The Pitfalls of Collecting Receivables in Florida
Businesses all across the country are faced with the debacle of unpaid debt. In most states, businesses, or what are commonly referred to as original creditors, do not fall under the purview of debt collection laws when they seek to collect their consumer receivables. Florida, along with a couple other states, is the exception to this rule.
Unlike the Fair Debt Collections Practices Act (“FDCPA”), which primarily applies to collection agencies and third parties, the Florida Legislature, in the Florida Consumer Collections Practices Act (“FCCPA”), Section 559.77, Fla. Stat., has codified a list of prohibited activities in Section 559.72, Fla. Stat. In extreme cases, the statute allows for punitive damages and class action lawsuits. Unfortunately, many consumer attorneys will file these lawsuits against businesses without even sending a demand letter so that they can increase their attorneys’ fees and costs.
In Spinato v. Aaron’s Sales and Lease Ownership, 19 Fla. L. Weekly Supp. 1011b (Pasco Co. Ct. 2012), a lawsuit was brought by the mother of an individual who leased computer equipment from the defendant. Id. The defendant allegedly (1) left messages on the mother’s door asking her to call the defendant to discuss her account; (2) threatened to have the mother arrested for being an accomplice; and (3) threatened the plaintiff with legal action. Id.
The defendant argued that the mother lacked standing to bring her complaint. Id. The trial court, on the other hand, summed up the case as follows: “It is hard to believe that the actions of the [d]efendant as alleged could not be construed as a reasonable person to be an attempt to collect a debt from the [p]laintiff herself as opposed to her son who was the correct person who had leased the computer from her [d]efendant.” Id. (Emphasis supplied).
In Baker v. Federal Credit Corp., 17 Fla. L. Weekly Supp. 1026a (13th Jud. Cir. Ct. 2010), the circuit judge allowed the plaintiff to seek punitive damages after he alleged that the defendant: (1) called his residence multiple times and threatened to have him arrested; (2) threatened to report him to the IRS; and (3) called his wife a racist. Id. Moreover, in Campbell v. Providian Bank, 14 Fla. L. Weekly Supp. 644a (12th Jud. Cir. Ct. 2007), the circuit court found that a plaintiff could recover for emotional distress under the FCCPA.
While the cases outlined probably do not represent the practices of most honest, hardworking small business owners, collection agencies and collection law firms are trained in what can and/or cannot be said to consumers. Because of the liability that comes from the FDCPA and certain state collections laws, such as the FCCPA, collection agencies and collection law firms strictly monitor their communications with consumers in order to prevent these lawsuits. Unfortunately, it only takes a single customer to file a FCCPA lawsuit that could cause a business to incur tens of thousands of dollars in unnecessary legal expenses and fees.
Gill Law Firm has been in business almost twenty (20) years and focuses primarily on commercial debt recovery, small business and nonprofit startups. To find out how Gill Law Firm may assist your business collect its receivables, please contact Wayne Gill, Esq. via email at firstname.lastname@example.org or by phone at (561) 454-0301.