Law Professors Double Down on Calling for ABA to Retract Endorsement of Debt Collection Bill

A pair of law professors — and members of the American Bar Association — are calling out the ABA for endorsing the Practice of Law Technical Clarification Act of 2018, which would exempt lawyers “engaged in litigation activities” from complying with the Fair Debt Collection Practices Act, saying that the bill would only put more individuals at risk of being subjected to unethical debt collection activities and perpetuate the negative stereotype associated with lawyers.

One of the professors — Jeff Sovern — had previously expressed his thoughts about the ABA’s endorsement of the bill, calling it “wrong-headed.”

The ABA’s argument in favor of exempting lawyers from complying with the FDCPA is that attorneys are already bound to follow the ABA’s Code of Ethics. But that code is not strong enough to protect consumers from some of the violations that the professors have seen and heard are committed by lawyers when trying to collect on unpaid debts, they counter in their article.

“Lawyers have long had a questionable public image,” wrote Sovern and Gina Calabrese. “The ABA’s attempt to protect misbehaving collection attorneys does more to aid lawyers’ critics than help lawyers. Congress should reject the ABA’s plea.”

Even members of the ABA’s Consumer Financial Services Committee have called on the ABA to retract its endorsement of the bill.

“Unfortunately, abusive litigation practices are common,” the members wrote in a letter to the president of the ABA. “These practices include: seeking illegal fees; filing suit in courts thousands of miles from consumers’ homes; suing on ancient zombie debt; robo-signing without evidence; misusing state garnishment proceedings; and filing suit against the wrong person or for the wrong amount.

“The ABA should not attempt to shield abusive debt collection attorneys from the FDCPA and CFPB enforcement. Instead, it should align itself with vulnerable consumers and make clear that it rejects litigation practices that violate the law. Instead of arguing for special treatment for attorneys, the ABA should instead stand for the idea that no one – including members of the bar – is above the law.”

If passed, the bill would amend the FDCPA to add the following language into the section of the bill that details the types of individuals and institutions that are not part of how the law defines a “debt collector.”

• Any law firm or licensed attorney, to the extent that
  • (i) such firm or attorney is engaged in litigation activities in connection with a legal action in a court of law to collect a debt on behalf of a client, including
    • serving, filing, or conveying formal legal pleadings, discovery requests, or other documents pursuant to the applicable statute or rules of civil procedure;
    • communicating in, or at the direction of, a court of law (including in depositions or settlement conferences) or in the enforcement of a judgment; or
    • any other activities engaged in as part of the practice of law, under the laws of a State in which the attorney is licensed, that relate to the legal action; and
  • (ii) such legal action is served on the defendant debtor, or service is attempted, in accordance with the applicable statute or rules of civil procedure