The Tenth District Court of Appeals recently extended the protection for attorneys’ handling debt collection activities for their creditor clients. Under the Fair Debt Collection Practices Act, (FDCPA), debt collectors are required to make certain disclosures when communicating with a debtor. While the courts have repeatedly found that the FDCPA disclosure requirements also apply to attorneys who regularly engage in consumer debt-collection, the Tenth District’s decision continued the courts’ separation of “communication” in an ordinary lawsuit from debt collection activities. Silverman v. Roetzel & Andress, L.P.A. (10th Dist., 2006) 168 Ohio App.3d 715.
The FDCPA defines “communication” as “the conveying of information regarding a debt directly or indirectly to any person through any medium.” 15 U.S.C. § 1692a(2). The FDCPA requires the initial “communication” to inform the debtor that there is a debt to be collected, and subsequent “communication” to disclose that the letter comes from a debt collector.
In Silverman v. Roetzel & Andress, the Tenth District Court of Appeals determined that cover letters enclosing court filings are not “communications” under the FDCPA, despite their effect of conveying information regarding the underlying debt.
The creditor in Silverman initially filed an action against the debtor to recover a balance owed on a credit card. After the trial court decided the case in favor of the creditor, the debtor filed an action against the creditor’s attorneys arguing that the cover letters sent to the debtor during the creditor’s lawsuit constituted “communications” under the FDCPA. Specifically, the debtor claimed that the attorney failed to disclose that they were a debt collector in each of the cover letters.
The debtor in Silverman argued that the FDCPA does not exclude letters accompanying court filings from its disclosure requirements. The Court determined, however, that while the cover letters at issue may have the tangential effect of conveying information regarding the underlying debt, they were not the type of “communication” that Congress sought to include within the scope of the FDCPA.
In arriving at its decision, the Tenth District Court of Appeals referred to a prior Supreme Court decision finding that the FDCPA does not apply to communications’ inherent in an ordinary lawsuit. The Supreme Court had previously recognized the objective of preserving a creditor’s right to a judicial remedy, and not allowing a debtor to stop such communications.
Therefore, this Tenth District decision furthers the Courts’ separation of judicial remedies to collect debts from other efforts of debt collectors. While attorneys continue to be subject to the FDCPA when conducting debt collection activities, the Courts continue to protect the rights of creditors to retain counsel and pursue judicial remedies to recover such debts.
In addition to the protection of pursuing judicial remedies, the Court’s decision also offered guidance on other correspondence that has been excluded from the FDCPA’s definition of “communications” These include: 1) letters sent in response to plaintiff’s charge that a creditor violated the FDCPA; 2) settlement offers; 3) letters informing debtors of the current status of their accounts and due dates; 4) a Statement of Claim, or its accompanying cover letter; 5) a letter informing the plaintiff that her check had been received, the judgment and lien would be released, and the foreclosure action dismissed; and 6) settlement letters from a law firm retained by creditor.
If you have further questions regarding what constitutes a communication under the FDCPA, or any other questions regarding a creditor’s rights, please feel free to contact one of our Finance & Creditors Rights or Professional Liability Practices Group members.