This Is A Communication To Consumer Debtors and Debt Collectors

Kudos to Michigan attorney Gary Nitzkin for a very interesting addition to his excellent Michigan Collection Law Blog in which he comments on a recent Court of Appeals for the Fourth Circuit decision (Sayyed v Wolpoff and Abramson) addressing the extent to which the FDCPA applies to attorneys during litigaiton.

If you are still reading this posting it is likely that you are either a collection attorney or you are a debtor who is doing research on the FDCPA. In either event, you have made the right choice as we are about to get to the practical part of this posting.

That the FDCPA applies to attorneys is not new. But, as Mr. Nitzkin does a fine job of highlighting, this matter involved a somewhat novel angle, as well as some carefully crafted, but ultimately rejected, defenses.

Herewith the novel angle: the allegedly violative statements were contained in the pleadings. The consumer debtor alleged that the debt collector was over-reaching in their requested relief, to which the debt collector asserted numerous defenses, including common law immunity from statements in pleadings. The court, siding with the debtor, opined that "common law immunities cannot trump the Act's clear application to the litigating activities of attorneys...".

Herewith the novel angle - part II: the debt collector attorney was unsuccessful in persuading the court that the pleadings were exempt from the FDCPA because they were transmitted to the attorney for the debtor, not directly to the consumer. The court was quite clear in striking down this argument, stating "[t]hus, plainly, the FDCPA covers communications to a debtor's attorney."

Bottom line please? True commercial litigators need not be concerned. The FDCPA has not been extended to cover collections beyond consumer debtors. But for collection attorneys, this opinion needs to be heeded as a warning that the requirements of the FDCPA should be seen as ongoing throughout the course of litigation and will even be applied to "indirect communications" to the debtor via the debtor's attorney. And for any consumer debtors reading this posting, keep in mind that a debt collecting attorney must respect your rights under the FDCPA during litigation.