Tuesday, December 13, 2011

FDCPA Alternative: Unfair debt collection & abusive tactics as an actionable common-law tort

Debt collector abuse and harrassment of people who can't pay money they owe (or don't even owe it) as a common-law tort

Apparently there survives a common-law cause of action against abusive debt collectors under judicial precedents that is available along with the more commonly invoked federal and state statutes that have created a private causes of action against debt collectors who overstep the boundaries and engage in abuse and/or harassment: the Fair Debt Collection Practices Act (FDCPA) and its state counterpart: The Texas Debt Collection Act. Chapter 392 of the Texas Finance Code.


Unfair collection practices is an intentional tort derived from the common law. EMC Mortg. Corp. v. Jones, 252 S.W.3d 857, 868 (Tex. App.—Dallas 2008, no pet.); see Duty v. Gen.Fin. Co., 154 Tex. 16, 273 S.W.2d 64, 66 (1954). The Supreme Court of Texas has not directly addressed the elements to be proven in an action for unfair collection practices. See, e.g., Duty, 273 S.W.2d at 66 (“A decision of the case before us does not require that we undertake to outline the limits to which such a creditor may go, but we do hold that resort to every cruel device which his cunning can invent in order to enforce collection when that course of conduct has the intended effect of causing great mental anguish to the debtor, resulting in physical injury and causing his loss of employment, renders the creditor liable to respond in damages.”); Moore v. Savage, 362 S.W.2d 298, 298–99 (Tex. 1962) (per curiam) (refusing to review the definition of “unreasonable collection efforts” because the issue was not preserved for appeal), ref’g appeal from 359 S.W.2d 95, 96 (Tex. Civ. App.—Waco 1962, writ ref’d n.r.e.). While the elements are not clearly defined and the conduct deemed to constitute an unreasonable collection effort varies from case to case, a plaintiff must generally prove that “[a] defendant[’s] debt collection efforts ‘amount to a course of harassment that was willful, wanton, malicious, and intended to inflict mental anguish and bodily harm.’” EMC Mortg. Corp., 252 S.W.3d at 868-69.

Texas courts have found the following evidence sufficient to state a cause of action for unreasonable debt collection: sending a large man to the plaintiff’s home, who “yelling and screaming, demanded the keys to the house, and told the [Plaintiff’s] family to get out.” EMC Mortg. Corp., 252 S.W.3d at 864, 870; falsely accusing the plaintiff of committing a crime to collect a debt, Lloyd v. Myers, 586 S.W.2d 222, 227 (Tex. Civ. App.—Waco 1979, writ ref’d n.r.e.); sending a large man to the plaintiff’s home, who stood over the plaintiff shouting, shaking his finger and calling him a liar, Credit Plan Corp. of Houston v. Gentry, 516 S.W.2d 471, 475 (Tex. Civ. App.—Houston [14th Dist.] 1974) rev’d on other grounds in Gentry v. Credit Plan Corp. of Houston, 528 S.W.2d 571 (Tex. 1975); sending a representative to the plaintiff’s home, confronting and embarrassing the plaintiff’s fiancĂ©e in front of social guests, Bank of N. Am. v. Bell, 493 S.W.2d 633, 635 (Tex. Civ. App.—Houston [14th Dist.] 1973, no writ); calling the plaintiff five times in one night, with the final call including a threat of personal violence, Pioneer Finance & Thrift Corp. v. Adams, 426 S.W.2d 317, 319 (Tex. Civ. App.—Eastland 1968, writ ref’d n.r.e.).

Texas courts have also held that it is unreasonable to persist in collection efforts once the debtor has informed the collector/lender that the debt has been paid in full. See Pullins v. Credit Exch. of Dallas, Inc., 538 S.W.2d 681, 683 (Tex. Civ. App.—Waco 1976, writ ref’d n.r.e.) (holding that repeated and harassing efforts to collect $50 debt were unreasonable where plaintiff consistently asserted debt was paid).

The Fifth Circuit has observed that the tort of unreasonable collection is intended to deter “outrageous collection techniques.” McDonald v. Bennett, 674 F.2d 1080, 1089 n.8 (5th Cir. 1982).
SOURCE: SAN ANTONIO COURT OF APPEALS - 04-10-00551-CV – 12/07/11 


An unreasonable collection effort is an intentional tort when there was "a course of harassment that was willful, wanton, malicious, and intended to inflict mental anguish and bodily harm." EMC Mortg. Corp. v. Jones, 252 S.W.3d 857, 868 (Tex.App.-Dallas 2008, no pet.). "A recent survey of Texas decisions indicates that the tort of unreasonable collection `is intended to deter outrageous collection techniques,' particularly those involving harassment or physical intimidation." Thomas v. EMC Mortg. Corp, 499 Fed. Appx. 337, 342 (5th Cir. 2012)(quoting Hidden Forest Homeowners Ass'n v. Hern, No. 4:10-CV-00551, 2011 WL 6089881, at *4 (Tex. App.-San Antonio 2011, no pet. h.)). The course of harassment must be "willful, wanton, malicious, and intended to inflict mental anguish and bodily harm." Water Dynamics, Ltd. HSBC bank USA, Nat. Ass'n, 509 Fed. Appx. 367, 370 (5th Cir. 2013). In particular, courts have applied this cause of action based on actions that overstep the bounds of routine collection methods and rise to the level of excessive harassment. EMC Mortg. Corp, 252 S.W.3d at 864-65 (lender sent a "large, very intimidating man" who was "yelling and screaming, demanded the keys to to the house, and told [plaintiffs'] family to get out"); Bank of N. Am. v. Bell, 493 S.W2d 633, 635 (Tex. Civ. App.-Houston [14th Dist.] 1973, no writ)(harassing conduct included twenty to twenty-three phone calls in a ten-day period to the plaintiff's home and work, in addition to threatening in-person visits). In contrast, reliance on oral representations from customer-service representatives contradicted by the terms of the loan agreement and notice of foreclosure do not constitute unreasonable collection efforts. Milton, 508 Fed. Appx. at 330.

Dickey v. State Farm Bank, FSB, Dist. Court, SD Texas 2018  


  1. How to reverse boycott debt collectors.

    When a debt collector/debt collection/debt buyer company can repeatedly call with the intent of getting money their customers can repeatedly answer or call back with the intent of not giving them any. They need people to pay with as little talk as possible. They don't want to talk with people who know they are never going to pay. Be all talk and no pay. Answer when convenient. Call back. Give no information. Verify nothing. Ask as many questions as you can. Answer none.

    Don't ignore/block/report them. It doesn't work. These folks want you to ignore them for as long as you can stand to or until you give them something valuable like money or information. Ignoring them is being their good customer. Sending a cease and desist is giving information. It lets them know you are still alive and remain their good customer. Preparing to initiate unlikely individual legal battles is being their good customer.

    Be their bad customer. Make them talk to you fruitlessly for as long as they can stand to or until they stop selecting you as their customer. These companies cannot spend seconds much less minutes on the phone with every person who will never send them a dime. But they don't know who that is. You do. That knowledge is power. Every second you can keep their staff on the phone will render their business less profitable giving them a reason to never call you again.

    Calling will not reset your SOL. Making a partial payment will.

    One person who does this likes to ask general questions they should but usually won't answer, "May I have the name and address of your agent for service of process?" Calmly and slowly ask them to spell every word in the address. Read it back for verification. Control the pace. If they are rushing then politely ask them to slowly repeat. "Are you a corporation and if so in which state are you incorporated?" Repeat your questions when you don't get direct answers. When they won't answer a question ask, "Would you like to comply with the business and professions codes of your state?" That is usually the point when they hang up on me but if they say they want to comply then begin your questions again.

    Repeat while you have the spare time. These folks have many victims and few operators. If everyone calls back but pays nothing the mass auto-dialer business model becomes unprofitable. Don't aid and comfort the enemy by ignoring them. Call! Have a nice long slow friendly chat! Make them hang up first.

    Press 2 for Spanish.

    There are certainly enough victims to take down this company so ignoring/blocking seems downright Orwellian to me. Really? We're just going to passively submit and go with a block list or however we manage ignoring an endless stream of unwanted phone calls day after day? No! Unite or remain conquered. Answer/return every call - become well practiced at keeping these folks on the phone - or count yourself not amongst the free.

    1. Or if amounts are legally due and owing, you could approach the communication as a professional and arrange payment arrangements that fit within your budget. Why would you not want to be responsible for a debt that you voluntarily incurred? You accepted a good or service. You did not pay for that good or service. Where is the personal responsibility?

      If the debt is not due and owing explain that to them, simply say the debt is disputed and tell them to contact the original creditor. If they persist, send them a written cease and desist. If they persist after that point, they have violated both the FDCPA and Texas Finance Code and statutory damages are in play.

      Debt collection involves both parties treating the other with respect and communicating clearly.