Collection agencies, law firms, and other individuals or entities that qualify as “debt collectors” under the federal Fair Debt Collection Practices Act (FDCPA) must abide by that law’s rules when attempting to collect HOA assessments. The FDCPA generally prohibits debt collectors from harassing or abusing consumers and also mandates certain disclosures. 

For example, a debt collector must always tell a consumer that he or she is a debt collector and may use the information provided by the consumer for debt collection. 15 USC. §1692e. 

The FDCPA is generally limited to third-party debt collectors, so creditors collecting their own debts are usually not subject to the statute. However, a few states have state laws that place similar restrictions directly on creditors.  See, e.g., Debt Collection Act, N.C.G.S, Chapter 75, Article 2. 

Initial Written Communication

In the first written communication with a consumer, a debt collector must disclose, among other things, the amount of debt and identity of the creditor—and that the consumer has the right to dispute or request verification of the debt. 15 USC. §1692g. In particular, in a first written communication, a debt collector must state the following:

  1. Amount of debt, 

  2. Name of creditor, and

  3. A statement that the debt will be assumed valid if not disputed by the consumer within 30 days, 

  4.  A statement that the collector will verify the debt and the contact information for the original creditor (if different than the current creditor) if either is requested within 30 days. 15 USC. 1692g.  

The FDCPA also prohibits any misrepresentations or misleading statements in collection letters.  Id.

Collection letters from “debt collectors,” as defined by the FDCPA, must always state that the communication is from a debt collector, and information obtained may be used for collecting the debt.  15 USC. §1692e.  

Moreover, under the FDCPA’s “cease and desist” provision, a consumer has the right to request that a debt collector discontinue further communications with the consumer. 15 USC. §1692c(c). If a written cease-and-desist request is provided, the collector cannot communicate with the consumer about that debt other than for specific, narrow purposes.  Id.

Who can a debt collector contact about a debt?

Under the FDCPA, a debt collector can contact a debtor him or herself, the debtor’s spouse, and anyone expressly authorized by the debtor.  15 USC. §1692d.  Debt collectors can only communicate with unrelated third parties with the consumer’s permission or if the communication is limited to identifying “location information” and does not disclose information about the debt itself.  15 USC. §§1692b, 1692d.

What are debt collectors forbidden to do?

The FDCPA includes a lengthy list of prohibitions placed upon debt collectors when collecting debts.  See generally, 15 USC. §§1692b – 1692g. 

In general, debt collectors cannot engage in “abusive,” “unfair,” or “misleading” conduct and cannot make misrepresentations or physical or criminal threats to consumers; use abusive or obscene language; or contact consumers at times known to be inconvenient (usually assumed to be before 8:00 a.m. or after 9:00 p.m.). 15 USC. §1692b – d.  

Debt collectors also cannot collect any amount (including interest, fees, charges, or expenses) not expressly authorized by the underlying agreement (the association’s declaration) or otherwise permitted by law.  

The FDCPA likewise prohibits threats to take actions a debt collector does not intend or has a legal right to take. Moreover, direct communication with a consumer known to be represented by counsel is also proscribed.

Court Decisions

  • Ladick v. Van Gemert, 146 F. 3d 1205 (10th Cir.1998). HOA fees are considered “debts” under the FDCPA.

  • Thies v. Law Offices of William A. Wyman, 969 F. Supp. 604 (S.D. Cal. 1997). A member of a homeowners association who owes a debt to the association is considered a “consumer” protected by the FDCPA.

  • Fuller v. Becker and Poliakoff, 192 F. Supp. 2d 1361 (M.D. Fla. 2002). If a law firm attempts to collect debts as a regular part of its practice, the firm is a “debt collector” under the FDCPA. 

  • Mashiri v. Epsten Grinnell & Howell, 845 F.3d 984 (9th Cir. 2017). A validation notice must notify a debtor “of the amount of the debt, to whom the debt is owed, her right to dispute the debt within thirty days of receipt of the letter, and her right to obtain verification of the debt.”

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