"No matter how cynical you get, you can't keep up."
Attorneys for Wall Street and bottom on the barrel debt collectors alike are trying to get out of having to follow federal law that protects consumers by limiting the kinds of tactics that collectors can use.
Right now, the Fair Debt Collection Practices Act covers debt collecting attorneys the same as all other debt collectors. Lawyers for the collectors are trying to give themselves an immunity shield so that they can go back to using these abusive tactics without fear of being held to account by consumers.
If anything, by virtue of being attorneys, attorneys who collect debts should be held to a HIGHER standard, not allowed to break the law with impunity.
Let your congressional representatives know that you
OPPOSE ANY EFFORT TO EXEMPT ATTORNEYS FROM THE FDCPA.
Here's the text of an alert on the subject from the National Consumer Law Center. The complete text with end notes is at the end (click on it below to download file).
A bill pending in the U.S. House of Representatives, H.R. 5082, Practice of Law Technical Clarification Act of 2018 (Mooney-Gonzalez) (amending the previously filed H.R. 4550), would exempt attorneys and law firms engaged in litigation from the Fair Debt Collection Practices Act (FDCPA) and eliminate Consumer Financial Protection Bureau (CFPB) authority over them.
The changes made in HR 5082 make it even more harmful to consumers than H.R. 4550 because it would add an exemption from the FDCPA for “any other activities engaged in as part of the practice of law . . . that relate to the legal action.” This vague language expands the scope of the exemption significantly. While the bill requires attorneys to “attempt” to give the consumer legal notice of the lawsuit, abusive activities would be exempt even if the consumer never had actual notice.
Congress1 and the courts2 have recognized for decades that consumers must be protected from false, deceptive, misleading, and unfair practices by lawyers collecting debts in courts. This bill attempts to turn back the clock, and would allow collection attorneys to engage in egregious practices such as:
• Proceeding to trial without any witnesses or admissible evidence, hoping that consumers will not show up or asking the court to reschedule if they do.3
• Routinely filing court documents without confirming the accuracy of that information,4 often resulting in default judgments based on inaccurate information.
• Filing lawsuits in courts hundreds of miles away from the consumers’ homes,5 making it nearly impossible for most consumers to appear in court to defend themselves.6
* Filing lawsuits on ancient zombie debt after legal time limit to sue has expired7 and when consumers are less likely to have critical records to prove their payments.
• Seeking fees or costs that are not legally allowable,8 adding to the amount of judgments against consumers who cannot afford attorneys.
• Misusing state garnishment proceedings,9 such as by knowingly seizing Social Security or other income or property that is exempt from collection."
State Consumer Protection Laws May Not Cover Attorneys.
Maintaining coverage of attorneys under the FDCPA is important because many states do not have laws that are equivalent to the FDCPA. In these states, exempting attorneys from coverage under the FDCPA would mean that no federal or state laws would protect consumers from abusive litigation practices by consumer attorneys.10"
States Do Not Have the Capacity to Protect Consumers.
Even in states that have the legal authority, resources are insufficient to monitor the tens of thousands of debt collection lawsuits that are filed yearly in each state11 or to bring sufficient enforcement or disciplinary actions in response to abusive litigation activity.
Court and Ethical Rules Are No Substitute for the FDCPA.
To date, neither the courts nor bar associations have been effective in policing litigation abuses by collection attorneys.12
There is no reason to believe that these agencies will suddenly step up now if FDCPA sanctions against collection attorneys for litigation abuses are eliminated.
Collection Attorneys Would File More Lawsuits.
H.R. 5082 would exempt lawyers from the FDCPA for conduct in litigation that would be a violation outside of court. For example, misstating the amount owed in a lawsuit would be exempt from FDCPA liability but misstating the amount owed in a pre-litigation letter or phone call would be a violation. As a result, attorneys would be encouraged to file suit first rather than attempting to reach a resolution with consumers outside of court. This would drive a huge increase in collection lawsuits filed in state courts, further clogging the already overburdened trial courts.
H.R. 5082 Would Prohibit CFPB Supervision and Enforcement.
The CFPB has special insights into abusive collection practices through extensive national data from consumer complaints and information gleaned from industry supervision. H.R. 5082 would tie the CFPB's hands and prevent it from acting on abusive practices by attorneys or law firms when they are engaging in debt collection litigation. Previous CFPB enforcement actions against collection law firms have focused on law firms operating large debt collection “mills” churning through a high volume of lawsuits with minimal attorney oversite.13
H.R. 5082 would protect attorneys who engage in abusive litigation collection practices that hurt American consumers. We urge members of Congress to oppose this bill.
For more information, contact attorneys April Kuehnhoff (firstname.lastname@example.org or" "617.542.8010) or Margot Saunders (email@example.com or 202.595.7844).