Phoenix Resource Group provides select, updated information
from the Federal Trade Commission on issues pertaining to the
Fair Debt Collection Practices Act. Our updates focus on opinions
that could impact the way creditors and non-attorney third
parties communicate with consumers to collect debts.

Past Newsletter Archives:

 October 2006  May 2002  March 2001  October 2000  September 2000

FTC WARNS THAT IT WILL CONTINUE TO PURSUE IN-HOUSE COLLECTOR VIOLATIONS

In its annual report, the Federal Trade Commission acknowledged that "For the most part, creditors are exempt when they are collecting their own debts." [italics added].  Just exactly what in-house collectors are exempt from was narrowed substantially when the report went on to cite its March 2001 judgment against The Associates, which was adjudicated under the Federal Trade Commission Act. Although the FTC noted that it cannot pursue questionable in-house collection tactics under the FDCPA, the Commission stated clearly its authority to do so under the Federal Trade Commission Act and its intent "to do so as appropriate cases present themselves."

And the FTC has plenty of opportunity to evaluate the appropriateness of cases, as 41% of all debt collection complaints in the prior year were about creditors collecting their own debts. It seems clear that exemption from the FDCPA will not be a viable defense for creditors whose collector training and performance management programs violate consumer protections.