FDCPA

The Texas Debt Collection Act (TDCA) is the state-side counterpart to the federal Fair Debt Collection Practices Act (FDCPA). It is found in the Texas Finance Code within Title 5 (“TITLE 5. PROTECTION OF CONSUMERS OF FINANCIAL SERVICES”) and is denominated Chapter 392. It short title of Texas Finance Code Chapter 392 is DEBT COLLECTION. The legal citation is as follows: TEX. FIN. CODE § 392.001 et seq.

Screenshot of Texas Constitution and Statutes online lookup (TDCA)

The TDCA is sometimes referred to as TDCPA for Texas Debt Collection Practices Act, in analogy with the federal Fair Debt Collection Practices Act. The TDCA is often invoked together with the FDCPA, but it does not independently provide a basis for a civil action in federal court.

An FDCPA claim, by contrast, may be filed in state or federal court, but is subject to removal to federal court if asserted as an independent lawsuit in state court. U.S. District Court operate by different rules, which is a matter of much greater significance in Texas because the Texas state rules of procedure do not resemble the federal rules as much as those of other states. That difference includes the matter of what the pleadings have to look like, and how pleadings must be responded to. Since the consumer is the plaintiff in a fair debt collection action, the requirements are rather onerous to commence a viable action in federal court, or to pursue it after it is removed to federal court by the Defendant debt collector.

See Adams v. United States, N.A., No. 3:17-cv-723-B-BN, 2018 WL 2164520, at *11 (N.D. Tex. Apr. 18,2018) (holding that plaintiff’s failure to show facts that defendant was not authorized to collect such compensation under the Note constituted a failure to state a claim under Section 392.303(a)(2)); Westinde v. JP Morgan Chase Bank, N.A., No. 3:13-cv-3576-O, 2014 WL 4631405, at *8 (N.D. Tex. Sept. 16. 2014) (declaring that conclusory allegations are insufficient to state a claim under Section 392.303(a)(2)); Bircher v. Bank of New York Mellon, No. 4:12-cv-171, 2012 WL 3245991, at * 3 (N.D. Tex. Aug. 9, 2012) (finding plaintiff failed to state a plausible allegation of violation of § 392.303(a)(2) where petition contained scant factual specificity regarding any misrepresented amounts).

It is therefore advisable to seek attorney representation for such a lawsuit. Unlike the defense of debt collection suits, attorneys have an incentive to take such cases even if the Defendant has no money (or just enough for filing fees) because they provide an opportunity to recover attorney’s fees if the complaint about unfair debt collection is a valid one under the law.

SCOPE OF TDCA VS. FDCPA

The TDCA is broader than the federal fair debt collection act in that it includes within the definition of “collection” activities not reached by the FDCPA, and it also covers original creditors, which is not true of the FDCPA. That’s a good reason to add a TDCA to an FDCPA action if there is uncertainty as to whether the FDCPA covers the facts scenario at issue. Another good reason is that the FDCPA has a one-year statute of limitations whereas the TDCA has a longer one (at least 2 years, arguably 4). Therefore, a claim may be time-barred under the FDCPA but not not under the TDCA when both statutes prohibit the conduct on which the claim is based.

Legal cite for both jointly: Fair Debt Collection Practices Act and its state counterpart, the Texas Fair Debt Collection Practices Act. See 15 U.S.C. § 1692 (West, Westlaw through Pub.L. No. 114-49); Tex. Fin. Code Ann. § 392.001 et. seq. (West, Westlaw through 2015 R.S.).

DIFFERENCE IN DEFINITION OF DEBT COLLECTOR [Excerpt from court opinion]

Lamell asserts a claim against OneWest under the federal Fair Debt Collection Practices Act and its state counterpart, the Texas Fair Debt Collection Practices Act. See 15 U.S.C. § 1692 (West, Westlaw through Pub.L. No. 114-49); Tex. Fin. Code Ann. § 392.001 et. seq. (West, Westlaw through 2015 R.S.). Lamell challenges OneWest’s attempts to collect property taxes that Lamell was actively protesting and that Lamell claims he did not owe. OneWest moved for summary judgment on the ground that OneWest is not a debt collector within the meaning of the federal and state Fair Debt Collection Practices Acts.

With respect to the both the federal and state Fair Debt Collection Practices Acts, OneWest asserts that is not a debt collector within the meaning of 15 U.S.C. § 1692a(6). OneWest does not provide any additional citation or explanation for why it is not a debt collector under the Texas Fair Debt Collection Practices Act. OneWest simply cites the federal statute and alleges that it is not a debt collector under the Texas Fair Debt

The federal Fair Debt Collection Practices Act provides:

The term “debt collector” means 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.

15 U.S.C. § 1692(a). Section 1692(a)(6) further narrows the meaning of “debt collector” by excluding “any person collecting or attempting to collect any debt owed or due another to the extent such activity … concerns a debt which was not in default at the time it was obtained by such person.” See id. § 1692(a)(6)(F)(iii). Under 15 63*63 U.S.C. § 1692(a)(6), a debt collector does not include a mortgage servicing company that began servicing the mortgage before it was in default. See CA Partners v. Spears, 274 S.W.3d 51, 79 (Tex.App.-Houston [14th Dist.] 2008, pet. denied); Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 723 (5th Cir.2013). The summary-judgment evidence shows OneWest was servicing Lamell’s mortgage before the note went into default. As a matter of law, OneWest is not a debt collector under the Fair Debt Collection Practice Act. The trial court did not err in granting summary judgment with respect to Lamell’s claims under the federal Fair Debt Collection Practices Act. See CA Partners, 274 S.W.3d at 79; Miller, 726 F.3d at 723.

The Texas Fair Debt Collection Practices Act defines “debt collector” as “a person who directly or indirectly engages in debt collection and includes a person who sells or offers to sell forms represented to be a collection system, device, or scheme intended to be used to collect consumer debts.” Tex. Fin. Code Ann. § 392.001(6) (West, Westlaw through 2015 R.S.). There are no statutory exceptions. See id. The summary-judgment evidence shows that OneWest directly engaged in collecting a debt and therefore qualifies as a debt collector under the plain language of the Texas Fair Debt Collection Practices Act. See Miller, 726 F.3d at 723 (holding mortgage servicers are debt collectors under Texas Fair Debt Collection Practices Act). See also Smith v. Heard, 980 S.W.2d 693, 697 (Tex.App.-San Antonio 1998, pet. denied) (noting actors are not excused from provision of Texas Fair Debt Collection Practices Act because debt is owed directly to actor); Monroe v. Frank, 936 S.W.2d 654, 659-60 (Tex. App.-Dallas 1996, writ dism’d w.o.j.) (same).

Because OneWest was not entitled to judgment as a matter of law on its only summary-judgment ground against Lamell’s claim under the Texas Fair Debt Collection Practices Act, the trial court erred in granting summary judgment on this claim.[5]

https://statutes.capitol.texas.gov/Docs/FI/htm/FI.392.htm