The FCCPA applies to creditors and their agents collecting their own accounts

Does a claim under the FCCPA have to be based on an “extension of credit”? Popular opinion about collection harassment suits is that they apply only to banks, credit card companies, and other lenders who extend credit to consumers. In fact, under the 1981 version of section 559.55 of the Florida Statutes, a “consumer claim” was defined as as a transaction “wherein credit has been offered or extended to a natural person . . . “ By contrast, under the 2009 version of Florida Statutes, states that a “consumer claim” is: “any 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.” To paraphrase this current statute, the FCCPA applies to any person who engages in illegal collection activity regarding any obligation to pay money if it was primarily for personal purposes. Under that broad definition, the FCCPA applied to the law firm, the attorney and his assistant in the recent case of Morgan v. Wilkins, 74 So.3d 179 (Fla. 1st DCA 2011).

Robin Morgan retained the law firm of Arnold & Wilkins. Morgan did not pay the law firm and they sued her is Small Claims Court. She counterclaimed against the law firm, as well as the attorney and his assistant, individually, for violations of the Florida Consumer Collection Protection Act (“FCCPA”). The trial court granted the counter-defendants’ motion to dismiss finding that the FCCPA only apples to debt collectors not creditors collecting their own accounts as Morgan has alleged counter-defendants were doing.

On appeal, the law firm and the individual counter-defendants conceded that the trial court was in error when it ruled that FCCPA pertains only to debt collectors, however, they argued that that the trial court reached the right result for the wrong reason because Morgan’s debt was not a debt within the purview of the FCCPA since the debt did not flow from an extension of credit. The appellate court reversed holding that that the obligation to the law firm was a debt covered by the FCCPA.

This decision makes it clear that the FCCPA applies to creditors, and their agents, collecting their own accounts.