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Learn how the Experienced Attorneys at Krohn and Moss Can Help Fellow Lawyers and Law Firms: What Happens Under the FDCPA When an Attorney “Regularly” Collects Debts?

Adam J Krohn / Posted: 2013-08-27 1:27 pm

Attorneys have known since 1995 when Heintz v. Jenkins was issued by the United States Supreme Court that attorneys who seek to collect on consumer debts for clients, even when it is through litigation, they may be considered a “debt collector” under the Fair Debt Collection Practices Act (FDCPA). However, there is still a question of how often an attorney or law firm needs to engage in consumer debt collection activities prior to being subject to the Act.

This question has become more important in recent years since the existing practices of law firms have become integrated with collection work. However, there is not a bright line rule that establishes when a lawyer or a law firm is considered to “regularly” engage in debt collection. The Tenth Circuit has come out with a decision though, James v. Wadas, which determines whether a law firm “regularly” engages in debt collection on a case-by-case analysis of several factors that relate to the practice of the an attorney or firm.

An attorney or law firm needs to determine whether they are collecting “debts” within the meaning of the FDCPA under 15 U.S.C. Section 1692a(5) since not all unpaid obligations qualify. If the attorney or law firm is collecting “debts” under the definition in the FDCPA, next comes the question of how often they must do so in order to qualify as a debt collector under this Act. With some limitations, under 15 U.S.C. Section 1692a(6) a “debt collector” is considered to be “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”

If your firm or practice’s main purpose is collecting consumer debts then you are considered a “debt collector” under the statute and the FDCPA. What is more difficult to determine is whether a firm or attorney with a small collection practice is considered to be “regularly” collecting consumer debts. The Tenth Circuit in Wadas adopted a multi-factor test to answer this question. Under this test the court considered:

  • The number of debt collection communications that were issued and/or the number of collection related litigation matters that were pursued over the relevant period of time
  • The frequency at with communications and/or litigation activity took place, including whether there are any discernible patterns in the activity
  • Whether there are specific personnel assigned to work on debt collection activity
  • Whether there are systems or contractors to facilitate debt collection activity
  • Whether the debt collection activity was undertaken in connection with client relationships with entities that are ongoing and have retained the attorney or firm to assist them in collecting outstanding consumer debt obligations

Other Circuits have decided this issue in different ways but each determines whether a firm or attorney’s is a debt collector under the FDCPA on a case by case basis. However, in the Tenth Circuit, each case to determine whether an attorney or law firm is considered a “debt collector” under the FDCPA will now be decided based on balancing these factors.

We understand the frustration you may have when dealing with an aggressive debt collector. We have been successfully representing those abused and taken advantage of by debt collectors for years, and have a long list of successful stories to share with you. We offer a FREE CASE REVIEW for you to assess whether we can assist you with your matter. Please do not hesitate to contact us toll free at 1-800-875-3666 if you prefer to talk to a trained professional over the phone instead, or of course, visit our website at

Tags : Collectors, Debt Collection, Debt Collection Harassment, Debt Collectors, Debt Regulation, Fair Debt Collection Practices Act, Fdcpa, Recent Articles

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