Overview of the Law Governing Debt Collection Practices – Part III

FDCPA and CFDCPA No No’s!

1. Harassment or abuse. DON’T DO IT! The FDCPA 15 U.S.C. §1692d and the CFDCPA both prohibit conduct likely to harass, oppress, or abuse a person. Section 5-5-109, C.R.S. prohibits harassment and “unconscionable debt collection” practices. The C.R.P.C. requires a lawyer to respect the rights of third persons. Rule 4.4. The following conduct is harassment under Colorado law (§5-5-109(4), C.R.S.):

· Communicating with the debtor or his family at frequent intervals;

· Communicating with the debtor or his family at unusual hours;

· Communicating with the debtor or his family under “other circumstances so that it is a reasonable inference that the primary purpose of the communication was to harass the consumer;”

· Causing or threatening to cause injury to the consumer’s reputation or economic status;

· Using or threatening to use force against the consumer or a member of the consumer’s family.

2. False or misleading representations and unfair practices. Prohibitions against misleading representations both in writing and in collection calls are at the heart of the FDCPA 15 U.S.C. §1692e and f and the CFDCPA as well as §5-5-109 and §§12-14-106, 107 and 108, C.R.S. As stated above, a primary prohibition is against a non-lawyer acting like a lawyer or sending a communication on an attorney’s letterhead. The misrepresentation analysis does not turn on what the debt collector knew, but rather on “whether the debt collector’s communication would deceive or mislead an unsophisticated, but reasonable, consumer.” Bragg, O. Randolph, The Fair Debt Collection Practices Act 15 U.S.C. §§1692 ET SEQ., Practising Law Institute March-May 2007, Corporate Law and Practice Course Handbook Series, pp. 470-71. According to Bragg, common misrepresentations include:

– False representation of the character, amount or legal status of the debt.

– Representation or implication that nonpayment will result in arrest, imprisonment, seizure, garnishment, attachment, or sale of the consumer’s property.

– Use of any name other than the true name of the debt collector.

– The false suggestion of affiliation with governmental agencies.

– Representation that the debt collector is part of a credit reporting agency.

– References to civil penalty, attorney’s fees, and overstated interest calculations in collection letters where the statements are contrary to state law.

– A non-lawyer’s letter threatening referral to an attorney for litigation if payment was not made in 5 days.

– Collection letter that state the debt must be paid in the next 30 days in order to qualify for a discount.

– Treble damages and attorney fees not reduced to judgment cannot be stated or demanded in the initial communication.

- A tenant agrees to waive or forego rights or remedies under the article;
- Any provision authorizing any person to confess judgment on a claim arising out of the rental agreement;
- Any provision agreeing to the exculpation or limitation of any liability of the landlord arising under law or to indemnify the landlord for that liability or the costs connected therewith.

The lawyer is responsible for the conduct of nonlawyer assistants over whom the lawyer has direct supervisory authority. The lawyer must assure that his assistants abide by the law and the C.R.P.C.