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Eleventh Circuit Refuses to Impose a ‘Least Sophisticated Consumer’ Standard to Discharge Violations https://t.co/FwkJpuXtnq
In a move that provides clarification and more consistency with the FDCPA but widens the gap as to the treatment of collection agencies and non-collection agency debt collectors, North Carolina has modified its Debt Collection Act (the “NCDCA”) to conform more closely to the FDCPA regarding third party communications.
North Carolina has a bifurcated statutory scheme regarding its collection statutes. Chapter 58 of the North Carolina General Statutes regulates the collection efforts of collection agencies and debt buyers. Chapter 75 of the General Statutes regulates all others engaged in debt collection, including original creditors. The modifications to the statute, which were enacted on August 5, 2015, and took effect immediately, apply to Chapter 75 only and serve to clarify what is appropriate regarding contact with third parties.
As things stand now, third party communication rules in North Carolina are as follows:
The third party contact rules are codified in the North Carolina Collection Agency Act (the “NCCAA”) at N.C.G.S. §58-70-105 and prohibit communication with any person other than the debtor or his attorney except:
Collection agencies and debt buyers operating in North Carolina should be aware that the NCCAA applies not only to the collection of consumer debt but also to the collection of commercial debt.
Unlike the NCCAA, the NCDCA only applies to consumer debt defined as being any debt incurred for personal, family, household, or agricultural purposes. The third party contact rules are codified at N.C.G.S. §75-53. As amended, debt collectors (which include original creditors) are prohibited from communicating with any person other than the debtor or his attorney except:
There are three key amendments to the statute specific to third party communications:
The statute additionally provides clarification that under the NCCAA, creditors and other non-collection agency/debt buyer debt collectors are allowed to collect their filing fees and other court costs.
Caren Enloe leads Smith Debnam’ s consumer financial services litigation and compliance group. In her practice, she defends consumer financial service providers and members of the collection industry in state and federal court, as well as in regulatory matters involving a variety of consumer protection laws. Caren also advises fintech companies, law firms, and collection agencies regarding an array of consumer finance issues. An active writer and speaker, Caren currently serves as chair of the Debt Collection Practices and Bankruptcy subcommittee for the American Bar Association’s Consumer Financial Services Committee. She is also a member of the Defense Bar for the National Creditors Bar Association, the North Carolina State Chair for ACA International’s Member Attorney Program and a member of the Bank Counsel Committee of the North Carolina Bankers Association. Most recently, she was elected to the Governing Committee for the Conference on Consumer Finance Law. In 2018, Caren was named one of the “20 Most Powerful Women in Collections” by Collection Advisor, a national trade publication. Caren oversees a blog titled: Consumer Financial Services Litigation and Compliance dedicated to consumer financial services and has been published in a number of publications including the Journal of Taxation and Regulation of Financial Institutions, California State Bar Business Law News, Banking and Financial Services Policy Report and Carolina Banker. ...LEARN MORE