I. Recommendations for Consumer Debt Collectors
DO PROVIDE DISCLOSURES: 15 USC 1692g requires a collection attorney to provide this notice within five days after the initial communication with a consumer in connection with the collection of any debt. As a safeguard we recommend that you include the disclosure in the initial communication instead of providing it five days after the initial written communication.
DO WAIT MORE THAN THIRTY DAYS: After you send the letter, you must wait at least thirty day days from the date that the debtor received the notice. Unless you serve the letter return receipt requested, it is wise to wait at least 35 days before taking additional action.
DO PROVIDE VERIFICATION OR VALIDATION OF THE DEBT: If the debtor contacts you and requests verification of the debt, you must stop collecting on the debt until you provide verification of the debt.
DO NOT THREATEN SUIT: In the initial demand letter, do not threaten suit unless you have been given specific written authorization from your client to file suit, are able to file suit in the proper jurisdiction, and intend to file suit. 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).
AFTER THE INITIAL DISCLOSURE, DO RECITE THE MINI MIRANDA: After you send the initial communication (generally in the form of a collection letter), the Fourth Circuit has held that you and your staff must communicate the following to each consumer debtor in all subsequent verbal and written communications.
DO NOT COMMUNICATE WITH DEBTORS IN CLOSED BORDER STATES: Some states have burdensome licensing requirements, debt collection laws and consumer laws and require an out-of-state attorney to be licensed as a lawyer or as a debt collector. If you send a letter across your state border into their "closed border" and you are not licensed as a lawyer or debt collector, you may be violating their state laws.
DO NOT COMMUNICATE WITH THIRD PARTIES: A debt collector may communicate with the consumer unless the debt collector knows that that the Debtor has an attorney.
FILING SUIT: Pursuant 15 U.S.C. §1692g, communications in the form of formal pleadings in a civil action are not treated as communications. Therefore, the initial disclosures and notice provisions are not required with the summons and complaint, and pleadings.
BONA FIDE ERROR DEFENSE: Prior to April of 2010, many consumer lawyers could take some relief in knowing that there exists a bona fide error defense. 15 U.S.C. 1692k(c) provides that 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. After reading this article, you may not be as confident as Larry Bird, but I hope it provides you an incentive to familiarize yourself with the FDCPA, and provide you some guidance in representing creditors.