South-Western Legal Studies in Business

Debt Collection that Results in Lien Must Still Comply with FDCPA
Description Appeals court held that any party acting as a debt collector, even if that is not their primary business, must follow FDCPA rules in all communications. When the dispute resulted in a lien being imposed on the debtors' property, the FDCPA rules still applied.
Topic Consumer Protection
Key Words Fair Debt Collection; Debt Collector; City; Law Firm
C A S E   S U M M A R Y
Facts The City of Bethlehem hired Portnoff Law Associated (PLA) to collect overdue water bills. PLA sent the Pipers a letter on city stationery advising them of the amount due. A second letter was sent more than a month later on PLA stationery demanding immediate payment or suit would be filed. A third letter was sent a month later that included a copy of a municipal lien for non-payment of water fees. Three more letters were sent over the next several months, and assorted phone calls were made demanding payment. The Pipers finally paid most of the amount due, but PLA obtained a court order for a Sheriff's sale of their home based on the lien. The Pipers sued for violation of the Fair Debt Collection Practices Act (FDCPA). The suit claimed that the letters failed to include disclosures required by statute and falsely implied the origins of the letter. The district court held in the Pipers favor. PLA appealed.

Affirmed. Even if PLA's business is not primarily debt collection, it must comply with the FDCPA when it acts as a debt collector. Hence, every letter sent had to provide the required details about the amount due and other issues that must be covered. The fact that a lien was obtained does not change the role of the FDCPA in the matter.

Citation Piper v. Portnoff Law Associates, Ltd., 396 F.3d 227 (3rd Cir., 2005)

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