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UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C.
20580
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Division of Credit Practices
Bureau of Consumer Protection
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January 5, 1993
Charles R. Stewart
3488 W. 5620 South
Bennion, Utah 84118
Dear Mr. Stewart:
This is in response to your December 18 letter requesting a staff
opinion concerning your dispute with a collection agency. The
collection agency is attempting to collect on a check you wrote
that was not honored by your bank. The collection agency allegedly
sent you two collection letters that apparently include the notice
required by Section 7-15-2(2) of the Utah Financial Institutions
Code. An attorney for the collection agency argues that this notice
renders unnecessary the Section 807(11) and Section 809 notices
required by the Fair Debt Collection Practices Act (FDCPA), which
this office enforces. I have enclosed a copy of the FDCPA for
your reference. The opinion of the Commission staff is that the
collection agency must include the FDCPA notices.
The collection agency's attorney apparently based his argument
on his reading of Section 817 of the FDCPA, which states:
The Commission shall by regulation exempt from the requirements
of this title any class of debt collection practices within
any State if the Commission determines that under the law of
the State that class of debt collection practices is subject
to requirements substantially similar to those imposed by this
title, and that there is adequate provision for enforcement.
Section 817 does not support the attorney's argument, however,
because the Commission has never exempted any class of debt collection
practices within the State of Utah, including those that comply
with Section 7-15-2(2) of the Utah Financial Institutions
Code. Moreover, it is unlikely that the Commission would grant
such an exemption because the requirements imposed by Section
7-15-2(2) are not substantially similar to those imposed by Sections
809(a) and 807(11) of the FDCPA. Section 809(a) provides, among
other things, that:
(a) Within five days after the initial communication
with a consumer in connection with the collection of any debt,
a debt collector shall, unless the following information is
contained in the initial communication or the consumer has paid
the debt, send the consumer a written notice containing --
. . .
(3) a statement that unless the consumer, within thirty
days after receipt of notice, disputes the validity of the debt,
or any portion thereof, the debt will be assumed to be valid
by the debt collector;
(4) a statement that if the consumer notifies the debt
collector in writing within the thirty-day period that the debt,
or any portion thereof, is disputed, the debt collector will
obtain verification of the debt or a copy of a judgement against
the consumer and a copy of such verification or judgment will
be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request
within the thirty-day period, the debt collector will provide
the consumer with the name and address of the original creditor,
if different from the current creditor.
In addition, Section 807(11) requires that a debt collector "disclose
clearly in all communications made to collect a debt or to obtain
information about a consumer, that the debt collector is attempting
to collect a debt and that any information obtained will be used
for that purpose."
The notice required by Section 7-15-2(2) of the Utah statute
(1) does not inform consumers of their right to dispute the debt,
(2) does not notify consumers of their right to obtain verification
of the debt, (3) does not inform consumers of their right to learn
the name and address of the original creditor, and (4) does not
disclose that the notice is an attempt to collect a debt. Thus,
not only has Utah not applied for exemption of any class of debt
collection activities within the State, it appears that such an
exemption would not have been granted in any event. Consequently,
the debt collector at issue must comply with the FDCPA, including
Sections 807(11) and 809.
The views expressed herein represent an informal staff opinion.
As such, they are not binding on the Commission. They do, however,
reflect the staff's current enforcement position.
Sincerely,
Thomas E. Kane
Attorney
Division of Credit Practices
Enclosure
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