FDCPA Amendments

by Richard Alderman

Changes in the Fair Debt Collection Practices Act (FDCPA) have been approved by the U.S. Congress and sent to the President to sign into law. The amendments were part of the Financial Services Regulatory Relief bill, which was passed this weekend.

Some of the key changes include clarification around “mini-Miranda” disclosures and legal codification that allows agencies to collect during the 30-day validation period.

The mini-Miranda clarification comes in updating protocol for legal pleadings and other communications, such as IRS 1099-C (cancellation of debt) forms. One of the new amendments states, “A communication in the form of a formal pleading in a civil action shall not be treated as an initial communication.” Also, communications that do not seek the payment of a debt, like 1099-C forms or Gramm-Leach-Bliley Act privacy notices, will no longer be considered an initial communication and will not require mini-Mirandas.

The FDCPA was also specifically amended to allow for the collection of a debt during the 30-day violation period, unless the consumer has an active written dispute regarding the debt.

The new amendments also include a provision that certain bad check enforcement firms, such as companies that run pretrial diversion programs for bad check offenders, will not be legally defined as debt collectors for purposes of the FDCPA.

Comments

[drt50]

The FDCPA is already a weak statute.. leave it to Congress to weaken it even more !

[Mahlon]

I have not yet seen the changes, but do not think they "weaken" the FDCPA. Perhaps drt50 sees the FDCPA as a weapon against debt collectors. I see it as a shield against abusive debt collectors. There is a difference.

[Deepak]

The changes are a disaster, and not because of the "mini-Miranda" or 30-day issues. Those are small potatoes, relatively speaking. The monster that's been unleashed by this legislation are the so-called "check diversion" programs. When I get a free moment, I intend to write something about this issue because it's very significant and has not received enough attention. I think Professor Alderman's description sugar coats it little because he's probably read collection industry accounts. (This isn't to fault him; the initial news on such things is usually based on somewhat slanted industry accounts because industry tends to have a better public relations machine.) In any event, in the meantime, readers can learn a bit about these programs at the following website:
http://www.citizen.org/litigation/articles.cfm?ID=15268

and here: http://blog.washingtonpost.com/thedebate/2006/05/care_about_the_.html

[Richard Alderman]

I thought it sounded bad enough sugar coated.

[Thomas Taylor]

Is there a law or code inwhick company like bell south and at&t, charter, are required to report good credit??
I have always paid my bills, but these companys do not report good customers like me to the different credit brues, and this seems to me to be unfair. If these companies are willing to report non-payment, then shoulg they not, also report good payment??

[DHS13]

Public Law 109-351 made some changes to FDCPA.

What is the effective date to the FDCPA? The date the law was signed (10/13/2006) or some other date?

thanks

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