When Does The FDCPA Apply? The Four Requirements.


We receive many calls and emails about collection abuse but before we get into the details of any situation we first have to ask ourselves “Does the FDPCA (Fair Debt Collection Practices Act) even apply?”

It may be a terrible case of collection abuse but if the FDCPA doesn’t apply then . . . well . . . it is not a violation of the FDCPA.

It may violate some other law but not the FDCPA.

So, when does the FDCPA apply? There are four requirements.

Please note these are not “suggestions” or “it would be nice if they apply” — instead these four items must be present or there is no FDCPA claim.

1. Consumer

2. Consumer debt

3. Debt Collector

4. Violation of the FDCPA by the Collector
Here is a quick overview of these requirements:

This simply means you are a human being. 🙂 Not a corporation. Not a partnership. So if a collector has been abusive towards a business or trade association or partnership, then normally the FDCPA would not apply. Instead the FDCPA protects people from abuse.

Consumer Debt
This means personal or household debt. This is for food or medical bills or gifts or gas in your car, etc. It does not include business debt. This can sometimes get a little challenging to figure out but at least at a surface level we are looking at “Was the debt one that you intended to incur for personal or family or household reasons or was it for business purposes (either your own business or your employer)?”

Debt Collector
This means a company who either is collecting for another company or a company that has bought the debt. There are a number of factors involved but the critical one for our purposes in an overview discussion is “Was the debt in default when the alleged collection agency received the debt?”

So, a collection agency that receives your medical bill after it is late will normally be a debt collector. A collection lawfirm that receives your old credit card after you are months behind on it will also normally be a debt collector as will a “debt buyer” who buys the same debt two years after you stopped paying.

A mortgage servicing company such as LPP, BAC, PHH, Chase, Wells Fargo, etc. that does not own the loan but is “servicing it” — collecting payments, handling escrow, etc — is a debt collector . . . if it received the loan when the loan was in default.

Approaching it from the other direction, the original creditor is not a debt collector because the debt is the original creditor’s own debt and it necessarily did not receive the debt when it was in default — the debt was current when the debt was taken out . . . .

Violation of the FDCPA by the Collector
The FDCPA lists a number of prohibited actions. Sometimes you have to combine various sections to get the full picture.

As a short hand, our good friend and phenomenal FDCPA attorney Pete Barry has described the FDCPA violations in four categories:

**Being untruthful in collecting the debt;
**Being unfair in collecting the debt;
**Treating you with a lack of respect; and **Treating you with a lack of dignity.

That’s a really good summary and captures the essence of the types of collection conduct that the FDCPA prohibits.

We will circle back around and cover some of these in more detail but we hope that this overview is helpful to you.

If you live in Alabama and have any questions about collectors, or if you would like our free book on stopping abusive collectors, call us at 205-879-2447 or contact us through the contact page of our website. If you live outside of Alabama, feel free to go to NACA to see if there is a consumer lawyer in your area as we can’t help you outside of Alabama.

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