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Summons issued by collection agency


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I have a question about this in terms of FDCPA applicability.

My recent reading of the Mezine opinion letter

http://www.ftc.gov/os/2000/04/fdcpaadvisoryopinion.htm

This clause struck me as particularly interesting:

Where an attorney debt collector institutes legal proceedings against a debtor but has no prior communications with the debtor, are the requirements for the validation of debts set forth in Section 809 of the FDCPA supreme to state law or state court rules that otherwise prohibit the inclusion of the validation notice on court documents?

...

If an attorney debt collector has had no prior communications with a consumer before serving a summons or other court document on the consumer, that document would constitute the "initial communication" with the consumer if it conveys information regarding a debt. The attorney would therefore have to include the written notice mandated by Section 809(a) (often referred to as the "validation notice") in the court document itself or send it to the consumer "within five days after the initial communication."

...

The state provisions about which you inquire do not prevent consumers from receiving the full panoply of protections from abusive debt collection practices afforded by the FDCPA. The only FDCPA provision that could be affected by these state laws and court rules is Section 809(a). As noted above, an attorney debt collector who is prohibited from including the validation notice in court documents may deliver the notice to consumers before serving the consumer with the court document or, if the court document is the first communication with the consumer, within five days after serving the court document. Thus, even in a jurisdiction that prohibits validation notices in court documents, a consumer will receive the validation notice and learn, for example, that the debt collector must provide the consumer with written verification of the debt if the consumer disputes the debt within thirty days. State legislation that prohibits validation notices in court documents also does not stand as an obstacle to the promotion of "consistent State action to protect consumers against debt collection abuses." Consumers will receive their validation notices in jurisdictions that prohibit validation notices in court documents as well as in jurisdictions that permit the practice.

So in CIC's opinion, does this apply to attorneys retained by CAs if the attorney regularly engages in debt collection, and is thus considered a debt collector in regards to the FDCPA?

Or is the filing of suit exempt because it is legal action and not collection activity?

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So in CIC's opinion, does this apply to attorneys retained by CAs if the attorney regularly engages in debt collection, and is thus considered a debt collector in regards to the FDCPA?

Or is the filing of suit exempt because it is legal action and not collection activity?

In a huge majority of the time, the summons will contain the required FDCPA disclosure of the consumer's right to validation. Lawyers who regularly sue for debt collection include this in "an abundance of caution".

However, this is one of the world's all time stupid court decisions.

It gives the consumer a false sense of security. He thinks that he can dispute the debt and stay the legal proceedings. He fails to realize the low standard the FDCPA sets for a validation response -- essentially name and address of the OC after the Wollman verification.

Big whoop. While consumer goes on in ignorance, he fails to answer the lawsuit or to conduct discovery. Result -- he loses. But, he got his validation.

I repeat this again and again. Once sued a DV is absolutely utterly completely worthless and useless.

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Thanks DG,

I completely that the DV is useless in trying to stop or stay any lawsuit. One would simply end up with a default judgment or an adverse judgment if they had to go in front of the judge.

The only use I could see in doing it, would be if you're filing counterclaims agasint the original plaintiff, and you want to bring the law firm in as a third party also in violation of the FDCPA.

More of an act to bolster your claim if you do in fact have a case and wish to strengthen it with more supporting caselaw per Heintz v. Jenkins.

Of course it doesn't make sense that anyone use a DV to a debt collecting law firm in hopes that it will offer them a defense. That truly is a useless waste of paper, and as has been said many times on here, the best way to go about defending against this would be to answer and commence discovery.

So in one respect, the counterclaims, the DV is not absolutely useless.

In another, as for a defense, it surely is.

So, OP, have you prepared an answer?

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There is a lot of controversy on the filing of suit being an "initial communication".

Some circuit have held that it is and some have held that it is not, until they all get on the same sheet of music by either agreeing or the federal legislature makes it a law we will continue to leave this argument up to each individual court.

Right now your best bet is go to court and have a motion for discovery ready to submit to the courts, then you can get all the info you need. And if they don't have what they need to prove the debt then ask for a motion to dismiss due to lack of evidence.

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There is a lot of controversy on the filing of suit being an "initial communication".

Some circuit have held that it is and some have held that it is not,

Which is why the summons will generally contain the required FDCPA disclosure of the consumer's right to validation. Lawyers who regularly sue for debt collection include this in "an abundance of caution".

Kinda makes the initial communication argument moot. Eh?

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There is a lot of controversy on the filing of suit being an "initial communication".

Some circuit have held that it is and some have held that it is not,

Which is why the summons will generally contain the required FDCPA disclosure of the consumer's right to validation. Lawyers who regularly sue for debt collection include this in "an abundance of caution".

Kinda makes the initial communication argument moot. Eh?

Really? To date I have seen about 100+ summons and complaints and this language is NEVER included. It wouldn't make sense. Where are you getting your information that most summons/complaints contain this language?

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I've been doing some more research on this question, and from what I've gathered. Two circuits that have ruled that it is communication, ruled prior to the 2006 amendments to the act.

the 2006 amendment to the act, negated the court decisions, as the law had evolved and the previous precendential decisions, were in turn rendered obsolete.

I'd have to go dig the cases back up, but I believe they were adjudicated circa 2004-2005.

However, one particular lawyer has viewed this with some paranoia.

He writes to say that even though an initial pleading may not be considered communication, other motions can be. And with these, comes the necessity to provide the mini miranda, and other things, else possibly face FDCPA violations.

You can read the full text here. http://debt3online.com/?page=article&article_id=161&srch=march

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However, one particular lawyer has viewed this with some paranoia.

I don't think the guy is a lawyer. He's like a credit manager or something.

Hopefully, we won't make RA tell us 3 times. Pleadings have been statutorily eliminated from the definition of initial communication. Older cases which say otherwise are no longer valid cites.

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Really? To date I have seen about 100+ summons and complaints and this language is NEVER included. It wouldn't make sense. Where are you getting your information that most summons/complaints contain this language?

I'll take your word for what you saw. I've seen considerably more than a 100 and as best I recall they all had the disclosure. Of course, those law firms are just exercising caution. Perhaps we are just seeming different things.

Or perhaps given the comments by NASCAR, the environment has changed -- I confess that I have been away from this for a couple of years. But, I did see eyes on two summons in the past year and both contained the disclosure. Hmmm. I don't hardly know what to think now.

As RA noted, there is an exemption in the definition of a summons as initial communication. Although, as I recall, there was a court case with some limited jurisdiction that does define the summons as initial communication (can't remember the name). It has always been explained to me that the unremembered court case was the reason for the disclosure -- just being safe knowing the litigious nature of certain defendants. Believe it or not, some creditors really do want to stay on the straight and narrow. Maybe the case is not longer operative.

Personally, I always thought it was an over-reaction.

Another case (I think - and I cannot remember the name of it either) where the summons contained the notice but the hearing was scheduled before the 30 days allowed to the consumer to dispute. That one, as I recall, was a violation. Kinda ironic, the disclosure is technically not required but once given you are bound. Makes you wonder why you try.

There was recently a long discussion on the board that is kinda the same but somewhat different in that it speaks to continued collection activity instead of initial communication. In this case the consumer had sent a dispute and the creditor turned the account over to an attorney and a summons was served. The consumer, as you might guess, felt that this was a violation.

It is not. The FTC Staff Commentary to the FDCPA says pretty specifically that serving a summons is not continued collection activity. However, until the creditor or their attorney responded to the dispute, they were barred from collection activity (like making demands for payment, collection calls, etc.). The few of these cases I have seen, the attorney even refused to consider settlement proposals from the consumer out of a concern for triggering a violation. Seems I recall a court case out west (maybe Oregon?) where the creditor got themselves hung out for that very thing -- consumer called and apparently they argued -- consumer claimed violation -- court agreed. I have not read it in a while and might not have all the details right but I think I got the gist of it.

One final thought and I'll get off the soapbox -- all this confusion and frustration could be resolved with a thoughtful rewrite of the FDCPA. I sent my thoughts to the FTC last fall. I wish that everyone else would do the same. If enough people express their views we might actually be able to influence the FTC's report and recommendation to Congress. Given all the turmoil lately in the financial markets, I suspect that "regulation" will be the stylish buzzword in Congress. Maybe a rewritten FDCPA could be in that mix.

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This discussion may well continue on deep into the night but, as for me, I'm of the opinion that 15 U.S.C. 1692e(11) is pretty clear:

[T]his paragraph shall not apply to a formal pleading made in connection with a legal action.
This provision expressly exempts formal pleadings from a sole, particularized requirement of the FDCPA: the requirement that all communications state that they come from a debt collector. Sayyed v. Wolpoff & Abramson, 485 F.3d 226 (4th Circuit, 2007).
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