Florida consumer debt collection is subject to regulation under the Florida Consumer Collection Practices Act (the “FCCPA”). This article discusses the FCCPA registration requirement and its role in debt collection lawsuits. If you have any questions relating to the FCCPA in Florida, please contract Bernhard Law Firm at 786-871-3349, abernhard@bernhardlawfirm, www.bernhardlawfirm.com.
The Florida Legislature enacted the FCCPA to curb what it found to be a series of abuses in the area of debtor-creditor relations, and thus Florida courts and attorneys must construe the FCCPA in the manner that most protects the consumer. Laughlin v. Household Bank, Ltd., 969 So. 2d 509, 512 (Fla. 1st DCA 2007). The scope of the FCCPA is broad: unlike the FDCPA, the FCCPA applies not only to debt collectors, but also to any person collecting a consumer debt. In re Hathcock, 437 B.R. 696, 704 (M.D. Fla. 2010). The FCCPA is not restricted to collection agencies, but includes all allegedly unlawful attempts at collecting consumer claims. Williams v. Streeps Music Co., Inc., 333 So. 2d 65, 67 (Fla. 4th DCA 1976). Any debt, either oral or written, whether with a commercial institution or to any individual, is subject to regulation of the FCCPA. Heard v. Mathis, 344 So. 2d 651, 654 (Fla. 1st DCA 1977).
Any entity collecting on debts as its business is subject to regulation under the FCCPA, and must therefore formally register its activities with the State and receive approval and license to do so. This applies to any “debt collector” or a “consumer collection agency” under the definitions of the FCCPA. A consumer collection agency includes any business entity engaged in the business of collecting consumer debts, which Florida courts have already held includes collection of attorney-fee debts on contracts assigned from law firms. §§ 559.55(6) and 559.555(1), Fla. Stat. (2015); Morgan v. Wilkins, 74 So. 3d 179, 182 (Fla. 1st DCA 2011) (§ 559.55 debts include attorney-fee debts from law firms); Sandlin v. Shapiro & Fishman, 919 F. Supp. 1564 (M.D. Fla. 1996) (a law firm hired by a lender to enforce a mortgage and note through correspondence or legal proceedings is a “debt collector” under the FCCPA).
In order for collection of money to qualify as collection of “debt,” thereby triggering protections and registration requirements of the FCCPA, money being collected need only constitute payment obligations of: (1) a consumer, arising out of (2) a transaction, in which services were provided (3) primarily for personal, family, or household purposes. Oppenheim v. I.C. Sys., Inc., 627 F.3d 833, 837 (11th Cir. 2010). Thus, the amount a client allegedly owes to a law firm for its representation of her in a personal legal matter is a “consumer debt” to which the FCCPA protections and requirements apply. Morgan v. Wilkins, 74 So. 3d 179, 182 (Fla. 1st DCA 2011) (holding FCCPA applies to the collection of law firm fees because “[client] incurred an obligation in connection to a transaction with [law firm] for the provision of legal services. [Client’s] obligation to the law firm falls within the definition of debt in section 559.55(1).”).
Failure to register as a debt collector prohibits maintaining a debt collection action
Under Florida Statutes § 559.553(1), a person may not engage in the business of debt collection without first registering with the State as a consumer collection agency. Fla. Stat. § 559.553(1). This FCCPA requirement—that a debt collector obtain Florida registration and approval before initiating collection actions in Florida state courts against debtors—applies broadly. Collins v. Erin Cap. Mgmt., LLC, 991 F. Supp. 2d 1195, 1207 (S.D. Fla. 2013) (“Indeed, a plain reading of the registration requirement indicates it broadly applies.”).
The filing of lawsuits in state courts against debtors, without first registering and obtaining State approval under the FCCPA, constitutes a violation of the FCCPA and FDCPA sections governing false, deceptive, or misleading misrepresentations, as these are both (i) actions that could not legally be taken and (ii) actually completed illegal acts. Collins v. Erin Cap. Mgmt., LLC, 991 F. Supp. 2d 1195, 1211 (S.D. Fla. 2013). Moreover, simply hiring a Florida lawyer for representation in such lawsuits does not exempt a debt collector from State registration and approval requirements. Id. (“Absent evidence of an applicable exemption, [plaintiff] was required to register as a consumer collection agency prior to instituting garnishment actions against [defendant].”); LeBlanc v. Unifund CCR Partners, G.P., 552 F. Supp. 2d 1327, 1337 (M.D. Fla. 2008) (company in business of purchasing charged off accounts from Florida creditors, which hired Florida attorneys to pursue collection litigation, was required to register in Florida as debt collector). Because § 559.553(2), Fla. Stat. (2015) provides limited exemptions for members of the Florida Bar members who are engaging in the business of a consumer collection agency, original creditors, and other excluded parties, any person challenging a debt collection should confirm no exclusions apply.
Where a debt collect has failed to comply with registration, the defendant should be able to successfully challenge maintenance of a debt collection suit. The challenging party should confirm that the collector’s sole business is the purchase and collection of debt, that it is not the original creditor on these debts, that its owners are not members of the Florida Bar, and that it is not properly licensed, registered, or in application to conduct debt collection in Florida. Given the broad scope and application of the FCCPA registration requirement, to be construed in the manner that most protects the consumer, a company meting these criteria is obligated to register and obtain approval from the State for these business activities before filing this suit. Laughlin at 512 (FCCPA should be construed to protects consumers); In re Hathcock at 704 (FCCPA scope is broad); Williams at 67 (FCCPA applies to all attempts at collecting consumer claims); Heard at 651 ((Any debt is subject to FCCPA); Morgan at 182 (FCCPA applies to amount client owes law firm, i.e. a “consumer debt”); Sandlin at 1564 (M.D. Fla. 1996) (law firm hired to enforce debt in court is a “debt collector” under FCCPA).
A company’s failure to do register pre-suit prohibits it from obtaining a judgment in this lawsuit. Collins at 1211 (holding because plaintiff had failed to register under FCCPA, it could not obtain judgment against debtor defendant). If you have any questions relating to the FCCPA in Florida, please contract Bernhard Law Firm at 786-871-3349, abernhard@bernhardlawfirm, www.bernhardlawfirm.com.