John E. Beekman, Esquire
Dear Mr. Beekman:
I am responding to your letter to John LeFevre of this office seeking clarification of several issues regarding the mailing of certain debt collection letters. I must express my regret for the delay in responding to your inquiry. Since, you have asked for a "specific response" to a number of inquiries that recite the procedures (or mechanics, if you will) of the process envisioned, but omit any mention of the substantive content of the letters) involved, it will be necessary to qualify our response to many of them.
Your inquiry is on behalf of a creditor located in Florida that collects from debtors located throughout the United States. You write that "the creditor generally handles all billing, and overdue collections on such billings, from a central location in Florida. All collection activity on overdue accounts is handled by use of the mail and telephone systems out of Florida up to the time an overdue account reaches 12(3 days past-due--at which time the account is referred to outside independent debt collectors..."
You pose a number of questions growing out of a proposed course of action that you describe as follows:
Your letter primarily seeks clarification of a portion of the Proposed Official Staff Commentary on the Fair Debt Collection Practices Act (51 P.R. 8019) and focuses on the Commentary's treatment of Section 807(3) of that Act ("FDCPA" or "the Act"). Section 807(3) prohibits "the false representation or implication that any individual is an attorney or that any communication is from an attorney." The staff commentary states, "If a creditor uses an attorney's name rather than his own in his collection communications, he loses both his exemption from the [FDCPA's] definition of 'debt collector' (Section 803(6)) and violates this provision [§807(3)]." I will treat your questions in the order in which your letter raises them.
In my opinion, creditor use of non-affiliated attorney letterheads would violate Section 807(3) of the Act under the circumstances outlined in your inquiry. A collection letter cannot be "from an attorney" in any bona fide sense if the attorney's only involvement is lending his name and entering into a contract specifying conditions for use of letter, with no other involvement in either the collection process or legal decisions incident to continuing account activity.
You next ask whether the staff comment on Section 807(3), quoted above (51 F.R. 8019 at 8025), applies where an attorney-employee letter is prepared and mailed by the creditor under three varying circumstances. I assume that you mean the letter is in fact generated by the attorney who is an employee of the creditor (in-house counsel). The inquiry includes the following circumstances:
Under the facts posited in your letter, the FDCPA would not apply to these activities because the Act's definition of "debt collector" specifically excludes "any officer or employee of a creditor while, in the name of the creditor; collecting debts for such creditor." (Section 803(6)(A).) If, however, the facts are. other than set out in your letter (if, for example, the creditor's letterhead is not used or representations are made in the text of the letter that create an implication that the attorney is independent of the creditor), then the exemption might not operate.(1)
I turn now to your final inquiry.
We do not have a prescribed or sanctioned list of activities that are deemed sufficient to constitute "meaningful participation." The determination very much rests on the facts of a given case. In this case. In this regard, I enclose copies of two prior informal staff interpretations that may assist you in identifying a representative range of such activities.(2)
I hope that the above discussion has been of assistance. This is an informal staff opinion that represents the present enforcement position of the Division's staff. As such, it is not binding on the Commission.
Very truly yours,
Christopher W. Keller
1. See, e.g., staff commentary on Section 807(10) of the Act, 51 F.R. at 8026 (number 5, "misleading letterhead").
2. Henry A. Sullivan, Esq., February 21, 1984, and Daniel C. Smith, Esq., July 5, 1984; see also enclosed Commentary (51 F.R. 8029).