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Non-Consumer Debts Being Collected

Reports have surfaced that in some cities, such as Chicago on particular, efforts are being increased to collect old tickets and fines that have yet to be paid.  Some of the fines and tickets may date back more than ten years.  Consumers should be on alert, because it is anticipated that the collection tactics that will be employed will be harsh and abusive. 

Why am I so sure?  Because the collectors that will be hired to collect these debts will not have to comply with the Fair Debt Collection Practices Act.  Indeed the FDCPA applies to debt collectors and prohibits abusive, harassing and deceptive conduct.  Thus, one would expect that a debt collector that is being abusive while collecting a debt would be in violation of the FDCPA.  The problem is that the FDCPA does not apply to every debt. 

Under the FDCPA, the term " debt" is defined as any obligation (or alleged obligation) to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family or household purposes.  The term " transaction" is emphasized here because that is a key component of a collection to fall under the FDCPA.  The debt itself must arise out of a transaction.  A transaction requires dealing and an agreement between parties.  Credit card agreements, car notes, rental leases, or other loans that are not for business are transactions. 

However, the receipt of a ticket or a fine is not a transaction.  It is a penalty or punishment in which the consumer did not voluntarily enter into.  As such, a municipal fine, a parking ticket, or an insurance subrogation claim is not a "debt" for purposes of the Fair Debt Collection Practices Act.  Collectors who obtain these accounts are well aware of this and take advantage of it.  We have witnessed many complaints of rather abusive collection tactics, only to find out it was the collection of a municipal fine, which then provides the victim of no recovery.

This is not to say that collectors collecting on these debts have open season to say or do whatever they want.  Just because the FDCPA does not apply, it does not mean that a person is left wholly unprotected.  Torts held at common law to be actionable can be effective, such as claims for intentional infliction of emotional distress.  In addition, many states have consumer fraud or deceptive business practices laws that may be beneficial if the collector committed some sort of fraud that ended up causing real damages to the debtor. 

Protecting your rights as a consumer can be tough and confusing.  If you are overwhelmed, contact SmithMarco, P.C., today for a free and confidential case review.

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