Attorney Involvement

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					Attorney Involvement
Collection agencies should accurately state attorney
involvement in consumer communications.

By Andrew Pavlik

36 I July 2010 Collector
A       ttorneys often play an integral
        role in the debt collection
        process. Collection agencies may
use in-house counsel or work with a
law firm during the collection process
                                             mass-mailing system, most of which
                                             included the attorney’s professional
                                             letterhead and signature line.
                                                 The series of collection letters at
                                             issue contained increasingly misleading
                                                                                          as claimed (a determination was not
                                                                                          made for lack of evidence) the attorney’s
                                                                                          actions would constitute meaningful
                                                                                              Including a disclaimer in a notice
when traditional collection efforts fail.    statements including, “Acting as General     that highlights the level of attorney
Whether acting independently as debt         Counsel for [collection agency]... I         involvement may stave off claims of
collectors, assisting collection agencies    have told them that they can lawfully        lack of attorney involvement. In the
or working in concert with creditors,        undertake collection activity to collect     Second Circuit Court of Appeals case
attorneys write letters, pursue collection   your debt.” However, the attorney            Greco v. Trauner, Cohen & Thomas,
and ultimately file suit in a court of law   had never personally reviewed the            L.L.P., 412 F.3d 360 (2d Cir. 2006), the
to collect delinquent debt.                  consumer’s file nor made any specific        court exonerated the defendant law
    When the average consumer receives       recommendations concerning its               firm because of its upfront and honest
a communication from an attorney or          collection.                                  collection letter.
a communication stating an attorney              The court recognized the importance          The letter contained the firm’s
is involved with the collection of the       of mass mailings in the collection           letterhead and signature line (not
debt, the consumer recognizes the            industry, especially for smaller debts       actually signed by any individual
collection letters and phone calls could     (the consumer in this case owed $9.42).      attorney) as well as the usual language
very soon turn into lawsuits and court       However, the court found such letters        found in collection letters, but contained
orders. In light of the influence attorney   cannot give the false impression an          the following paragraph: “At this time,
involvement can have over the “least         attorney is personally pursuing the debt.    no attorney with this firm has personally
sophisticated consumer,” the Fair Debt       Further, the court stated, “there will       reviewed the particular circumstances
Collection Practices Act (FDC
Description: Section 807(3) of the FDCPA prohibits "the false representation or implication that any individual is an attorney or that a communication is from an attorney." At first glance, the statute seems fairly unambiguous and clear in its requirements - either a letter is from an attorney or it is not. However, over time, the courts have clarified the meaning of Section 807(3) and have found for a letter to be "from an attorney" within the meaning of Section 807(3), the attorney sending the letter must be "meaningfully involved" in the decision to draft and send the letter.The court recognized the importance of mass mailings in the collection industry, especially for smaller debts (the consumer in this case owed $9.42). However, the court found such letters cannot give the false impression an attorney is personally pursuing the debt. Further, the court stated, "there will be few, if any, cases in which a massproduced collection letter bearing the facsimile of an attorney's signature will comply with the restrictions imposed by [Section 807(3)]."Caution should be exercised before an attorney's name, signature or letterhead is used on a collection letter, especially with mass mailings, as the court presumes a lack of involvement when hundreds or even thousands of accounts are "reviewed'' by an attorney.
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