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Pennsylvania consumers protections under the Fair Credit Extension Uniformity Act

In previous blogs, I have discussed the protections provided consumers under the Federal Fair Debt Collection Practices Act (“FDCPA”). The FDCPA is a powerful deterrence to unscrupulous debt collectors and unlawful debt collection practices. The FDCPA is a comprehensive and reticulated statutory scheme, involving clear definitions, precise requirements, and particularized remedies. The validity of the underlying debt is not relevant or an issue under the FDCPA. There is no exception to liability for violating the FDCPA as a result of fraud on the part of the consumer. As long as the underlying obligation is a “debt” as defined b the FDCPA, the method of collections is irrelevant. The validity of the underlying debt is irrelevant as well.

The FDCPA “provides a remedy for consumers who are subjected to abusive, deceptive, or unfair trade collection practices by debt collectors.” A single violation of the Act triggers statutory liability and remedies. Under the FDCPA, a plaintiff may collect statutory damages even if he has suffered no actual damages. The FDCPA is essentially a strict liability statute, where the degree of the defendant’s culpability is relevant only in computing damages, not in determining liability.

Under the FDCPA, consumers are enforcing the FDCPA essentially acting as private attorney generals. Because consumers are acting as private attorney generals, an award of attorney fees is mandatory in an FDCPA case. That means that the FDCPA is essentially a fee shifting statute. If a consumer can demonstrates that the FDCPA has been violated, the consumer may recover actual damages, statutory, costs and attorney’s fees. The longer the lawsuit goes, the more the consumer can recover in attorney’s fees. The threat of an award of attorney’s fees is a very effective deterrent and leads to mean settlements early in litigation.

The FDCPA is not without its limitations. One of the biggest limitations of the FDCPA is that it only applies to debt collectors as defined by the FDCPA. It does not apply to creditors or assignees of the creditor when the assignment has occurred prior to the consumer’s default on the debt obligation. Attorneys acting as debt collectors are also included in the definition of debt collector under the FDCPA.

Typically when bringing a suit under the FDCPA, a consumer will name the debt collectors, and possible law firm and individual attorney hired by the creditor to collect on the debt for any violations of the FDCPA. However the creditor may not be named under the FDCPA.

From the perspective of obtaining the greatest recovery in a lawsuit, a consumer’s best option is to target the creditor as they usually have the deepest pockets. Under Pennsylvania’s Fair Credit Extension Uniformity Act (“FCEUA”), a consumer may also sue the creditor.

The FCEUA is Pennsylvania’s analogue to the FDCPA and applies to both debt collectors and creditors. A debt collector’s violation of any provision of the FDCPA constitutes a violation of the FCEUA which in turn constitutes a violation of Pennsylvania’s consumer protection law, the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”). The FCEUA allows a consumer to sue the original creditor as well as the debt collector for any violations of the FCEUA. The FCEUA protections mirror the FDCPA’s protections.

The FCEUA also has a two year statute of limitations as opposed to the FDCPA’s one year statute of limitations. Finally, as the FCEUA is also a violation of the UTPCPL, a consumer may recover actual damages or statutory damages whichever is greater, costs and reasonable attorney’s fees. Under the UTPCPL, a court may also award treble damages. Again a very effective deterrent which can lead to early settlements.

Any action by a consumer for unlawful debt collection practices must include claims for violations of the FDCPA as well as the FCEUA. It allows the consumer to sue the creditor as well as include older violations.

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Protection Consumers Have Under Federal and State Law From Creditors and Debt Collectors.

If you have defaulted on your credit card obligations or other debts, you have likely been subjected to calls and letters and from debt collectors, attorneys, and/or creditors threatening legal action if you don’t pay. What many may not realize is that as a debtor you are afforded protection from unfair debt collection practices under federal and state law.

The Fair Debt Collection Practices Act (“FDCPA”) is a federal consumer protection statute that prohibits harassing abusive, deceptive, and/or unfair debt collection practices by debt collectors at any point in the debt collection process, including during pleadings and post judgment conduct. See 15 U.S. Code §1692. The FDCPA protects all consumers from debt collectors attempting to collect debt 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. See 15 U.S. Code §1692a.

A debt collector includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. While creditors are not included in the definition of a debt collector unless the creditor attempts to collect their own debt by using a name that indicates a third party is trying to collect the debt, attorneys are included in the definition of a debt collector under the FDCPA and are subject to a federal law suit should they violate the terms of the FDCPA.

Generally speaking, a debt collector may not communicate with a consumer in connection with the collection of any debt: 1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer (generally, only between the hours of 8:00 a. m and 9:00 p.m.); 2) contact a consumer if represented by an attorney; 3) contact consumer at the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication. See 15 U.S. Code §1692c

Additionally, a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

A debt collector can not leave a message on an operator, answering machine or third party that indicates that call concerns the collection of a debt. Under the FDCPA, only calls that reach the consumer at home between the hours of 8:00 a. m and 9:00 p.m., that inform the consumer by name who is calling, and the reason for the call are permitted.

Additionally, all calls as well as other communications must also include the required warning and disclosure that the call is to gather information for purposes of debt collection. 15 U.S. Code §1692e(11) requires that debt collectors in all initial written communication to consumers, and if the initial communication is oral, to advise that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose.

Under 15 U.S. Code §1692g, each debt collector must offer an initial debt validation statement for the debtor in the first communication with debtor, whether orally or in writing, including in a complaint if it is the first communication with the debtor. Under the statute, specific language is required and any failure to use that specific language as well as provide the name of the creditor and the amount of debt is a violation of the FDCPA.

Under 15 U.S. Code §1692d, a debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt, including, but not limited to: 1) the use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person; 2) the use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader; and 3) causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.

Under 15 U.S. Code §1692e, a debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt, including, but not limited to: 1) the false representation of the character, amount, or legal status of any debt; 2) the false representation or implication that any individual is an attorney or that any communication is from an attorney; 3) the threat to take any action that cannot legally be taken or that is not intended to be taken.

Under 15 U.S. Code §1692f, a debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt, including, but not limited to the collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.

The FDCPA provide that a consumer may recover in a civil law suit actual damages, statutory damages of $1,000.00 and costs of the action together with reasonable attorney’s fees. The FDCPA is a fee shifting statute allowing the consumer to recover his attorney’s fees in a law suit for violation of the FDCPA. Finally, all suits must be commenced within one year of the violation.

Pennsylvania’s Fair Credit Extension Uniformity Act (“FCEUA”) is Pennsylvania’s analogue to the FDCPA and essentially mirrors the FDCPA in its prohibitions. See 73 P.S.§ 2270.1 et seq, However, the FCEUA applies to creditors and debt collectors alike and allows for law suits against the actual creditors as well as the debt collectors unlike the FDCPA. The FCEUA does not allow for lawsuits against attorneys collecting debts for other parties.

A debt collector’s violation of any provision of the FDCPA constitutes a violation of the FCEUA. See 73 P.S. §2270.4. Under the FECUA, 73 P.S. §2270.5, if a creditor engages in an unfair or deceptive debt collection act or practice under this act, it shall constitute a violation of The Unfair Trade Practices And Consumer Protection Law (“UTPCPL”).  73 P.S. §201-1 et. seq.  The UTPCPL allows a consumer to recover actual damages, as a result of his use methods, act or practice declared unlawful under the FCEUA, statutory damages, treble the actual damages (at the court’s discretion), together with costs and reasonable attorney fees. See. 73 P.S. §201.9-2. All actions under the FCEUA must be commenced within two years.

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