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The Fair Debt Collection Practices Act: An Overview for Self-Storage Operators

By Teri Lanza Comments
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The Fair Debt Collection Practices Act (FDCPA), enforced by the Federal Trade Commission, is a federal law that prohibits debt collectors from using abusive, unfair or deceptive practices to collect debt from consumers. It applies in all states equally, however, each state has the right to strengthen (not weaken) the law as it chooses.

It’s critical that self-storage operators understand and abide by this law. Here’s an overview as well as advice for compliance.

To Whom Does the Law Apply?

The stated purpose of FDCPA as written in 15 U.S. Code §1692 is to “eliminate abusive debt collection practices by debt collectors, to ensure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent state action to protect consumers against debt collection abuses.”

The law applies to anyone who collects a debt for another person or company (a third-party debt collector). Generally, a self-storage operator wouldn’t be held liable if the third-party debt collector he hires violates the law. The law also doesn’t apply to a self-storage operator who collects his own debt (except in certain states). In fact, there have been several court decisions holding that there’s no cause of action against a self-storage business collecting on its own debts.

For example, in Sobayo v. Public Storage (U.S. District Court, California, 2013), the court found that the plaintiff failed to state a FDCPA claim because, “as a threshold matter, the complaint pleads no facts demonstrating that Public Storage is a business principally engaged in debt collection. Moreover, leave to amend would be futile because it is entirely implausible that a self-storage company, whose principal business is self-storage unit rentals, would qualify as a debt collector under the FDCPA.”

However, if a self-storage operator sends a demand letter under a name other than that of his storage business, the law would apply, and he could be held liable. Also, in states including California, Florida and Texas, the law has been enhanced to apply to the creditor himself. If you operate self-storage in these states, the law directly applies to you.

Limits of Communication

One of the most important sections of the law deals with the limits of communication between the debt collector and the debtor. The law provides that without the prior consent of the consumer or the express permission of a court of competent jurisdiction, a debt collector may not communicate with the consumer regarding his debt in the following situations:

  • Any unusual time or place known, or that should be known, to be inconvenient to the consumer. In the absence of evidence to the contrary, a debt collector shall assume the convenient time for communicating with a consumer is between 8 a.m. and 9 p.m. local time, at the consumer’s location.
  • The debt collector knows the consumer is represented by an attorney with respect to the debt and knows, or can readily discover, the attorney’s name and address—unless the attorney fails to respond within a reasonable time or consents to direct communication with his client.
  • At the consumer’s place of employment if the debt collector knows or has reason to know the employer prohibits the consumer from receiving such communication.

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