Collection letters and dunning notices. Section 812 prohibits any party from designing and furnishing forms, knowing they are, or will be used to deceive a consumer into believing that someone other than the creditor is collecting the debt. This section of the FDCPA imposes civil liability on parties who supply illegal collection letters and forms.
- False collection/dunning letters
- Who this section applies to
- Misleading/False pre-collection letters.
- When selling collection forms does not violate this provision
- When debt collection letters do NOT violate this section
- Liability for violating this section
- Sample Debt Collection Letter
This section prohibits the practice of selling to creditors dunning letters that falsely imply that a debt collector is participating in collection of the debt, when in fact only the creditor is collecting.
This section applies to anyone who designs, complies, or furnishes the forms prohibited by this section.
A form seller may not furnish a creditor with
(1) a letter on a collector’s letterhead to be used when the collector is not involved in collecting the creditor’s debts, or
(2) a letter indicating “copy to (the collector)” if the collector is not participating in collecting the creditor’s debt.
A form seller may not avoid liability by including a statement in the text of a form letter that the sender has not yet been assigned the account for collection, if the communication as a whole, using the collector’s letterhead, represents otherwise.
A party does not violate this provision unless he knows or should have known that his form letter will be used to mislead consumers into believing that someone other than the creditor is involved in collecting the debt.
A debt collector that uses letters as his only collection tool does not violate this section, merely because he charges a flat rate per letter, if he is meaningfully “participating in the collection of a debt.” The consumer is not misled in such cases, as he would be in the case of a party who supplied the creditor with form letters and provided little or no additional service in the collection process. The performance of other tasks associated with collection (e.g., handling verification requests, negotiating payment arrangements, keeping individual records) is evidence that such a party is “participating in the collection.”
Any person who violates this section shall be liable to the same extent and in the same manner as a debt collector is liable under section 813 for failure to comply with a provision of this title.
Some debt collectors use official-looking forms that appear to be from a court, police agency, State or Federal agency and so forth to intimidate consumers.
This practice is strictly prohibited!
If a consumer discovers a debt collector using such illegal tactics, they may be able to sue the collector in civil court for substantial damages. See (civil liability – section 13)
Sample Debt Collection Letter
404 Liberty Street
Trenton NJ, 08650
August 16, 2002Creditor: McKorner Furniture
Account Number. 123456789Dear Mr. Nopay:
As of today you have not voluntarily responded to our efforts to collect the overdue payments on the above account. Therefore we must advise you that we have prepared a lawsuit which will be filed against you in exactly 7 days from the date of this letter if we have not heard from you within that time frame.We must also advise you that we fully intend to pursue garnishment of wages, liens against property, and the attachment of all financial assets and that the cost of these actions, the lawsuit and any statutory interest charges will be added to the amount owed above.
Bill A. Collector
Can you spot the FDCPA violation in the above letter?
Deceptive Statements or Threats are Common FDCPA Violations:
The federal Fair Debt Collection Practices Act (FDCPA) provides that “[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. .”. 15 U.S.C. 1692e.
Yet deceptive threats are among the most common violations of the FDCPA!
In the above letter there are four specific violations:
- It’s illegal (considered deceptive) to threaten a lawsuit in seven days when the suit will not (or cannot) be filed for several weeks;
- No lawsuit was actually intended at the time it was threatened (in other words bluffing);
- The threat of garnishment without mentioning exemptions that protect wages and other property from seizure; and
- Suggesting that the loss of all property was inevitable.
If you believe you are a victim of unfair or illegal debt collection tactics, submit your information to a FREE* Fair Debt Lawyer by clicking here for a FREE* Fair Debt Case Review or calling toll free 888-FDCPA-LAW (888-332-7252).
The debt collector may just be liable to you for statutory damages of up to $1,000, plus any actual damages suffered, plus attorney fees!