversation which was initiated by the consumer. Otherwise the debt collector can call and leave a message for the consumer to call them back and then harass/abuse the consumer and the consumer would not have to right under the FDCPA to record the call. It would fall back on the consumer's state laws on recording telephone conversations, which is the present state of the FDCPA.

1. ACA proposed amendment to allow collections within first 30 days –

Add a new subsection (d) to Section 809 of the FDCPA (15 U.S.C. Section 1692g) to read:

“(d) Collection activities and communications may continue during the 30 day period so long as they do not overshadow the information provided in subsection (a) of this section.”

2. NCLC proposed amendment dealing with the Rooker Feldman Problem (subject to addressing some issues) –

**Under the Rooker-Feldman doctrine, lower federal courts lack subject matter jurisdiction to review state court adjudications. Because district courts have only original jurisdiction, not appellate jurisdiction, they lack subject matter jurisdiction to review state court adjudications. And while the courts of appeals have jurisdiction to hear appeals from the district courts, only the Supreme Court has authority to review state court judgments.

Add a new section (c to Section 811 of the FDCPA ( 15 U.S.C. §1692i) to read

“( c) Entry of a default judgment in any legal action on a debt shall not preclude a person from redressing any violation of this subchapter.”

2. ACA proposed amendment to allow formal pleadings to omit the notice of the right to verification.

Amend Section 809 of the FDCPA (15 U.S.C. Section 1692g) by adding a new subsection (d) to read:

“(d) Communications which are formal pleadings in a civil action are not considered initial communications for purposes of subsection (a) of this section.”

3. NCLC proposed amendment providing for injunctive relief –

Amend section 813(a)(3) of the Fair Debt Collection Practices Act (15 U.S.C. § 1692k) by rewriting section (a) to read as follows:

"(a)Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this sub-chapter 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

( 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 or to order such equitable and declaratory relief as is necessary to enforce the requirements imposed under this chapter, 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.”

3. ACA proposed amendment to establish either a negotiated and codified validation notice, or to allow the FTC to establish the notice by rulemaking.

FDCPA NOTICE

You and I have rights under federal law. I have the right to assume you owe this debt. You can tell me you do not, by disputing the debt. Your dispute must be in writing. Please include the following information:

YOUR NAME AND YOUR ACCOUNT NUMBER;

AN EXPLANATION OF WHY YOU DISPUTE THE DEBT;

ANY DOCUMENTATION YOU MAY HAVE TO SUPPORT YOUR DISPUTE.

I MUST RECEIVE YOUR WRITTEN DISPUTE NO LATER THAN 30 DAYS AFTER YOU RECEIVED THIS NOTICE. After I receive your dispute: I will verify the debt and send you the results; or If your debt is on record with a court I will send you a copy of the judgment.

You also have the right to ask me for your original creditor's name and address. You must ask me for this information in writing no later than 30 days after I receive this notice. After I receive your request, I will send you this information.

4. A limited version of NCLC proposed amendment to provide the notice of the cease and desist right in the initial communication (the collectors are adamant about not wanting to make this notice required in all verbal communications) –

Amend section 805© (15 U.S.C. § 1692c) by rewriting it to read as follows:

§ 1692c. Communication in connection with debt collection.

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 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 specific 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.

Notification shall be complete upon receipt. The debt collector shall provide the consumer notice of the consumer’s right to request the collector to cease further communications in the initial communication to the consumer.

4. ACA proposed amendment regarding attorneys at law and changing reasonable time to respond to 30 days –

Amend Section 804(6) of the FDCPA (15 U.S.C. Section 1692b) to read:

“(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 30 days to a communication from the debt collector.”

Amend Section 805 (a)(2) of the FDCPA (15 U.S.C. Section 1692c) to read:

(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 30 days to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or …

The current status of this BILL and other consumer initiatives by NCLC can be seen on the NCLC website here.

[c m chase]

1. ACA proposed amendment to allow collections within first 30 days –

Add a new subsection (d) to Section 809 of the FDCPA (15 U.S.C. Section 1692g) to read:

“(d) Collection activities and communications may continue during the 30 day period so long as they do not overshadow the information provided in subsection (a) of this section.”

Good. Now it won't even be an issue of explaining and proving it when they overshadow.

3. ACA proposed amendment to establish either a negotiated and codified validation notice, or to allow the FTC to establish the notice by rulemaking.

FDCPA NOTICE

You and I have rights under federal law. I have the right to assume you owe this debt. You can tell me you do not, by disputing the debt. Your dispute must be in writing. Please include the following information:

YOUR NAME AND YOUR ACCOUNT NUMBER;

AN EXPLANATION OF WHY YOU DISPUTE THE DEBT;

ANY DOCUMENTATION YOU MAY HAVE TO SUPPORT YOUR DISPUTE.

I MUST RECEIVE YOUR WRITTEN DISPUTE NO LATER THAN 30 DAYS AFTER YOU RECEIVED THIS NOTICE. After I receive your dispute: I will verify the debt and send you the results; or If your debt is on record with a court I will send you a copy of the judgment.

You also have the right to ask me for your original creditor's name and address. You must ask me for this information in writing no later than 30 days after I receive this notice. After I receive your request, I will send you this information.

What a crock. I certainly hope that doesn't pass.

[ppdotcomadmin]

CMChase...

I MUST RECEIVE YOUR WRITTEN DISPUTE NO LATER THAN 30 DAYS AFTER YOU RECEIVED THIS NOTICE. After I receive your dispute: I will verify the debt and send you the results; or If your debt is on record with a court I will send you a copy of the judgment.

The part you highlighted and commented as a "crock", is not really a change to the existing law. It merely clarifies that upon receipt of a written dispute within 30-days, they will verify the debt.

That is already a requirement. This proposed amendment is an attempt to form a "standard" validation notice.

[c m chase]

Sure....but "I must receive your written dispute no later than 30 days after you recieved this notice" makes it sound like if you didn't get the notice to them in time you're saying it's yours and there's nothing else you can do about it ever.

The way it's written, it sounds a bit confusing to me...and it certainly would confuse the least sophisticated consumer, if we're gonna go there.

Hell, maybe I'M just the least sophisticated.

[Recovering Attorney]

What is a crock is that the ACA will agree to a plain language validation notice in exchange for allowing them to harass a debtor during the 30 day period, and mandating that any dispute must be in writing.

[DocDon]

Why do they want to change a law they don't even follow in the first place?

[admin]

Why do they want to change a law they don't even follow in the first place?

No Sh*t!

[ppdotcomadmin]

I think everyone has missed the purpose of this.

Since the collectors association has brought the bill, it is subject to conusmer input as well. The proposed changes by the ACA does not change the FDCPA in any major way. Mostly, if specifies a standard validation notice. It does not require all disputes to be in writing.

But this is a huge opportunity to make advances for the consumer. The ability to records calls with debt collectors is a great example of a pro-consumer proposed change.

Additionallly, if consumers got together and wrote they politicians, we could get an amendment that would allow consumers to request verification of a debt at anytime, and require the debt colletor to cease communication until verification is sent, as opposed to the limited 30-day window now.

[DocDon]

I got the purpose. I was being facetious.

I think we need to directly solicit the committee members first, then move on to our own legislators. Putting a $20 bill in the envelope helps to get your views across, I've found.