Analysis Of Fair Debt Collection Practices Act – Section 1692a

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Our first post dealt with Section 1692 which lays out why Congress had to pass the FDCPA to stop abusive debt collectors. Now we will turn our attention to a very important part of the FDCPA which is the “definitions” section (1692a). This is where we always start to see if the FDCPA applies.

“Communication” is “the conveying of information regarding a debt directly or indirectly to any person through any medium.” Sometimes the “communication” is easy to determine – the collector calls the debtor and asks for money.

But even if the communication is indirect it is still communication. So a collector asking a consumer’s brother to get the consumer a message is communication. Notice that it is “conveying” information to “any” person through “any medium” – so telling anyone in any manner about the debt is sufficient.

“Consumer means any natural person obligated or allegedly obligated to pay any debt.” This means a corporation is not a consumer. But any person who owes the debt is a consumer. And, importantly, anyone that the debt collector claims owes the debt is a consumer – even if that person does not owe the money.

Sometimes collectors get sued for harassing someone who doesn’t owe the money and they get clever. The collectors say “Well, since you don’t owe the debt then you are not a consumer so the FDCPA does not apply.” But, we know this is a bogus argument because the definition of a consumer is anyone who owes the debt or who is “allegedly obligated” to pay the debt.

Creditor does not mean “any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.”

This means that if a company collects debts and obtains an account after it has been in default, then the company is not a creditor. Not being a creditor is significant because creditors are not covered by the FDCPA but debt collectors are (defined below). So, even a mortgage company that obtains loans when they are in default can be a debt collector as opposed to a creditor.

“Debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

The debt must be a consumer debt – not a business debt. Consumer debt is debt that is primarily (does not have to be “exclusively”) for “personal, family or household purposes”. We always want to know what the debt is for to be able to decide if the debt is consumer debt that qualifies for protection under the FDCPA.

“Debt collector” means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.

Notice the use of “any” that is repeatedly used in the definition of debt collector. This definition was worded very broadly to cover any company that is collecting on debts that are in default that belong to another and court decisions make it clear that debt buyers (those who purchase defaulted debt) are also considered debt collectors and are covered by the FDCPA.

“Location information” means a consumer’s place of abode and his telephone number at such place, or his place of employment.

This is a critically important piece of information as collectors love to contact people other than the consumer to bring pressure on the consumer to pay. Their excuse for doing this is that the collectors say they are merely obtaining “location information”. Here’s the problem – they use this expression “location information” like it was a magical formula that makes everything they say to the third party somehow become proper.

The truth is that location information means only three things: home address, home phone, and place of employment. Nothing else. No matter how much collectors hate this limitation, this is still the law. And they still violate it every single day.

So, before we lay out the text of 1692a itself, let’s remind ourselves that for the FDCPA to apply we need the following items:

(1) Consumer;
(2) Consumer debt; and (3) Debt collector.

We’ll pick up on our series with a discussion of 1692b which specifically relates to collectors calling third parties to obtain location information.

Here is the text of Section 1692a “Definitions”:

As used in this subchapter-

(1) The term “Commission” means the Federal Trade Commission.

(2) The term “communication” means the conveying of information regarding a debt directly or indirectly to any person through any medium.

(3) The term “consumer” means any natural person obligated or allegedly obligated to pay any debt.

(4) The term “creditor” means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.

(5) The term “debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

(6) The term “debt collector” means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 1692f (6) of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests. The term does not include-

(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;

(B) any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;

(C) any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;

(D) any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;

(E) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; and
(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity
(i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement;
(ii) concerns a debt which was originated by such person;
(iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.

(7) The term “location information” means a consumer’s place of abode and his telephone number at such place, or his place of employment.

(8) The term “State” means any State, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any political subdivision of any of the foregoing.

In closing this section, if you have any questions or concerns about your rights related to abusive debt collectors, and if you live in Alabama, please feel free to call us at 205-879-2447 or contact us through our website. If you live outside of Alabama, we suggest you look for a local consumer lawyer at the National Association of Consumer Advocates website.

We wish you the best….

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