The federal trade commission filed suit

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Reference no: EM132193038

Barry Sussman graduated from law school, but also served time in prison for attempting to collect debts by posing as an FBI agent. He theorized that if a debt-collection business collected only debts that it owned as a result of buying checks written on accounts with insufficient funds (NSF checks), it would not be subject to the Federal Debt Collection Practices Act (FDCPA). Sussman formed Check Investors, Inc., to act on his theory. Check Investors bought more than 2.2 million NSF checks, with an estimated face value of about $348 million, for pennies on the dollar. Check Investors added a fee of $125 or $130 (more than the legal limit in most states) to the face amount of each check and aggressively pursued its drawer to collect. The firm's employees were told to accuse drawers of being criminals and to threaten them with arrest and prosecution. The threats were false. Check Investors never took steps to initiate a prosecution. The employees contacted the drawers' family members and used "saturation phoning"—phoning a drawer numerous times in a short period. They used abusive language, referring to drawers as "deadbeats," "retards," "thieves," and "idiots." Between January 2000 and January 2003, Check Investors netted more than $10.2 million from its efforts.

The Federal Trade Commission filed a suit in a federal district court against Check Investors and others, alleging, in part, violations of the FDCPA. Was Check Investors a "debt collector," collecting "debts," within the meaning of the FDCPA? If so, did its methods vio- late the FDCPA? Were its practices unethical?

1. The ___________ attempts to prevent abuses by collection agencies (fair debt collection practices act, fair credit reporting act, or fair and accurate credit transactions act)

2. The __________ regulates and enforces the laws relating to debt collectors. (federal trade comission, federal collection commission, federal communications commission)

3. the following are considered debt collectors under the FDCPA: _____________ (debt-collection agencies, or consumers) and _____________ (attorneys who regularly collect debt, consumers).

A debt collection agency may not do any of the following:

4. contact the debtor at the debtor's place of employment if the ___________ (debtor, debtor's) employee objects.

5. contact the debtor at ________ (8 am, 10 am, 5 pm, 3 am)

6. contact the debtor's _________ (spouce, financial advisor, neighbor)

7. _____________ ( threaten the debtor, call the debtor on his cell phone)

8. ______________ (contact the debtor after recieving notice that the debtor is refusing to pay, call the debtor to advise that further action may be taken.

9. in this case, check investors ________(was, was not) a debt collector under the FDCPA, and its practices were considered _________(illegal, legal) and ________(ethical, unethical)

what if the facts were different?

What if Check Investors was attempting to collect its own debt (e.g, a direct obligation between the debtor and Check Investors), rather than collecting a debt that was purchased from a third party?

10. in this scenario, check investors _________ (would, would not) be considered a debt collector under the FDCPA, and it's practices would be considered __________ (illegal, legal) and _________ (ethical, unethical).

Reference no: EM132193038

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