NCJ Number
55126
Journal
Tulane Law Review Volume: 52 Issue: 3 Dated: (APRIL 1978) Pages: 584-601
Date Published
1978
Length
18 pages
Annotation
THE PROVISIONS AND LEGISLATIVE HISTORY OF THE FAIR DEBT COLLECTION PRACTICES ACT ARE DISCUSSED, ITS SOCIAL IMPACT ASSESSED, AND CHANGES IN THE STATUTORY STRUCTURE THAT WOULD BETTER ACCOMMODATE CONSUMER INTERESTS ARE OFFERED.
Abstract
THE HISTORY OF FEDERAL CREDIT LEGISLATION IN THE UNITED STATES BEGAN WITH THE CONSUMER CREDIT PROTECTION ACT OF 1968, WHICH REGULATES THE TERMS AND CONDITIONS OF CREDIT TRANSACTIONS. WHILE MANY OPPONENTS OF THE NEW FEDERAL DEBT COLLECTION PRACTICES ACT PASSED IN 1977 ARGUE THAT FEDERAL REGULATIONS ALREADY ENCOMPASS MANY OF THE PROCEDURES PROHIBITED BY THE ACT, THIS PERSPECTIVE FAILS TO CONSIDER THE SOCIETAL BENEFITS DERIVED FROM STATUTORILY DEFINING THE RIGHTS AND OBLIGATIONS OF THE CONSUMER AND THE DEBT COLLECTOR RESPECTIVELY. THE THREEFOLD PURPOSE OF THE ACT IS TO ELIMINATE ABUSIVE DEBT COLLECTION PRACTICES BY DEBT COLLECTORS, ENSURE THAT THOSE DEBT COLLECTORS WHO REFRAIN FROM USING ABUSIVE DEBT COLLECTION PRACTICES ARE NOT COMPETITIVELY DISADVANTAGED, AND PROMOTE CONSISTENT STATE ACTION TO PROTECT CONSUMERS AGAINST DEBT COLLECTION ABUSES. IN THE ACT 'DEBT COLLECTORS' ARE DEFINED TO INCLUDE ALL THIRD PARTIES WHO REGULARLY COLLECT CONSUMER DEBTS FOR OTHERS BY USE OF INTERSTATE COMMERCE. THE ACT SPECIFICALLY PROTECTS THE CONSUMER'S RIGHT OF PRIVACY BY LIMITING THE CIRCUMSTANCES UNDER WHICH DEBT COLLECTORS MAY COMMUNICATE WITH CONSUMERS OR THIRD PARTIES CONCERNING THE COLLECTION OF ANY DEBT. IN ADDITION TO SPECIFYING WHEN COLLECTORS MAY COMMUNICATE WITH CONSUMERS, THE ACT EXPRESSLY PROHIBITS A HOST OF HARASSING, DECEPTIVE, AND UNFAIR DEBT COLLECTION PRACTICES. FURTHER, IT IS PROVIDED THAT THE CONSUMER MAY AT ANY TIME STOP THE DEBT COLLECTOR FROM COMMUNICATING WITH HIM. THE ACT PERMITS CONSUMERS TO BRING SUIT WITHIN 1 YEAR OF A VIOLATION IN ANY APPROPRIATE UNITED STATES DISTRICT COURT, WITHOUT REGARD TO THE AMOUNT IN CONTROVERSY. IN MANY STATES, A CREDITOR IS STILL ALLOWED TO CONTACT A DEBTOR'S EMPLOYER REGARDING NONLOCATION INFORMATION IN CONNECTION WITH A SPECIFIC DEBT. THIS SPECIAL PRIVILEGE ACCORDED CREDITORS, WHICH IS NOT ALLOWED THIRD PARTY DEBT COLLECTORS, MAY LEAD TO A DECREASE IN THE USE OF DEBT COLLECTORS OR A TREND TO MANIPULATE COMPANY OWNERSHIP SO AS TO TREAT A COLLECTION AGENCY AS A SUBSIDIARY OF THE CREDITOR. IF THESE POTENTIAL DANGERS TURN INTO ABUSES, THE FEDERAL TRADE COMMISSION SHOULD IMPOSE FURTHER RESTRICTIONS ON CREDITORS EITHER THROUGH TRADE REGULATIONS OR ADMINISTRATIVE DECISIONS. (RCB)