UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C.
20580
Division of Credit Practices
Bureau of Consumer Protection
|
|
December 22, 1992
Mr. Thomas Isgrigg
Vice President
United States Credit Bureau Inc.
P.O. Box 749 29
Los Angeles, California 90004
Dear Mr. Isgrigg:
This is in response to your letter of December 2, 1992 supplementing
the information provided in your inquiry of September 18, 1992.
My understanding of the information contained in both letters
is as follows:
- 1. The collection arrangement proposed by Los Angeles County
would require your firm to contact or mail a letter to the former
hospital patients stating that there is a balance due, followed
by other questions to the former patients relating to their
employment, dependents' assets and liabilities.
-
- 2. The letter would state that a balance was due, although
the County does not require that you demand payment.
-
- 3. If you did receive monies from the former patients in response
to the letter, the County requires you to advise it of the monies
collected and the County then in turn would advise you that
the account was then "assigned for collection."
-
- 4. The County considers the debts to be collected by your
firm as in default as they are usually two or more years old.
The accounts are not current accounts receivable.
-
- 5. All phone contacts with letters to the debtor would be
made in the name of United States Credit Bureau, Inc.
The term "debt collector" is defined in Section 803(6)
of the Fair Debt Collection Practices Act ("FDCPA")
as "any person who uses any instrumentality of interstate
commerce or the mails in any business the principal purpose of
which is the collection of any debts, or who regularly collects
or attempts to collect, directly or indirectly, debts owed or
due or asserted to be owed or due another . . .." Your first
letter or contact discussed above may result in monies being paid
to your firm by former patients. Additionally, the ultimate goal
of your actions under the proposed contract with Los Angeles County
is the collection of past due accounts. Therefore, it is clear
that the sending of such a letter is an attempt to "collect
directly or indirectly" debts owed or due to Los Angeles
County. Therefore, at the time you mail the collection letter
your firm would become subject to all of the requirements of the
FDPCA, including Section 809, and would continue to be subject
to the FDCPA for any subsequent collection efforts on behalf of
Los Angeles County. Failure by a collector to comply with the
provisions of the FDCPA could result in an enforcement action
by this agency.
Please be advised that the comments in my letter of November
10, 1992 concerning the use of the name United States Credit Bureau
remain unchanged.
The opinions expressed herein are unofficial and not binding
on the Commission; however, they do represent the current enforcement
position of the staff.
I hope this information will be helpful.
Sincerely,
Roger J. Fitzpatrick
Attorney
Division of Credit Practices
|