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Company Beware! Choose Your Actions Well When Collecting Your Own Debt

Businesses all across the country are faced with customers who, for one reason or another, fail to honor their agreements. In most states, businesses, or what are commonly referred to as “original creditors” (meaning that the debt originated with your company) are not regulated by debt collection laws when they seek to collect their consumer receivables.

Florida, is an exception to this rule.

Unlike the Fair Debt Collections Practices Act (“FDCPA”), which primarily applies to collection agencies and third parties, the Florida Consumer Collections Practices Act (“FCCPA”), Section 559.77, applies to original creditors: In other words, the law applies to small or large businesses like you!

The law lists a number of prohibited activities by creditors in Section 559.72. 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 plead for higher 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 Aaron’s Sales and Lease Ownership (Aaron’s Sales).

Aaron’s Sales allegedly (1) left messages on the mother’s door asking her to call the company to discuss her account; (2) threatened to have the mother arrested for being an accomplice; and (3) threatened the mother with legal action.

Aaron’s Sales argued that the mother lacked legal standing to bring her complaint. In other words, Aaron’s Sales argued that the mother was not a rightful party to the lawsuit because the transaction occurred between Aaron’s Sales and her son.

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 (Aaron’s Sales) as alleged could not be construed by 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 [d]efendant (Aaron’s Sales).”

Because Aaron Sales attempted to collect the debt from the mother, the court held that it was subject to an action under the FCCPA. Thus, it was also liable for any violations of that law, including the alleged threats to have the mother arrested for being an accomplice to her son's failure to pay the debt.

In Baker v. Federal Credit Corp., 17 Fla. L. Weekly Supp. 1026a (13th Jud. Cir. Ct. 2010), the court allowed the plaintiff to seek punitive damages after he alleged that Federal Credit Corp: (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. Moreover, in Campbell v. Providian Bank, 14 Fla. L. Weekly Supp. 644a (12th Jud. Cir. Ct. 2007), the court found that a plaintiff could recover for emotional distress under the FCCPA against a bank.

While the actions taken by the companies outlined above are not representative of the practices of most honest, hardworking small business owners, the point is this: Companies must be aware of potential liability under the FCCPA when collecting their own debts in Florida. Gone are the days when these actions applied only to third party collection agencies and law firms. Now, you the business owner, (and your employees/agents) must be very familiar with state collection laws or run the risk of being sued for hefty damages.

Founded in 1997, Gill Law Firm represents small, medium and large corporations in commercial debt recovery, small business and nonprofit startups throughout the state of Florida. To find out how the firm may help your company, please contact A. Wayne Gill, Esq. via email at or by phone at (561) 454-0301.

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