Texas Commercial Law Firm

It would appear the Kimber holding could be limited to apply to businesses having collection of debts as its principal purpose. Given the expansive reading of the FDCPA afforded by most courts, however, it would not be prudent to make policy decisions on the assumption that a court would limit the definition of debt collector to a business which obtains a debt in default and which has as its principal purpose the collection of debts. The safest interpretation is that a business which obtains consumer debts after they go into default should meet all FDCPA debt collector requirements. With its expansive reading of the Act, Kimber seems to have effectively eliminated what would appear to be an explicit requirement that for one acquiring a debt in default to be a debt collector, they must receive the "debt" in default solely for the purpose of facilitating collection of such debt for another." The only remaining requirement for one who acquires a debt in default to qualify as a debt collector is that their "principal business is the collection of debts" Having concluded that the FDCPA applies to mortgagees who purchase debts in default, what follows is a discussion of some of the FDCPA requirements relating to debt collector communications to debtors. While these provisions would appear to be the most significant to the day to day operations of a mortgagee and the most likely to be overlooked, the FDCPA itself should be reviewed for the numerous other specific requirements and prohibitions.

The FDCPA "Miranda Warning"

Section 1692e(11) of the FDCPA requires a debt collector to disclose in all communications (written or oral) with a debtor (except those made to acquire location information) that "the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose." Several cases have held that this so-called "Miranda Warning" must be given in every communication with the debtor. Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22 (2nd Cir. 1989); Carroll v. Wolfpoff & Abramson, 961 F.2d 459 (4th Cir. 1992), cert. denied, ____U.S.____, 113 S.Ct. 298, 121 L.Ed.2d 222 (1992); Frey v. Gangwash, 970 F.2d 1516 (6th Cir. 1992). Beattie v. D.M. Collections, Inc., 754 F.Supp. 383 (D.Del. 1991); Seabrook v. Onondaga Bur. of Medical Economics, 705 F.Supp. 81, 87 (N.D.N.Y.1989); but see: Pressley v. Capital Credit & Collection Service, Inc., 760 F.2d 922 (9th Cir. 1985)(holding that a follow-up notice was not a communication and therefore did not require the "Miranda Warning"). This requirement is separate and distinct from the 30 day validation notice (discussed below) which is only required to be given in a debt collector's initial communication with a consumer, or within 5 days thereafter.

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