11th Circuit Holds Lawyers Are Debt Collectors

Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F. 3d 1211 – Court of Appeals, 11th Circuit 2012 – Google Scholar.

This is a case under the Fair Debt Collection Practices Act. The lawyers represented a lender and sent a letter to the plaintiffs seeking to collect a debt and threatening to file a foreclosure action if the debt was not paid.

Plaintiffs sued alleging that the lawyers’ letter was deceptive and misleading in that it misstated some provisions of Georgia law. The lawyers moved to dismiss on the ground that they were not debt collectors.

The district court agreed, but the Court of Appeals held that the lawyers were debt collectors. Because the law firm regularly collected debts, it qualified as a debt collector under the statute and could be held liable.

“So a party can qualify as a “debt collector” either by using an “instrumentality of interstate commerce or the mails” in operating a business that has the principal purpose of collecting debts or by “regularly” attempting to collect debts.

The complaint contains enough factual content to allow a reasonable inference that the Ellis law firm is a “debt collector” because it regularly attempts to collect debts. The complaint alleges that the law firm is “engaged in the business of collecting debts owed to others incurred for personal, family[,] or household purposes.” It also alleges that in the year before the complaint was filed the firm had sent to more than 500 people “dunning notice[s]” containing “the same or substantially similar language” to that found in the letter and documents attached to the complaint in this case. That’s enough to constitute regular debt collection within the meaning of § 1692a(6).”

Comment: this case is not novel or unique. The lawyers here appeared to make a few minor errors in attempting to collect a valid debt, only to find they were on the wrong end of a FDCPA lawsuit.

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