Before the creditor sends a delinquent account to a collection agency, the creditor can send a dunning notice to a consumer. However, when a lawyer attempts to send a similar communication, according to recent case law, it can be considered an attempt at debt collection under the Fair Debt Collection Practices Act.
When Izell and Raven Reese defaulted on a loan obtained from Provident Funding Associates, L.P. after giving the lender their mortgage, the lender's law firm sent a letter looking for the missed payment and threatening to foreclose on the Reeses' home if the sum was not attained, the written opinion of the court explained. The Reeses claimed this was an attempt at a collection and violated the Fair Debt Collection Practices Act, though a district court disagreed.
A panel of judges in the Eleventh Circuit court of appeals reversed the district court's ruling. The written opinion of the court cited the fact that the letter sent to the Reeses featured the disclaimer reading "This law firm may be attempting to collect a debt on behalf of the above-referenced lender."
The court said the Reeses were correct in asserting there were misleading representations in violation of Section 807 of the FDCPA. According to the opinion, the couple owed a debt to the company, so asking for repayment essentially made the lawyers debt collectors under the FDCPA.
Lawyers may want to cite this case and take care in the future to abide by the FDCPA when contacting any individual who has the possibility of owing a debt to the attorney's client.
Reese v. Ellis, 2012 U.S. App. LEXIS 8839 (11th Cir. Ga. May 1, 2012).
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