The Honorable Orrin G. Hatch
U.S. Senate 
Washington, D.C.  20510

The Honorable Robert G. Torricelli
U.S. Senate
Washington, DC  2051

RE: Opposition to Most Recent Proposed Changes to the Fair Debt Collection Practices Act

Dear Senators Hatch and Torricelli:

We write to express our strong opposition to the most recent proposal to attach a Fair Debt Collection Practices Act (FDCPA) amendment to the bankruptcy bill.  This proposal was offered by Senator Torricelli in response to an original amendment authored by Senator Hatch.   Millions of American consumers would be considerably harmed if the amendment passed.

The FDCPA protects consumers from abusive and harassing collection efforts.  It does not in any way prevent the collection of a valid debt. Changes to this important law should not be done lightly, without full sunshine on the change and opportunity by those effected to explain the ramifications of the proposal.

There have been no hearings on the FDCPA in many years. No case has been presented to this Congress to substantiate the need for any changes to this important consumer protection act. This amendment would allow consumers be harassed, abused and subjected to other unfair collection tactics from debt collectors.

The FDCPA does nothing to prevent the collection of a valid debt. It only prohibits debt collectors from inappropriate activities in the collection of those debts.  Collectors can’t harass consumers or invade their privacy, make false or deceptive representations, or use abusive collections’ tactics.   Included among the specific restrictions in the FDCPA is prohibition against a collector charging illegal fees for the collection activity.

In the past few years, there have been a number of alarming cases around the nation in which consumers whose checks have been stolen by others, who have testified against the forger in court, have nevertheless themselves been subjected to unfair and harassing collection tactics in violation of the FDCPA. In other cases, low-income consumers who have written checks for rather small amounts ($15 or $25) which were subsequently dishonored, were charged hundreds of dollars by the collector. When the consumers could not pay the original amount, plus the hundreds of dollars in fees, the consumers were subjected to harassment. These activities are illegal under the FDCPA and should remain illegal.

1. The amendment puts the burden on consumers to prove that they did not “knowingly and with intent to defraud” pass a bad check.   Why should a consumer who might have bounced a check through no fault of his or her own have to shoulder an additional legal burden simply to receive basic protection against harassment and abuse?   This is not only unnecessary (an intent to defraud is presumed under most state criminal law statutes for failure to pay) but onerous.
2. The amendment would prohibit the collection of attorney’s fees in these circumstances.  This will have the effect of preventing most consumers from retaining an attorney to pursue an action under the FDCPA.  It is the same, practically, as allowing a wholesale waiver of the prohibitions in the FDCPA. 
3. The amendment would likely cover collections of loans and credit card debt, not just checks.  Legal experts tell us that, because the word “instrument” is used, the amendment would also apply to loans and credit card debt. The only type of debt that is definitely not covered by this amendment is medical debt.

We strongly urge you to reconsider your support of this harmful amendment.  If you would like more information about our concerns with this proposal, please contact Margot Saunders at the National Consumer Law Center (202-986-6060) or Travis Plunkett at the Consumer Federation of America (202-387-6121).

Sincerely,

Consumer Federation Of America

National Consumer Law Center, Inc.

Public Citizen
U.S. Public Interest Research Group
United Automobile, Aerospace and Agricultural Implement Workers