Blawgletter’s heart swelled with pride today as we read the Third Circuit’s decision rejecting an ex-lawyer’s claim that the Fair Debt Collections Practices Act didn’t reach his repulsive behavior. His fertile — or febrile — mind birthed the notion that the FDCPA doesn’t apply to companies that buy NSF (non-sufficient funds) checks and that then try to collect the face amount plus big fees by such tactics as calling the check-writers "retards", threatening (falsely) to prosecute them criminally, and harrassing their moms. Federal Trade Comm’n v. Check Investors, Inc., Nos. 05-3558 & 05-3957 (3d Cir. Sept. 6, 2007).
We don’t deny his cleverness. His arguments seem plausible. For example:
- The NSF check-writers committed a crime or a tort (fraud) and therefore didn’t owe a "debt".
- They also didn’t count as "consumers" once the creditors sold their NSF checks.
- The collection companies qualified as "creditors" rather than "debt collectors" because they owned the checks and therefore inherited the original creditors’ status.
The Third Circuit, to its glory, saw through these sophistic — subtly deceptive — arguments. The court affirmed a permanent injunction against further debt collection by the defendants and an order that they disgorge $10.2 million of illicit profits. Bravo.