What is a post-dated check for FDCPA purposes?

[MBA in Pittsburgh]

The FDCPA states that a debt collector must give not less than 3 nor more than 10 days notice to the debtor of its intent to deposit the debtor's post-dated check, so I am told. But, what is a "post dated check." Is there any case law in point? What if the debt collector gets the debtor during a telephone conversation to provide dates, check numbers and amounts on a series of payments that the debt collector with the debtor's permission will deposit in the future on the agreed upon dates. The debt collector deposits a document that appears to be a check - payable to itself - and the debt collector signs each documenmt for the debtor as "authorized signatory for maker." The debtor's own bank treats this as a check and subits photocopies to the debtor with his other paid checks. However, when the new billing statement comes in from the debt collector, the post dated check is referred to as a "payment by telephone." My question is simply: is this scenario covered by the FDCPA's requirement that the debt collector give notice before depositing the post-dated authorized document. If the debt collector never gives notice to any of the debtors from whom it solicits permission now to put through payments in the future, is this the type of thing that interests a Plaintiff's class action attorney?

[legal_loansharking]

I do not believe any attorney will look at this.... Unless the Collector is presenting post dated checks prior to the agreed upon time.

[MBA in Pittsburgh]

I guess the words in the FDCPA don't mean much to you. We know it is a violation to not send written notice of intent to deposit the documernts on the due date. My question - which you missed - is whether a post dated check can be authorized by telephone or if you have to write out a check and mail it to the debt collector to be covered by the FDCPA requirement. Obviously, you had not had the need or the opportunity to think about that in the past. Thanks anyway. My lawyers and I are unable to find any applicable case law but thinking that someone "out there" may have run up against this issue in the past, I decided to post. There are a number of reported opinions going back to 1998 in which I am the Plaintiff - I coiuuld probably teach a course on FDCPA, but that does not mean that I know everything. What is your "gut?" Do you think that a person can "create" a post dated check by telephone if the person is asked to provide a check number, an amount, and a date, along with bank and account information, . . . . or must the person actually write out and mail a check. The FDCPA [pertaining to debt collectors] and our local state statute [pertainng to creditors] each contain the same language - that it is a violation to put through a post dated check without first giving the debtor written notice not more than 10 days nor less than 3 days before it is deposited. Maybe you can think about this . . . . if any lawyers read this board and know of any applicable case law, that would be great. The issue is simply " what constitutes a post dated check. " Thank you. MBA in PITTSBURGH. April 11, 2009 at 7:50 AM here in Pittsburgh.

[BTO429]

I was under the impression that post dated checks are illegal, period.

[jq26]

I just did a bit of research on 1692 (FDCPA) on this issue for you. There is no guidance in the definitions section nor any case law on what is a postdated check. I think it is now clear why. It is not an issue because the wording of the FDCPA is all-inclusive. If you scheduled some sort of payment at least five days in the future, by check or otherwise, and the debt collector accepted it, then they must notify you of their intent to deposit such payment within 3-10 days prior to the deposit of such payment.

I would argue that whatever future payment method you chose, this MUST be included in the defintion of check or other postdated payment instrument for two reasons:

1) "check or other payment instrument" is open ended language and intended to be all-inclusive. Remedial statutes are to be interpreted broadly.

2) Allowing a definition to exclude payments comparable to a check would thwart the purpose of Congress to protect the consumer and allow debt collectors to circumvent the FDCPA by requiring non-check payments.

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§ 1692f. Unfair practices

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(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.

(4): Depositing or threatening to deposit any postdated check or other postdated payment instrument prior to the date on such check or instrument.

[MBA in Pittsburgh]

To JG26 - Thank you so very much for your response. I had not paid enough attention to the wording following "check" and you are correct, the term is all inclusive.

Now I have to determine whether I am required to proceed to Arbitration or can file a class action in state court.

MBA in Pittsburgh

[Methuss]

You cannot give a check by phone, even though that is the term they may call it. Officially giving someone the bank account and routing number to make a withdrawl is called an Automated Clearing House (ACH) Transfer.

It is NOT governed by the same rules as a written check; or as an electronic check conversion where a written check is scanned and the scan is considered as binding as the original (this is also called a Check21 conversion).

[jq26]

You cannot give a check by phone, even though that is the term they may call it. Officially giving someone the bank account and routing number to make a withdrawl is called an Automated Clearing House (ACH) Transfer.

It is NOT governed by the same rules as a written check; or as an electronic check conversion where a written check is scanned and the scan is considered as binding as the original (this is also called a Check21 conversion).

Methuss, I agree that checks are governed differently than other instruments for banking purposes. The question here is if, for FDCPA purposes, a postdated ACH transfer is a postdated payment instrument. I found no case law. But the terms of the FDCPA are intended to be all-inclusive (plain meaning of "other payment instrument") and the statute is remedial in nature (to be read broadly). The purpose is to prevent debt collectors from holding the threat of potential NSFs over the head of the debtor. The same "unfair" leverage Congress sought to target by requiring notification on postdated checks is found within future scheduled ACH withdrawals.

That would be my argument. For purposes of 1692(f), I cannot find any published case law on point. If anyone can find any, please post.