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11th Circuit Finds FDCPA, FCCPA Only Apply to Mutual Consumer Debts

This month, the federal Court of Appeals for the 11th Circuit examined a case of alleged violations of the Fair Debt Collections Practices Act (FDCPA) and the Florida Consumer Collections Practices Act (FCCPA). The appellate court found that a plaintiff could not pursue a lawsuit, because the debt was not covered by either statute.

The case began with a car accident. In January of 2013, the plaintiff’s sister borrowed his car and negligently caused a minor collision. The plaintiff reported the accident to his insurance company, which paid out a property damage claim to the other vehicle for about $300.

By November of 2015, the plaintiff began receiving letters and phone calls from a debt collection company called Seattle Service Bureau Inc., claiming that the company was collecting $50,000 owed to State Farm as a result of the accident. Despite telling the debt collection company that he did not owe the debt, and that there was no debt associated with the accident, the debt collector continued to pursue him for payment. Eventually, the plaintiff filed a lawsuit alleging that the debt collection company had created the debt out of whole cloth and had violated the FDCPA and the FCCPA in pursuing him.

The district court dismissed the plaintiff’s case, and found that a debt which did not arise out of a consensual consumer transaction is not covered by either statute. The 11th Circuit Court of Appeals agreed and affirmed that, regardless of whether the debt even exists, a car accident does not create the type of debt triggers the protections of the statutes.  

The appeals court went on to explain that in order to state a claim under the FDCPA and the FCCPA, the plaintiff must allege the existence of a consumer debt. Consumer debts are defined as debts that arise out of consensual transactions. In virtually all cases, a car accident is not a consensual transaction. 

The 11th Circuit noted that both the U.S. Congress or Florida’s legislature had the option to extend the statutes to cover every type of debt, but chose to limit the language. As a result, the court could not expand the definitions in the statutes to cover the alleged debt related to the accident without changes being made by the governing body that wrote the law.

Unfortunately for the plaintiff in this case, the FDCPA and the FCCPA were not able to offer him relief from abuse from debt collection activities. For most individuals, however, debt collectors who don’t take no for an answer or refuse to stop contacting you could be liable for damages under either debt collection practices statute.

If you have been pursued or harassed by debt collectors, you may be able to seek compensation for your trouble and aggravation. The experienced South Florida defense attorneys at Loan Lawyers are here to review your potential claims, and will help you recover the damages you deserve.

To schedule a free consultation at any of our three conveniently located offices, contact Loan Lawyers today by calling (888) FIGHT-13 (344-4813).
  • ABC News
  • American Civil Liberties Union
  • CBS 4
  • CNN
  • Daily Business Review
  • Florida Trend's - Florida Legal Elite 2014
  • Florida Trend's - Florida Legal Elite 2014
  • National Association of Consumer Advocates
  • National Association of Consumer Bankruptcy Attorneys
  • NBC News
  • National Consumer Law Center
  • The New York Times
  • Avvo
  • Avvo
  • Avvo
  • Avvo
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