TCBA Bundled Event Sponsorship Opportunities

@cartoonresouce/AdobeStock

Without getting too deep in the weeds on the FDCPA, suffice it to say one local landlord lawyer commented the collection of rent and eviction is not a “debt” for purposes of the FDCPA. The Second Circuit respectfully disagrees and ruled the collection of back rent falls within the FDCPA’s definition of a “consumer debt.” Romea v. Heiberger & Associates, 163 F.3d 111, 114 (2nd Cir., 1998). Further, Romea held the statutory notice (three-day demand notice required by New York law, similar to Oklahoma’s five-day notice to quit) was a “communication” under the FDCPA (id., at 116) and was not legal process subject to exclusion (id., at 117). Thus, the demand notice may require the FDCPA notices if not given by the owner of the property. Also, note, the issue involving the FDCPA’s applicability to litigating attorneys was addressed in Heintz v. Jenkins, 514 U.S. 291, 115 S.Ct. 1489, 131 L.Ed 2d 395 (1995), which extended the FDCPA’s coverage to “... attorneys who ‘regularly’ engage in consumerdebt-collection activity, even when that activity consists of litigation.” Id., at 1493. Where is the exposure? The FDCPA prohibits conduct related to debt collection if it has, as its natural consequence, the harassment, oppression, or abuse of any person (§ 1692d), it prohibits the use of false, deceptive or misleading representations or means in collecting a debt (§ 1692e), and prohibits a debt collector from using unfair or unconscionable means to collect or attempt to collect a debt (§ 1692f). Each of these sections identify or list specifically proscribed acts, without limiting the generality of these concepts. It is a violation of the FDCPA to fail to give the notices required by the FDCPA § 1692e (the “minimiranda”) warning and debt verification notice (§ 1692g. (a)(1)-(5)).

Most significantly, however, it is a violation of the FDCPA to attempt to collect a debt that is not owed. § 1692f prohibits the “…[c]ollection 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. The FDCPA also provides for concurrent jurisdiction between federal and state courts without regard to the amount in controversy. § 1692k(d). An FDCPA suit is not a compulsory counterclaim in a state action to collect the underlying debt, as the two claims have no logical relation to one another. Peterson v. United Accounts, Inc., CA 8 (N.D.) 1981, 638 F.2d 1134 (among others). Enforcement by the Federal Trade Commission and the Consumer Financial Protection Bureau (or, the “CFPB”) is authorized. See, § 1692l(a), (b)(6). Civil enforcement may involve a class action (§ 1692k(a)(2)(B)). If there is a bright spot, it is that there is a one-year limitation calculated from the time of the violation within which to bring and FDCPA action. Then, there is the issue of attorney fees for the successful debtor’s counsel, which is a force, if not a driving force, in FDCPA litigation. See, § 1692k.(a) (3). While damages may be limited, attorney fees are not. See, In re: Martinez, 2001 WL 980277 (Bankr. M.D. Fla. 2001), where the bankruptcy court awarded the maximum statutory damages of $1,000.00, no actual damages, and over $29,000 in attorney fees and costs (debtor’s counsel had sought over $100,000 in fees and costs). Martinez is not an isolated decision in the scheme of FDCPA litigation. Whether a tenant will prevail is not the ultimate or practical issue. Having defended a number of FDCPA cases for the debt collector, even if the trial court finds the suit was brought in bad faith and for the purpose of harassment allowing the court to award the debt collector reasonable attorney fees (§ 1692k.(a)(3)), the debt collector will have to collect those fees against someone who likely has no reasonable probability of having any non-exempt assets, much less enough to satisfy the debt collector’s attorney fees. The “debt collecting” lawyer will still have to pay his or her attorney. Remember, when you’re dealing with a broke person, you’re dealing with a broke person. That’s the cleaned up version of the old saying. It will cost the debt collector.

Think twice about executing those affidavits, be sure you know what the numbers are that comprise the total amount sought in the FED action, and whether they are authorized.