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19 Preventive L. Rep. 4 (2000-2001)
How to Write a Collection Letter for a Business Client without Becoming a Defendant Yourself

handle is hein.journals/prevlr19 and id is 36 raw text is: DEBT COLLECTION:
HOW TO WRITE A COLLECTION LETTER FOR A
BUSINESS CLIENT WITHOUT BECOMING A
DEFENDANT YOURSELF
By Sumner A. Bourne*

In maintaining good relations with a
business client, it is not unusual for a
general business advice attorney to
confront the following situation. On an
idle Tuesday afternoon the attorney
receives a call from the client's presi-
dent regarding some work the attorney
has been doing, and toward the end of
the conversation the client makes the
following seemingly innocuous request:
We had a customer bounce a large
check made out to us, and he hasn't
been returning our calls. Would you
write a letter to him on your letterhead?
I think that would do the trick. The
attorney agrees thinking that this simple
request will take little time and build
client goodwill, even though neither he
nor his firm does much collection work.
How much trouble can I possibly get
into writing one collection letter, he
further thinks to himself. In reality,
such a letter can cause much trouble
and, as this article will discuss, must be
drafted with extreme caution.
The Fair Debt Collection Practices
Act and Attorney Coverage
In an attempt to curb abusive prac-
tices by third party debt collection
agencies toward consumers in the col-
lection of consumer debts, Congress
passed the Fair Debt Collection
Practices Act (FDCPA) in 1977.' The
FDCPA contains civil penalties against a
debt collector for non-compliance,
including actual damages, statutory
damages of up to $1,000 per violation
and most significantly, an automatic
award of attorney fees to a successful
plaintiff.2  Originally, the FDCPA con-
tained an exclusion from coverage for
attorneys.3  However, following what
was perceived to be an abuse of this
exception by attorneys who began
operating collection agencies, Congress
repealed the attorney exception in
1986.'  Since then, Congress and the
courts have continued to broaden the
category of attorneys covered and the

conduct regulated under the FDCPA.
The Supreme Court added its interpre-
tation of the FDCPA coverage of attor-
neys in the 1995 decision Heintz v.
Jenkins.5 In Heintz, the Court held that
an attorney is considered a debt col-
lector, and therefore subject to FDCPA
regulation and penalties, if the attorney
regularly attempts to collect debts,
either directly or indirectly, including
through  the   use  of  litigation.6
Unfortunately, the language of the
FDCPA itself and the Heintz opinion
gave little further guidance on what
regular debt collection practice actual-
ly means. Consequently, the answer to
the important ques-
tion of whether or not
our hypothetical gen-
eral business practi-       le FD
tioner is required to
follow  the  FDCPA          eded
requirements   and
restrictions is elusive.    qulrc
A review of the
court opinions that
have considered the        he CO1
question of which
attorneys classify as e IBntla
debt collectors leads
to the conclusion that     catiOll
any attorney who
writes a collection let-       li
ter should assume that
his conduct is regulat-
ed under the FDCPA.t
The courts have inter-
preted the term regu-      t any
lar to mean even
occasional collection      n obtb
practice, even if it is a
very small amount of       emSed
the attorney's or firm's
work   volume. For           purl
example, in the often-
cited case Stojanovsky
v. Strobl & Manoogian
the court held that an attorney was a
debt collector subject to FDCPA regu-
lation even though collection work only

constituted 4% of his total practice.'
Additionally, some areas of law not tra-
ditionally thought of as pure collection
law, such as forcible entry and detainer
actions, are considered by most courts
to be collection activities that can raise
a lawyer's or law firm's collection prac-
tice percentage.' It is also the author's
opinion, as discussed infra, that a
recent amendment to the FDCPA essen-
tially requires that an attorney writing a
collection letter affirmatively state that
he is a debt collector.
It is important to note that the
FDCPA covers only consumer debts,
and only consumers
are protected under
the FDCPA.0  Some
oi*,   non-traditional
edebtor/creditor trans
in 19          actions are considered
consumer debts under
3 th a&        the FDCPA, such as
insufficient  fund
ftor i         checks  and   rental
obligations, if the
Osume          underlying  debt is
consumer in nature.
CO            The FDCPA does not
thaf       regulate business-to-
ebusiness debts, and
only  real  persons
ationo qualify as potential
plaintiffs under the
Pt tostatute, not corpora-
-bt, antions or partnerships.
If the type of
inform         debt   falls  tinder
FDCPA coverage, and
ined           the attorney falls with-
sin the debt collector
definition, then the
tattorney must obey a
number of prohibi-
tions in attempting to
collect the debt that
require certain disclo-
sures in any communication. A brief
summary of those prohibitions and dis-
closures follows, and any attorney that

4 * PREVENTIVE LAW REPORTER * PREVENTIVE LAW REPORTER * PREVENTIVE LAW REPORTER * PREVENTIVE LAW REPORTER * PREVENTIVE LAW REPORTER * PREVENTIVE LAW REPORTER .

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