Court rules FDCPA applies to debtor's attorney

A great win came from the Third Circuit Court of Appeals on January 12, 2011, in Allen v. LaSalle Bank, which reversed a District Court holding that dismissed a plaintiff's lawsuit alleging that an inaccurate collection demand made upon her attorney violated the Fair Debt Collection Practices Act ("FDCPA").

The offending debt collector was a law firm that represented the servicer of a defaulted mortgage. The Third Circuit rejected the District Court’s holding that communications to a debtor’s attorney should be analyzed from the perspective of a competent attorney for purposes of determining whether they violate the FDCPA. Characterizing the FDCPA as “a strict liability statute,” the Third Circuit observed that “it would undermine the deterrent effect of strict liability” if an otherwise improper communication could escape FDCPA liability because it was directed to the debtor’s attorney.

Unfortunately, according to an article in Inside Arm, the Second Circuit (the circuit in which this office operates) has stated in dicta (explanatory material within a decision) that statements made exclusively to a debtor's attorney are not actionable under the FDCPA. Let's go, Second Circuit practitioners, let's make some good law!

Categories: Debt Defense
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