Collector - October 2016 - 43

IAP Florida Legislature could have made these statutes apply to all debt collectors collecting every kind of debt, they did not. The plaintiff in the Parham case filed suit against the collection agency seeking damages for alleged FDCPA and FCCPA violations. The parties' dispute related to an automobile accident that occurred in January 2013 involving a car owned by the plaintiff. The plaintiff reported the accident to his insurance carrier, which later paid a $298 claim for property damage to the other driver's vehicle. In November 2014, the plaintiff began receiving letters and telephone calls from the collection agency attempting to collect on an alleged $50,000 debt owed for damages arising out of the January 2013 automobile accident. According to the plaintiff, the alleged $50,000 debt did not exist and, instead, was fabricated by the collection agency. Since the alleged debt did not exist and, therefore, the plaintiff did not owe it, the plaintiff claimed the collection agency violated the FDCPA and FCCPA. In granting the collection agency's motion to dismiss and/or motion for judgment on the pleadings, the district court explained that a plaintiff must allege the existence of a consumer debt in order to state a claim under the FDCPA and FCCPA. The district court also explained that in order to qualify as a consumer debt, the debt must arise as a result of a consensual transaction, not as a result of negligence. Since the alleged debt, whether it was real or fabricated, was traceable to an automobile accident rather than a consensual transaction, the district court ruled that the plaintiff failed to state a claim under the FDCPA and FCCPA. On May 31, 2016, ACA submitted an amicus brief to the Eleventh Circuit in the Parham appeal. ACA submitted the "friend of the court" brief to support its member's case, and to combat the consumer advocate's attempt to expand the scope of the FDCPA to include "any debt of any kind, as long as an individual debtor denies the debt's existence." COLLECTOR 10.16 ACA argued that doing so would sweep into the statute not only subrogation debts, but also business and commercial debts, taxes, fines, alimony or tort claims, which would contradict the statutory text and the longstanding interpretation of that text. ACA also argued that the plaintiff 's approach would make the debt collection practices statutes' scope dependent on the debtor's characterization of the debt as disputed or not, which would violate the debt collector's right to due process. Although the Eleventh Circuit issued to its decision in Parham as an unpublished opinion, the appellate court's legal analyses in Parham is important to future litigants and to the credit and collection industry at large. ACA is encouraged by this important decision and confident it will become positive persuasive authority in jurisdictions throughout the country. ACA is also pleased that the Parham decision raises the number of industry-favorable decisions (wins) the association has helped to achieve for its members through the Industry Advancement Program to a total of 20 in less than three years. ACA's efforts to proactively support the credit and collection industry are part of the association's Industry Advancement Program, and are made possible by funding through ACA's Industry Advancement Fund. To read more about the most recent significant decisions involving the credit and collection industry, ACA's members can always find concise case squibs and summaries at acainternational.org/iap. Karen Scheibe Eliason is ACA International's corporate counsel. 43 http://www.acainternational.org/iap http://www.webrecon.com

Table of Contents for the Digital Edition of Collector - October 2016