Ms. Suellen A. Keever
Dear Ms. Keever:
This is in response to your inquiry of April 26, 1989 inquiring whether your activities as in house counsel for Sentara Health System fall within the purview of the Fair Debt Collection Practices Act (FDCPA). You further ask whether the institution of legal action by Sentara against consumers in judicial districts other than where the consumer resides or where the consumer signed the contract may violate Section 5 of the Federal Trade Commission Act.
Section 8036 (A) of the FDCPA excludes from the definition of collector "any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor." This exemption also includes a creditor's salaried attorney who collects debts on behalf of, and in the name of the creditor. Based upon the facts outlined in your letter, none of your collection activities on behalf of Sentara would be subject to the FDCPA, including the venue requirements of Section 811.
Please note however that the "fair venue standard" adopted by Congress in Section 811 of the FDCPA was developed by the Commission as a result of several enforcement actions brought prior to the FDCPA, and recently reaffirmed in a Commission action against J.C. Penney Co. The actions were brought pursuant to the Commission's jurisdiction over unfair acts or practices in or affecting commerce, as set out in Section 5 (a) (i) of the Federal Trade Commission Act, 15 U.S.C. § 45 (a) (i). Although Sentara may not be subject to the venue requirements of Section 811 of the FDCPA, the fair venue standard developed under Section 5 of the Federal Trade Commission Act would, of course, continue to apply to Sentara's collection practices, including those that you employ in Sentara's name.
I am enclosing recent staff interpretations addressed to attorneys which relate to the two issues raised in your letter;(1) a copy of the Commission's Order in the J.C. Penney matter (109 FTC 54), and a copy of the FDCPA staff commentary which sets out the staff's views on the various provisions of the FDCPA, including the exemptions granted to creditors and their employees.(2)
This constitutes an unofficial staff interpretation and is not binding on the Commission. I hope the information will be helpful.
Roger J. Fitzpatrick
1. See letters to Mr. Martin Schwam, dated October 20, 1986, and to Ronald D. Garrison, Esq. dated April 6, 1988.
2. Official Staff Commentary on the FDCPA, 53 Fed. Reg. 5012, par. 4 (December 13, 1988).