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.

Who is a "debt collector" under Florida Law

Under Florida law, and more specifically the Florida Consumer Collection Practices Act (“FCCPA”), a “debt collector” is defined as: “any person who uses any instrumentality of commerce within this state, . . . 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 another. The term ’debt collector’ includes any creditor who, in the process of collecting her or his own debts, uses any name other than her or his own which would indicate that a third person is collecting or attempting to collect such debts.”

So, the FCCPA applies to any person or persons, collecting his/her own debts. Under that broad definition, the FCCPA would apply to a law firm attempting to collect its own fees, as well as the employees engaged in such collection activity on the law firm‘s behalf.

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 FCCPA. The law firm and the individuals moved to dismiss the counterclaim because they were not “debt collectors” under the FCCPA. Morgan responded to the motion to dismiss by arguing that the FCCPA applies not only to a collection agency, but to any party seeking to collect a consumer debt. The trial court granted the 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 counterdefendants 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. Morgan v. Wilkins, 74 So. 3d 179 (Fla. 1st DCA 2011).

Florida Consumer Collection Practices Act

In 1993, the Florida Legislature enacted the Florida Consumer Collection Practices Act ("FCCPA") which law targets unfair debt collection tactics, including those inflicted upon residential mortgage customers. The statute proscribes a broad range of deceptive, harassing, and abusive practices. It also provides a right to bring litigation against wrongdoers and to recover actual damages, costs, and attorney fees.

The following are some of the most common possible violations of the FCCPA:

    • Harassment - frequent phone calls to alleged debtors, their family and friends, repeated calls with no messages, hang-ups, lies, misleading comments, speaking in a belittling manner, embarrassing, argumentative and rude conduct are examples of harassing conduct.

    • Collecting money not owed - if an alleged debtor doesn’t owe the money it is a violation of the law for a collector to try and force the alleged debtor to pay the money. • Threats - creating a “false sense of urgency” or suggesting arrest, criminal prosecution, jail.

    • Calls at work - calls to the workplace, especially after a collector is told not to call, such as speaking to or leaving messages with a receptionist, calling the cell phone while alleged debtor is at work or calling alleged debtors direct line, is a violation.

    • Contacting 3rd parties - collectors may not contact any party about a debt without the express permission of the alleged debtor, including the spouse or any other family member, neighbors, friends, or co-workers.

    • Contact after attorney representation - once a collector is told a individual is represented by all conversations, messages, letters or any other communication must immediately stop.