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The FDCPA – Legislative Mercy

Bill Collector Harassment

Finding Fairness in the Fair Debt Collection Practices Act: (The FDCPA)

An Example of Legislative Mercy
By: Jeffrey S. Hyslip (c) 2004

I. Introduction

Aristotle in the Nicomachean Ethics refers to social justice as “the summary of all Virtue”.[1]    Aristotle measures this justice by determining if the law responds to the concerns of the community and by determining if the law itself is just.  Aristotle defined a just law as a law that “…tends to create and to conserve happiness and the elements of happiness in the body politic.”[2]

The Bible, when referring to justice usually focuses on how the powerless, poor, and homeless are treated. [3] On judgment day, Jesus is going to look us in the eyes and bring judgment based upon, inter alia, how each person treated the poor.  Drawing from Aristotle and The Bible, Saint Thomas wrote that mercy and charity greatly determine justice. [4]  Saint Thomas explained that the law was to direct the common good and that legal justice occurs when man is in harmony with the law that benefits the common good. [5] Although The Bible explains that justice is often shown by how we treat the poor, it also displays that poor should not be given a form of perverse special treatment in or through the law.

We often conduct ourselves displaying a belief that the poor are different than us.  By classifying people based on one variable we instantly create a group containing everyone with this characteristic.  When a group is composed of people possessing characteristics that society generally frowns upon, marginalization occurs.  Because of our distaste for the poor, we indeed placed them into a group and marginalization manifested.

The marginalization and stigmatization of the poor is recurring phenomenon for most Western Civilizations throughout modern history.[6]  In American history, those with provisions have detested and ostracized those without. [7]  In eighteenth century America, laws frequently imposed responsibility upon inhabitants to assist the poor within their communities.  However, poor people whom were not members of the community found within the communities boundaries were regularly forced to leave.[8]  In fact, these communities spent immense resources forcing and keeping the poor out of their communities.  Some early communities instituted a form of “reverse welfare” and spent money simply to resist the requests and needs of the outside poor. [9]

In the eighteenth century, not only were the poorest poor shunned but also the individuals whom were unable or unwilling to pay their debts. [10] Onlookers viewed Debtors’ inability to pay as a moral failure, not a result of circumstance.  Ministers preached that God was the Great Creditor and He dammed insolvent souls into the debtor’s prison of hell. This was not a stretch of the congregations’ imagination because every colony and later every state permitted imprisonment for debt. Additionally, several colonies permitted indentured servitude and bound insolvent debtors to their creditors as to work off their obligations.[11]
The historical view of the poor did not dissipate over night.    However, in recent history America has treated the poor more decently.  Greatly as a result of the great depression, average Americans learned economic maladies could happen to anyone. [12]  This epiphany greatly influenced America’s view of the poor.  However, there was still a stigma on the poor especially those unable to pay. In recent decades, one area of much attention is way the poor are treated by their creditors.  Creditors often treat the poor unconscionably when attempting to collect defaulted debts. [13]   Evidenced through behavior including death threats and constant telephone and in person harassment, many creditors viewed debtors as deserving less than adequate respect.  Debt collectors used many unconscionable strategies to recover money for their clients. [14]  In 1977, recognizing this, congress passed the Fair Debt Collection Practices Act (FDCPA). [15]

Because Justice greatly is determined by how we treat the “least of these”, this article examines a profound act, one that shines mercy on debtors.  The act impinges on the freedom of contract and causes significant burdens on business.  Saint Thomas would be proud that Congress favored the poor over these institutions.  Additionally, the Supreme Court’s interpretation significantly broadened its scope to cover attorney collectors engaged in litigation which significantly adds protection to the poor.  Because the treatment of the poor is so important to Jesus, their treatment should be important to America.  The Fair Debt Collection Practices Act evidences their treatment is indeed important to her.

The debt collection process is rather simple.  A consumer and a creditor enter a contract.  The consumer fails to pay and the creditor pursues the consumer for repayment of the debt.  Often, this proves unsuccessful so the creditor seeks the assistance of a debt collector.  Debt collectors take many forms ranging from in house collectors, collection agencies, and collection attorneys.  Often the first thing collectors due, unless instructed otherwise by their client, is to find as much information about the debtor as possible.  Collectors use many internet sites that provide exhaustive information about the location of the debtors and their relatives, previous residences of both, tax information, income, and other concurrent debts.  Ideally collectors use the information simply for to learn more about the debtor.  These collectors often use letters, telephone calls, and personal visits to seek payment.  If the collector achieves contact with the debtor, often the collector attempts to make payment arrangements with the debtor which often includes reducing the amount owed.  This is done using a mathematical equation taking into account the probable expenses of the action.  If the collector gets the debtor to agree and pay to an amount greater than the debt minus the legal fee, the repayment plan is deemed successful.  If these attempts fail and the debtor still refuses or is unable to pay, the debt collector pursues legal action against the consumer. [16]
The Fair Debt Collection Practices Act is the principal legislation that regulates how debt collectors must proceed when engaging in the aforementioned activities. Congress obtained evidence that abusive debt collection practices contributed to a number of problems including bankruptcy, personal instability, and the invasion of the debtor’s privacy rights.  Congress passed the legislation under the Interstate Commerce Clause of the Constitution. [17]
The Act became effective on March 20, 1978. [18]  At that time, there were more than five thousand collection agencies across America holding more than five billion dollars in debt.  This figure does not account for in house collectors and collection attorneys.  The agencies generally operated on fifty-percent commission.  The more the agencies were able to squeeze out of the debtor, the more they were rewarded.  This arrangement greatly contributed to the abuse. [19]

Congress enacted the Act after growing evidence that Debt collectors were using abusive, deceptive, and unfair debt collection techniques. [20].  Congress also recognized that the laws prior to the Fair Debt Collection Practices Act were inadequate, inconsistent and that consumers were suffering. [21]  Congress further recognized that the elimination of these practices would not hinder the effective collection of debts.[22]  In fact, Congress alleged the Act would actually help collectors and place them on more equal footing. [23]

Many commentators agree the legislation was long overdue.   Many creditors viewed debtors as irresponsible and simply unwilling to pay.[24]  Many engaged in reprehensible acts.  In at least thirteen states, there was no state legislation regulating such activity so collectors were free to engage in any behavior that did not fall within a prohibited tort. This scheme was dangerous, because even with the act in effect, the fact patterns running throughout FDCPA cases are appalling.

For example, in Crossley v. Lieberman, Mary Crossley, a sixty-eight year old widow received a letter from a collector regarding a debt she owed to Fleet Consumers Discount Company.  This loan was secured by a mortgage on her home. [25]  The letter threatened legal action if a $297.79 debt was not quickly paid in full. [26]  The letter also stated that unless the creditor received payment in full within one week from the date of the August 5, 1986 letter, the creditor would sue Mary and this could result in her property being sold by the sheriff to satisfy the debt.  This threatening letter was the first time Mary was told she was in default of payment.  There were no prior requests for payments, reminders or phone calls. There was a number located at the top of the letter with instructions to call the number to obtain more information of the debt.  After calling the number and speaking with a gentleman, Mary immediately quit her job as noon-time Philadelphia School Board aid just to cash out her $800 pension she accumulated throughout the duration of her employment to pay the debt.  Mary did this because the gentleman on the phone told her she should sell her house herself and become a “bag lady” when she told him she could not pay the entire bill at once.  This instruction, taken in conjunction with the threat of the sheriff sale, led her to the conclusion if she did not pay her debt her house would be seized and sold.

After quitting her job and paying off her meager bill, Mary filed bankruptcy.  During a consultation, her bankruptcy attorney learned of the letter and the ridiculous threat it contained.  Her attorney informed her that a creditor would never file a foreclosure on a two hundred dollar debt because simply the expense of filing would quickly exceed the amount of default.  This scenario is one of many displaying the extreme pressure unconscionable collection practices placed on our nations unfortunate. [27]

The application of The Fair Debt Collection Practices Act, like all statutes, is contingent upon the statute’s definitions. [28]  The legislation focuses its protection on the debt collector’s post default communications with the debtor.  Under the act, a communication is the “conveying of information regarding a debt directory or indirectly to any person through any medium”. [29] The act covers “debt collectors” who collect “debt”. [30] The act defines a debt collector as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is to collect debt.” [31]  It does not include a creditor, an employee of a creditor, an attorney of a creditor who collects debts in the creditor’s name, or a creditor that collects debts in its own name. [32]  The definitional portion of the act was amended in ­­­­­­­­­­­­­­­­­­­­1986, most notably to remove an express exemption for attorneys who regularly collect consumer debts. [33] The act applies to “consumer debt arising out of a transaction 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.” [34]  The focus is on the underlying obligation; the fact that a creditor has taken a judgment does not change the nature of the debt. 

Because the purpose of the act is to protect debtors from unscrupulous collectors some question why the act only applies to consumer debt.  Even though Congress recognized existing laws were inadequate to protect debtors, the act only applies to consumer debtors.  However, arguably a business debtor is a more sophisticated party to a contract than a consumer debtor.
Additionally commentators question why the act only applies to third party creditors.  Many small creditors do not hire third party collectors.  Therefore, these creditors are not subjected to the act.  Furthermore, smaller creditors might depend more on every account, therefore out of desperation more likely to engage in questionable practices.  Additionally, some creditors are hiring in house collectors to take advantage of the exemption. [35]  This could pose similar problems as the former attorney exemption, discussed infra.
Restrictions on Behavior
The act places several restrictions on collectors’ ability to contact third parties. [36]  When collectors communicate with individuals other than the debtor, §1692(b) requires the collector identify himself and state that he is “attempting to confirm or correct the location of the debtor.”  If requested, the caller must identify his employer.[37]  The collector is prohibited from contacting the same person more than once, unless the person consents or unless the collector believes the person previously gave erroneous or incomplete information.

The third party communication restrictions are reasonable.  They discourage unnecessary contact with individuals other than the debtor.  Additionally, this prohibition strikes a balance between the creditor’s need to acquire the debtor’ and the debtor’s right to privacy.
The act prohibits communication by post card or communication conveying the idea that the debtor owes money. [38]  Further, if the collector knows the consumer is represented by an attorney or can readily ascertain this information, the collector may not communicate with anyone other than the attorney.  If the attorney fails to respond within a reasonable amount of time, the collector is allowed to contact third parties. [39]
In addition, the act places mandates on how the collector must communicate with the debtor. [40]  §1692(c) states that without permission from the debtor or court, the debt collector may not contact the consumer at any unusual time or place.  The section prohibits contacting the consumer at their place of employment if the collector knows or has reason to know that the consumer’s employer prohibits such communication. [41]The act forbids the collector from engaging in any conduct which the “natural consequence” is to harass, oppress, or abuse. [42]  The act gives six examples of prohibited conduct; threatening violence, threatening to harm the debtor’s reputation or property, the use of obscene language, publishing a list of debtors, the advertisement of debt in order to humiliate, using the telephone to annoy or failing to disclose the identity of the caller. [43]  

The FDCPA prohibits the use of any deceptive representations. [44]  This section prohibits the representation that the collector is affiliated with the United States, or any false representation about the character, amount, or legal status of the debt, or that any non-payment will result in legal action that the creditor doesn’t intend to take; including imprisonment, arrest, seizure, garnishment, attachment, or the sale of their property. [45]
The act’s catchall provision prohibits unfair or unconscionable means to collect or attempt to collect any debt. [46]  This section §1692(f) serves as a backstop for conduct that might slip though the other provisions. [47]  Violations include the collection or attempted collection of any amount not authorized by law. [48]

Restrictions on Venue

In addition to placing restrictions on communication, the act severely limits the proper place of venue for debt collection actions.  The venue provision in the FDCPA is an important part of the act.  Congress wanted to restrict the normal venue restrictions recognized in state and federal law. [49]  A consumer who is unable to pay an alleged debt will obviously be unable to expend the resources to defend himself in a distant forum.  For this reason, any collector who brings a legal action on a consumer debt subject to the act must bring the action in the “judicial district or similar legal entity” where the property is located, or if the transaction does not involve real property, in the judicial district or similar legal entity where the contract was signed or where the debtor lives. [50]  There is a split of authority on how to interpret this provision.

Specifically, it is unclear what entails a “judicial district or similar legal entity”.  Currently there are three ways to interpret the provision.  For example, in Fox v. CitiCorp Credit Services, the Ninth Circuit reasoned that when an action is brought in a state court, the term “judicial district” is governed by state law and therefore is synonymous with state counties. [51]  The courts have not clearly promulgated what determines a “judicial district or similar legal entity” when the suit on the underlying obligation is brought in Federal Court.  However, it seems ridiculous that federal districts would govern.  Otherwise, if a state only had one district, the creditor could subject the consumer to litigation on the other side of the state.  This does not coincide with the purpose of the venue restriction provision.
Cases interpreting the venue provision are vague.  For example, in Scott v. Jones, the plaintiff, a resident of Lynchburg, Virginia claimed the collector violated the venue provision when he filed suit against her in Richmond Virginia. [52]  Without any analysis, the court stated that venue was improper.  The only case squarely addressing the issue is Action Processional Service v. Kiggins. [53] In that case, the court interpreted “judicial district or similar legal entity” as the circuit courts as established by state law if filed in state court but federal judicial districts as established under federal law if action is filed in federal court.  However, this statement was dicta because the action on the underlying obligation was filed in state court. [54]  Therefore, this case does not answer clarify the issue.

On its face, the venue restriction appears reasonable.  It is reasonable to prevent collectors from bringing suit in forums far from the debtor.  However, the consequence of the provision is to force the party that was wronged (the creditor) to travel to inconvenient forums.  The creditor did nothing wrong, it was the debtor whom breached the contract.  According to Saint Thomas, legal justice occurs when man is in harmony with the law that benefits the common good.  Looking at this provision alone, it may be questionable if it benefits the common good.  There are two competing sides, the individual debtor and the creditor.  The debtor has an interest in not traveling to far away forums.  He could not afford to meet his monetary obligation, so he will not have the money to travel. 

The competing side is most likely a corporation or a business organization.  Its sole function is to increase the profit of the investors.  By forcing the corporation to travel to far away forums, this profit is reduced.  This appears unfair because it is already suffering loss on the debtors default.  However, the right for the accused to defend against accusers outweighs the corporation’s necessity for profits.  The right is better for the common good than wealth maximization.

Affirmative Obligations
There are also several affirmative obligations the act places on collectors.  A significantly debated portion of the act is §1692(e)(11).  Commentators and Judges refer to this provision informally as the Miranda Requirement. [55]  Mirroring criminal Miranda warnings, the §1692(e)(11) warnings tell consumers they are talking to an adverse party and the effect of their willingness to engage in reciprocal dialogue.  This disclosure requires the collector to divulge two things; that the debt collector is attempting to collect a debt, and that any information the collector obtains will be used for that purpose.
The original version of the act did not express when this disclosure was required.  The circuits were wholly inconsistent with the application of this provision.  For example, the Ninth Circuit stated that the collector must include the notice in the initial communication but not in any communication thereafter.  The Ninth Circuit was the only court that followed this interpretation. The other circuits held that any communication, whether in writing, in person, or on the telephone, needed to begin with this disclosure.  
When the act was amended, Congress assented to the Ninth Circuit and required the full Miranda warning only in the initial written or oral communication. [56]  However, in subsequent communications the collector must state that they are a debt collector.  This is to remind debtors of the initial disclosure. 

Another provision requires the debt collector to send the consumer certain information in writing either with the initial communication or within five days after. [57]  Congress recognized that debt collectors sometimes make mistakes in attempting to collect debts. [58]  Because the act only covers collectors not employed by the creditor, there is often a communication stream reminiscent to the childhood game “Telephone”.
The game begins with one person whispering in the ear of their neighbor who in turn, hopefully, whispers the exact phrase in their neighbor’s ear.  This exercise continues down a line of multiple people.  Without exception, by the time the last person whispered the sentence into the final ear, the information morphed into an unrelated, sometimes unintelligible conglomeration of words. 
  Similarly, the creditor and collector frequently misspoke.  Causes of the misinformation include the large bureaucracy of commercial lenders to insufficient methods of communication between the creditor and collector.  As a result, Congress requires the collector to provide the debtor certain details about the debt, including notice about the consumer’s right to have the details verified.  This ensures the information the collector possesses is accurate. [59]   The required notice must contain (1) the amount of the debt, (2) the name of the creditor to whom the debt is owed, (3) a statement that unless the consumer disputes the validity of the debt within thirty days after receiving the notice the debt collector may assume the debt is valid, (4) a statement that if the debtor contacts the debt collector within thirty days after receiving the notice, the debt collector will obtain verification of the debt and (5) a statement indicating that the consumer may request, in writing, the original name and address of the original creditor, if different from the current one. [60]   This disclosure has caused heated debate.[61]  Debt collectors are usually rated on two factors; the amount the recovery and the timeframe in which they recover it.  The thirty days requirement angers collectors because it causes their timeframes to increase, which affects their overall rating with clients.  The question then becomes, what, if anything, can the debt collector do within those thirty days.

The doctrine dealing with this question is entitled the overshadowing doctrine.  Under the overshadowing doctrine, a court will find the notice requirement violated if a statement in the required letter containing the validation notice impliedly or expressly contradicts with the notice. [62]  While an express contradiction is easily defined, determining if statement impliedly contradicts with the provision is more difficult. 

In Teran v. Kalpan, in the letter to the debtor, in addition to providing the thirty day provision, the collector advised the debtor to make an immediate telephone call or the collector would recommend taking legal action to his client. [63]  The court found this did not overshadow the thirty day provision.  However, under Graziano v. Harrison, the court found the provision overshadowed when the collector threatened legal action in ten days unless the consumer paid the debt. [64]   The court explained the debtor might have overlooked his thirty day statutory right due to the additional threatening language. [65]  The inconsistency between the courts applying the overshadowing doctrine necessitated a court to clearly state the standard of determination. [66]

The court in Barlett v. Hilbel assisted with this task.  The court clearly promulgated ways in which the requirement could be violated; (1) by an actual contradiction arising out of a logical inconsistency, (2) an overshadowing achieved by the placement or type of the validation notice; (3) the collector’s failure to explain an apparent though not actual contradiction between the period for payment and the period for verification. [67]  To clarify the last element, the element most commonly violated, the court included model language in its opinion.  The language clearly stated the law did not require the collector to wait until the end of the thirty day period before bringing action on the debt.  However, if the debtor exercises his validation right, the collector must halt all further collection activities until verification.  The clear promulgation substantially places the debtor in a good position because previous to the holding, collectors regularly overshadowed the debtor’s validation right.


There are three main types of damages permitted under the statute.  The statute permits statutory damages up to $1,000.  A debt collector who violates any provision of the act is liable for the debtor’s actual damages. [68]  Damages under this provision most commonly include damages for emotional distress, humiliation, and embarrassment.  In one case, a jury awarded 15,000 as actual damages even though the consumer suffered no monetary loss.
Most significantly, the act now permits a court to award the costs of the action and reasonable attorney fees for the successful prosecution of a violation. Congress permitted the award of attorney fees to encourage consumers to enforce the act.  Additionally, the court will require the plaintiff to pay the cost of defending the suit if the suit is found to be in bad faith.  In the Fifth Circuit, a defendant is not liable for attorney fees where no actual or statutory damages are awarded. [69]  However, courts have been quick to limit the amount recoverable under this section. [70]  In Lee v. Thomas and Thomas, a court refused a successful debtor request for attorney fees that constituted economic waste. [71]  In Lee, the defendant debt collector realized he made a technical mistake and quickly offered a $2,000 settlement offer.  The Plaintiff rejected this offer.  However, several months later the Plaintiff accepted another offer in the amount $1,200 plus costs and attorney fees.  The Plaintiff then petitioned for over $12,000 in attorney fees.  The judge refused to compensate the attorney for any of the fees incurred after his client refused the first settlement offer. 

However, just because a court may look skeptically at the petition for attorney fees, does not mean that a court will forbid them.  For example, in Armstrong v. Rose Law Firm the court refused actual damages and limited recovery to the $1,000 statutory damages. [72]  However, when the successful attorney made impeccable displayed the time spent and other expenses, the court permitted recovery in excess of $43,000 dollars. [73]

Defenses to Violation
Because the FDCPA is a strict liability statute, a debtor does not need to prove that a violation was intentional or negligent.[74]  However, the FDCPA does contain an affirmative defense provision. [75] Under 1692(k)(c), a debt collector may not be held liable if they show the violation was not intentional and resulted from a “bona fide error notwithstanding the maintenance of the procedures reasonably adapted to avoid any error”. [76]  If the debt collector properly shows adequate precautions in place including staff training, hand books, instruction manuals, and steady oversight, the collector may have an available defense. [77]  However, the successfulness of the defense is uncertain, therefore, collectors cannot rely on their defensive procedures to absolve them of liability.  [78]


The Supreme Court’s interpretation of the FDCPA has significantly broadened its scope.  As stated supra, the original version of the act explicitly excluded attorneys from regulation. The exclusion caused problems in the debt collection community because attorneys began engaging in activities barred by the act. [79]  Attorneys even advertised to potential clients stating that their exemption gave them an advantage over other collectors. [80]  This caught Congress’ attention and led a repeal of the exemption.

After the repeal, a large amount of litigation erupted to clarify which attorneys were subject to the act. [81]  Under the FDCP, “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. [82]  To qualify as a debt collector, an attorney must be a person who regularly uses any instrumentality of interstate commerce or mails in any business the principal purpose is the collection of debts, or who regularly mails in any business the principal purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly or indirectly debts owed or due or asserted to be owed or due to another. [83]  After the exemption was repealed, a strict reading of the statute implies that an attorney only falls under the purview of the statue when collecting a debt, i.e. acting as a debt collector, not when he was performing legal tasks. [84]  Because the act was originally passed covering collectors who could not file a law suit, conduct discovery, etc. it seems reasonable that the legislature did not want to regulate these activities.   The FTC in a nonbonding statement subscribed to this interpretation and stated attorneys were only covered when conducting debt collection activities, not when performing legal tasks. [85]  However, this statement gave no indication as to what the FTC thought were tasks legal in nature. [86]  Ultimately, due to the confusion Congress left interpretation to the circuits.

The Circuits disagreed about which types of attorney conduct were covered.  The Sixth Circuit found a “litlgation” exception for attorneys who were engaged in the practice of law.  The Sixth Circuit, in Green v. Hocking, recognized this exception when an attorney, on behalf of his client, filed a complaint seeking $304.83 in past due bills.  The debtor contested the amount alleged in the complaint because the attorney, in calculating the amount due, included interest calculated at eighteen percent.  The attorney realized that there was no contract permitting the rate and quickly amended his complaint.  After the conclusion of the action, the debtor sued the attorney for violating attempting to collect an unauthorized amount. The attorney moved for and the court granted summary judgment recognizing while engaged in litigation, attorneys are immune from the collection provisions of the act.

The debtor appealed and on appeal the attorney cited two theories in support of his arguments. First, the debtor stated that activities purely legal in nature are not within the purview of the act and even if litigation activities fell under the act, his behavior was a bone fide error.  The Sixth Circuit expressly found a litigation exception for attorneys engaged in the practice of law.  Because the misrepresentation took place in a complaint, and the complaint was part of litigation, the act did not apply to this action.  The Sixth Circuit held that if they refused to find this exception the outcome of the statute would be ridiculous. The statue, the Sixth Circuit claimed, was enacted to prevent harassment and deception in debt collection.  The court refused to expand the act to cover attorneys engaged in litigation. Otherwise, a simple misstatement made by an attorney during a court proceeding would subject the attorney to a FDCPA sanctions.

Fourth Circuit Jurisprudence was at odds with the Sixth Circuit holding.  In Scott v. Jones, the court refused to recognize an exception for certain debt collectors simply because they hold law degrees. [87]  The court held that acts creating liability for a debt collector created liability regardless of more specific inquiries as to what type of debt collector they are. [88]

Additionally, the Ninth Circuit addressed the availability of the litigation exception.  In Fox v. Citicorp Credit Services, the plaintiff defaulted on a consumer contract with CitiBank. [89]  Citibank then sent the account to CitiCorp Credit Services, Inc.  This subsidy of CitiBank then sent the file to one of their privately retained attorney.  During discovery the attorney violated the FDCPA.  However, he argued based on the legislative history of the act, the intent of the legislature in repealing the attorney exception was to reach attorneys that engaged in traditional debt collection activities.  The court scoffed at the attorney and refused to use the removal of the provision to assist in the interpretation of the statue. [90]  The attorney alternatively argued the presence of the exception based on the FTC Commentary explicitly stating the exemption existed. [91]  The court addressed the non-binding nature of the opinion and ruled that the exception did not exist. [92] 


This uncertainty continued throughout the circuits.  In 1980, events started unfolding that would clarify the issue once and for all.  In that year, Darlene Jenkins signed a contract with a bank to purchase an automobile. [93]  The contract stated that Ms. Jenkins had to adequately insure the vehicle at all times and if she didn’t, the bank had the right to purchase insurance on her behalf. [94]  When Ms. Jenkins failed to insure the car, the bank purchased the insurance on the car and insurance on her default. [95]  The bank then sought the services of Mr. Heintz to collect this amount from Ms. Jenkins.  Mr. Heintz wrote a letter to Ms. Jenkins indicating this amount was owed and filed a suit for this amount.  Ms. Jenkins objected to this amount.  Ms. Jenkins claimed the insurance purchased, was in violation of the agreement.  In this regard, Ms. Jenkins brought a FDCPA violation against Mr. Heintz for violation of §1692(f), which prohibits the collection of an amount not authorized by agreement or law.
Mr. Heintz filed a motion to dismiss for failure to state a claim.  Mr. Heintz argued that he could not have violated the FDCPA because when he wrote the letter and filed the complaint he was acting engaged in litigation activities. [96]   In an unpublished district court opinion, the court recognized the exemption and granted Mr. Heintz’s motion based on case law, legislative history and the FTC Official Commentary.  Additionally, the judge attempted to reconcile the holdings of Green v. Hocking and Scott v. Jones.  The Court stated that courts must take into account a variety of factors to determine if the act applied to attorneys.  Additionally, the court looked at the legislative history and stated that the repeal of the attorney exemption was solely intended to prevent the ills such as the late night phone calls, calls to consumer employers, and the other actions that manifested by attorneys before the attorney exemption.  The judge said the original drafters wanted to give special privileges to attorneys; however, attorneys abused those privileges.  The judge implied that the removal of the exemption was only to shut the doors of those privileges, not to make attorneys completely subject to the Act.   Furthermore, looking at the circumstances, the judge claimed that the letter was simply a cordial attempt to settle a debt and therefore was not one of the ills the exemption attempted to prevent. [97]

Ms. Jenkins appealed and the Seventh Circuit Court of Appeals reversed and remanded the case.  In support of reversal, the Court of Appeals recognized a Motion to Dismiss Failure to State a Claim should only be upheld if it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim.  The court pointed to the Act’s language defining a debt collector as one that regularly engaged for profit in the collection of debts owed by consumers.  The court stated if Ms. Jenkins could prove that Mr. Henitz met this definition she would be entitled to relief.  The court additionally stated that attorneys engaged in debt collection activities cannot escape FDCPA liability simply because they have a law license.  Mr. Heintz filed a petition for Certiorari in the United States court, which the court granted.  On February 21, 1995 the Supreme Court heard oral arguments and the rendered a decision less that two months later. [98]  The Supreme Court, relying on the plain language of the act affirmed the lower court’s ruling.  The Court refused to give legislative history or the FTC Commentary any weight in rendering the decision. [99]

This case is widely criticized by commentaries.  One criticism is that the act was never meant to cover post petition activities. [100]  Under this complaint, attorneys are now disadvantaged more than the lay debt collector. [101]  Additionally, some say there were adequate safeguards in place that the act was not needed to cover post-petition activities of attorneys. [102]  These safeguards include common law provisions, The Codes of Professional Responsibility, Federal Rule of Civil Procedure 11. [103]

Under this school of thought, the Codes of Professional Responsibility is adequate to protect consumers against the ills the Supreme Court interpreted the act to cover.  For example, under §1692(c), the FDCPA prohibits an attorney from contacting a debtor that is represented by counsel. [104]  Similarly, in the Model Rules of Professional Conduct a provision states that a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter.

Another mechanism that may warrant the inapplicability of the FDCPA to post-petition activities is Federal Rule of Civil Procedure 11. [105]  Under this rule, sanctions may be brought against an attorney who makes improper allegations in pleadings or other court documents. [106]  Additionally, Rule 11 imposes a duty on attorneys to certify that they have conducted a reasonable inquire and determined that anything filed is grounded in fact and not filed for an improper purpose.  This rule would take the bite out of many provisions the FDCPA now oversees due to the attorney post petition stuff.  Proponents of the litigation exception argue because there are other rules regulating attorneys accomplishing the same things, the FDCPA is unnecessary and over inclusive.

Since the opinion was handed down in Heintz v. Jenkins, debt collection has changed immensely. [107]  The FDCPA is now being applied outside of the traditional debt collection arena. [108]  For example, real estate attorneys are now often subjected to the FDCPA when they assist in a foreclosure action.  Despite the activity that Congress intended to address, case law indicates that attorneys are subjected to liability for technical violations rather than for conduct the FDCPA desires to alleviate.[109]

Michael, A Creditors Rights Attorney located in Columbus, Ohio expressed at great lengths with the author the ills of Heintz v. Jenkins on his practice. [110]  Michael stated that a large number of attorneys have created a niche practice simply searching for technical violations in the FDCPA.  He states he receives a surprising amount of unwarranted threats from attorneys alleging technical violations.  Unfortunately, Michael claims, this has given debtor’s attorneys undeserved bargaining power in the suit involving the underlying obligation.  Michael explains sometimes it is difficult to explain to his clients that it may be wise to settle for an amount less than the underlying obligation to save the cost of litigating the frivolous claim.  When I mentioned that the successful litigant under the FDCPA is awarded attorney fees, he quickly agreed with me and very articulately explained that time is money and the time he required defending a suit would cause disaster with his practice.  He expressed that although the loser is awarded attorney fees under the FDCPA, this would not put him in the same position, but for the allegation, because of the time expended outside of the office.

I proceeded to ask Michael if he believed the FDCPA was necessary.  Michael answered affirmatively.  Michael expressed that he imagined many creditors acted with unnecessary force prior to the FDCPA.  However, he stated if the purpose of the FDCPA as promulgated is to level the playing field without causing undue burden on debt collectors, he thinks the application of the act has possibly undermined its creation.  Michael stated that the time spent training in compliance with the act, double checking for typographical errors, and other necessary requisites is unduly burdensome.  He stated that he has hundreds of documents flowing through his office daily because his practice, like all collection practices is a volume business.  Michael stated that he expends a lot of energy simply making sure there are no typographical errors in his pleadings.  A simple decimal point or including a penny too much in the prayer for relief is an automatic FDCPA Violation.  Michael does not believe Congress intended such a result.

The FDCPA is a powerful piece of Legislation.  Prior to its existence, the poor and the underrepresented in our country were taken advantage in alarming proportions.  Instead of recognizing that sometimes debtors do not pay because they are unable, collectors pursued them in unconscionable ways.  However, the unequal treatment of the poor is nothing exclusive to modern history.  Further, the unequal treatment will most likely continue.  However, as Aristotle said, a just law is a law that brings happiness to the common good.

[1] Aristotle, The Nicomachean Ethics of Aristotle (1982).
[2] Id.
[3] See e.g. Exod. 23:1-9; Psalm 82:2-4; Isa. 1:17; Amos 5:11-12, 21-24; Jer. 22:1-4.
[4] saint thomas aquinas, summa theologica.
[5] Id.
[6] Thomas Ross, The Rhetoric of Poverty: TheirImmorality, Our Helplessness, 79 Geo. L. J. 1499 (1991).
[7] Bruce H. Mann, Failure In The Land Of The Free, 77 Am.Bankr.L.J 1 (2003).
[8] Id.
[9] Id.
[10] Id.
[11] Id.
[12] Thomas Ross, The Rhetoric of Poverty: TheirImmorality, Our Helplessness, 79 Geo. L. J. 1499 (1991).
[13] Id.
[14] William P. Strout, Heintz v. Jenkins just an unsound decision, 49 CounsumerFinL.Q. 310 (1995).
[15] Id.
[16] Taken from personal experience of author
[17] 15 U.S.C.A. 1692
[18] William P. Strout, Heintz v. Jenkins just an unsound decision, 49 CounsumerFinL.Q. 310 (1995).
[19] Brian Keith Faulkner, Third Party Communications Clarified in the Fair Debt Collection Practices Act. 22 Campbell L. Rev. 369 (2000).
[20] 15 U.S.C.A. 1692
[21] Id.
[22] Id.
[23] 15 U.S.C.A. 1692(e)
[24] Elwin Griffith, The Meaning of Language and the Element of Fairness in the Fair Debt Collection Practices Act, 27 U.Tol.L.Rev. 13, (1995).
[25] Crossley v. Lieberman, 868 F.2d 566, (3rd Cir. 1989).
[26] Id.
[27] Id.
[28] Jule J.R. Huygen, After the Deal is done, Debt collection and credit reporting, 47 A.F.L. Rev. 89 (1999).
[29] 15 U.S.C.A. 1692(a)(2)
[30] 15 U.S.C.A. 1692(a)(6)
[31] Id.
[32] Id.
[33] Christopher A. Golden, Fair Debt Collection Practices Act: Has Attorney Liability replaced consumer protection? 45 Jan Fed Law 20) (1998).
[34] 15 U.S.C.A. 1692(a)(5)
[35] Christopher A. Golden, Fair Debt Collection Practices Act: Has Attorney Liability replaced consumer protection? 45 Jan Fed Law 20) (1998).
[36] 15 U.S.C.A. 1692(a)(5)
[37] 15 U.S.C.A. 1692(b)(1)
[38] Id.
[39] 15 U.S.C.A. 1692(c)
[40] Id.
[41] Id.
[42] 15 U.S.C.A. 1692(d)
[43] Id.
[44] Id.
[45] 15 U.S.C.A. 1692(e)
[46] 15 U.S.C.A. 1692(f)
[47] Jule J.R. Huygen, After the Deal is done, Debt collection and credit reporting, 47 A.F.L. Rev. 89 (1999).
[48] 15 U.S.C.A. 1692(f)
[49] 15 U.S.C.A. 1692(i)
[50] Id.
[51] Fox v. CitiCorp Credit Servc., Inc. 15 F.3d 1507 (9th Cir. 1994).
[52] Scott v. Jones 964 F.2d. 314. (4th Cir. 1992).
[53] Fox v. CitiCorp Credit Servc., Inc. 15 F.3d 1507 (9th Cir. 1994).
[54] Action Processional Service v. Kiggins,  458 N.W2d  365 (1990).
[55] Christopher A. Golden, Fair Debt Collection Practices Act: Has Attorney Liability replaced consumer protection? 45 Jan Fed Law 20) (1998).
[56] 15 U.S.C.A. 1692(j)
[57] Id.
[58] Id.
[59] Elwin Griffith, The meaning of Language and the Element of Fairness in the Fair Debt Collection Practices Act, 27 U.Tol.L.Rev. 13, (1995).
[60] 15 U.S.C.A. 1692(j)
[61] Christopher A. Golden, Fair Debt Collection Practices Act: Has Attorney Liability replaced consumer protection? 45 Jan Fed Law 20) (1998).
[62] Elwin Griffith, The Search for More Fairness in the Fair Debt Collection Practices Act. 37 E. Rich. L. Rev. 511 (2003).
[63] Teran v. Kalpan, 109 F. 3d. 1428 (9th Cir. 1997).
[64] Graziano v. Harrison 13 F. Supp. 2d 1037 (1998).
[65] Id.
[66] Id.
[67] Barlett v. Hilbel 128 F.3d 497 (7th Cir. 1997).
[68] 15 U.S.C.A. 1692
[69] Barner v. Jones 128 F.3d 497 (7th Cir. 1997).
[70] Lee v. Thomas and Thomas 109 F3d 302 (6th Circuit 1997).
[71] Id.
[72] Id.
[73] Armstrong v. Rose Law Firm PA, 2002 WL 31050583 (D. Min 2002.)
[74] Bentley v. Great Lakes collection Bureau 6 F.3d 60 (2nd Cir 1993).
[75] 15 U.S.C.A. 1692(k)
[76] Id.
[77] Id.
[79] Elwin Griffith, The Search for More Fairness in the Fair Debt Collection Practices Act. 37 E. Rich. L. Rev. 511 (2003).
[80] Id.
[81] 15 U.S.C.A. 1692(a)(3)
[82] Id.
[83] 15 U.S.C.A. 1692(a)(6)
[84] Christopher A. Golden, Fair Debt Collection Practices Act: Has Attorney Liability replaced consumer protection? 45 Jan Fed Law 20) (1998).
[85] Id.
[86] Id.
[87] Scott v. Jones 964 F.2d. 317 (1986).
[88] Id.
[89] Fox v. CitiCorp 15 F.3d. 1510 (9th Cir. 1994).
[90] Id.
[91] Id.
[92] Id.
[93] Heintz v. Jenkins, 514 U.S. 291 (1995).
[94] Id.
[95] Id.
[96] Id.
[97] Id.
[98] Lynn A.S. Araki RX For Abusive Debt Collection Practices, Amend the FDCPA, 17 U.Haw.L.Rev. 69 (1995).
[99] Id.
[100]  William P. Strout: Heintz v. Jenkins…Just an Unsound Decision 49 Counsumer Fin.L.Q. Rep. 310 (1995)
[101] Id
[102] Id
[103] Id
[104] Lynn A.S. Araki RX For Abusive Debt Collection Practices, Amend the FDCPA 17 U.Haw.L.Rev. 69 (1995).
[105] Fed R. Civ Pro. 11; William P. Strout: Heintz v. Jenkins…Just an Unsound Decision 49 Counsumer Fin.L.Q. Rep. 310 (1995)
[106] Id.
[107] William P. Strout: Heintz v. Jenkins…Just an Unsound Decision 49 Counsumer Fin.L.Q. Rep. 310 (1995)
[109] Carroll v. Wolpoff,  961 F.3d 459 (2nd Cir. 1992).
[110] Interview on 11/12/04