FDCPA & Credit Laws

FDCPA INTRODUCTION

Purpose of Act The United States Congress enacted the federal Fair Debt Collection Practices Act in 1977 in order to eliminate abusive debt collection practices by debt collectors, to ensure that debt collectors who do not use abusive debt collection practices are not competitively disadvantaged, and to promote consistent state action to protect consumers against debt collection abuses.

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Litigation Guide

     § 242.03 Texas Debt Collection Practices Act [1] Scope of Statute 

The Texas Debt Collection Practices Act (TDCPA) was enacted in 1973 and codified in 1997 [see Tex. Fin. Code Ch. 392]. The TDCPA does not displace the common-law action for unreasonable collection efforts [see § 242.02] or any other action arising from such efforts [see § 242.06]. 

The TDCPA states specifically that none of its provisions is to affect or alter any remedies at law or in equity otherwise available to debtors, creditors, governmental entities, or any other legal entity [Tex. Fin. Code § 392.404(b)]. In addition, a violation of any provision of the TDCPA is actionable as a violation of the Texas Deceptive Trade Practices Act [Tex. Fin. Code § 392.404(a); see Tex. Bus. & Com. Code § 17.01 et seq.; see also § 242.05; Ch. 220, Deceptive Trade Practices]. A debt collector who violates the TDCPA can be held liable for violations even when a contract between the parties covers those actions, and even when the debt collector’s prohibited conduct constitutes a contractual breach. A statutory offender is not shielded from liability merely by showing that its violation also violated a contract [McCaig v. Wells Fargo Bank (Texas), N.A., 788 F.3d 463, 475 (5th Cir. [Tex.] 2015)]. [2] Conditions Required for Recovery [a] Debt Collector Status The TDCPA distinguishes between creditors [Tex. Fin. Code § 392.001(3)] and debt collectors [Tex. Fin. Code § 392.001(6)]. Its prohibitions only apply to debt collectors [Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 722 (5th Cir. [Tex.] 2013)]. For purposes of the TDCPA, the term “debt collection” means any action, conduct, or practice in collecting, or in soliciting for collection, consumer debts that are due or alleged to be due a creditor [Tex. Fin. Code § 392.001(5); see [b], below (“consumer debt” defined)]. The term “debt collector” includes any person engaging directly or indirectly in debt collection [Tex. Fin. Code § 392.001(6)]. Under this definition, it does not appear that before a person is a debt collector under the TDCPA that the person’s principal business must be debt collection. For example, in one case the Dallas Court of Appeals concluded that a person with a principal business of issuing bail bonds was a debt collector for purposes of the TDCPA when attempting to collect his own debts arising from bonding transactions [Monroe v. Frank, 936 S.W.2d 654, 659–660 (Tex. App.—Dallas 1996, writ dism’d w.o.j.)]. The TDCPA also breaks out a third class of lienholders, which it calls “third-party debt collectors” [Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 722 (5th Cir. [Tex.] 2013); see [8][a], below]. In defining the term “third-party debt collector,” the Texas Act borrows the Federal Fair Debt Collection Practices Act’s definition of “debt collector,” which is “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” [Tex. Fin. Code § 392.001(7); 15 U.S.C. § 1692a(6); Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 722 (5th Cir. [Tex.] 2013)]. But a third-party debt collector under the TDCPA does not include an attorney collecting a debt as an attorney on behalf of and in the name of a client, unless the attorney has non-attorney employees who are either regularly engaged to solicit debts for collection or regularly make contact with debtors for the purpose of the collection or adjustment of debts [Tex. Fin. Code § 392.001(7)]. In another case, the plaintiff failed to show that a law firm and an attorney were debt collectors under the TDCPA when (1) the firm collected consumer debts for only two banks, (2) fewer than 5 out of 750 active files concerned consumer debt, (3) the firm had worked on about 10 consumer debt collection cases for creditors in the past five years, and (4) the attorney spent a tiny amount of time collecting consumer debts, had sent fewer than five demand letters in the last five years, and had spent less than an hour each month working on consumer debt collections [Catherman v. First State Bank of Smithville, 796 S.W.2d 299, 303 (Tex. App.—Austin 1990, no writ)]. The TDCPA’s definition of debt collector is broader than the definition under the FDCPA [Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 722 (5th Cir. [Tex.] 2013); see § 241.04[1][c]]. Unlike the TDCPA, the FDCPA expressly excludes from its definition of debt collector “any person collecting or attempting to collect any debt owed or due or asserted to be 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” [15 U.S.C. § 1692a(6)(F)(iii)]. This exclusion encompasses mortgage servicing companies and debt assignees when a mortgage debt was not in default at the time it was assigned by the originator [Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 723 (5th Cir. [Tex.] 2013)]. Servicers and assignees are debt collectors, and therefore are covered, under the TDCPA [Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 723 (5th Cir. [Tex.] 2013) (assignee of mortgage note and deed of trust securing note qualifies as debt collector under TDCPA irrespective of whether mortgage was already in default at time of its assignment)].   [b] Consumer Transaction The TDCPA applies only to consumer debts [Tex. Fin. Code §§ 392.001, 392.301]. A “consumer debt” is an obligation or an alleged obligation primarily for personal, family, or household purposes and arising from a transaction or alleged transaction [Tex. Fin. Code § 392.001(2)]. One court of appeals noted that, although the TDCPA does not define “personal,” its common meaning is “of or relating to a particular person; affecting one individual or each of many individuals; peculiar or proper to private concerns; not public or general” [Monroe v. Frank, 936 S.W.2d 654, 660 (Tex. App.—Dallas 1996, writ dism’d w.o.j.)]. The court of appeals concluded that there was sufficient evidence to support a finding that an individual who purchased a bail bond for a family friend incurred the debt for personal purposes because a reasonable fact finder could have found that the purchaser of a bail bond derived benefit for himself from the transaction [Monroe v. Frank, 936 S.W.2d 654, 660 (Tex. App.—Dallas 1996, writ dism’d w.o.j.)]. By definition, an obligation arising out of a commercial transaction is not a “consumer debt” under the TDCPA [see Ford v. City State Bank of Palacios, 44 S.W.3d 121, 135–136 (Tex. App.—Corpus Christi 2001, no pet.) (debt is not personal, and thus not a consumer transaction, when person incurred debt for family agricultural business, even though he alleged that business benefited himself and family); Pineda v. PMI Mortg. Ins. Co., 843 S.W.2d 660, 674 (Tex. App.—Corpus Christi 1992), writ denied, 851 S.W.2d 191 (Tex. 1993) (per curiam) (summary judgment denying debtors’ counterclaims under TDCPA was upheld because person who had insured payment of mortgage to lender had not engaged in “consumer transaction” between lender and mortgagee)]. A “consumer” is an individual who has a consumer debt [Tex. Fin. Code § 392.001(1); see Monroe v. Frank, 936 S.W.2d 654, 660 (Tex. App.—Dallas 1996, writ dism’d w.o.j.) (person who purchased bail bond for another person could be considered consumer)]. A “creditor” is a party to a consumer transaction other than a consumer [Tex. Fin. Code § 392.001(3)]. Persons who use credit cards for personal purposes have been held to be consumers under the TDCPA, and the obligation to return a canceled credit card has been held to be a “debt” within the meaning of the TDCPA [Ledisco Fin. Servs., Inc. v. Viracola, 533 S.W.2d 951, 955 (Tex. Civ. App.—Texarkana 1976, no writ)]. A cardholder who is not a Texas resident has standing to maintain an action against a collection agency under the TDCPA, when the agency is a Texas corporation and conducted its collection efforts in Texas. Residency in Texas is not required to qualify as a “consumer” under the TDCPA [Cushman v. GC Services, LP, 657 F. Supp. 2d 834, 841 (S.D. Tex. 2009)].   [3] Standing of Non-Debtor Both debtors and non-debtors have standing to sue under the TDCPA. The TDCPA allows “a person” to bring suit for statutory violations [Tex. Fin. Code § 392.403]. Persons who have sustained actual damages from a TDCPA violation have standing to sue [McCaig v. Wells Fargo Bank (Texas), N.A., 788 F.3d 463, 473 (5th Cir. [Tex.] 2015) (rule is supported by plain reading of statutory text and case law)]. Based on this language, courts have concluded that a person who is not the debtor can bring suit, as long as the non-debtor is adversely affected by the prohibited conduct [see Monroe v. Frank, 936 S.W.2d 654, 660 (Tex. App.—Dallas 1996, writ dism’d w.o.j.); Campbell v. Beneficial Fin. Co., 616 S.W.2d 373, 375 (Tex. App.—Texarkana 1981, no writ)]. One court of appeals explained this rationale: “To hold otherwise would be to find a legislative intent to protect debtors from the abuses the Act is designed to prevent, but to leave their families, friends and employers subject to these same abuses” [Campbell v. Beneficial Fin. Co. of Dallas, 616 S.W.2d 373, 374 (Tex. App.— Texarkana 1981, no writ)]. The abusive act must have occurred in connection with the collection or attempt to collect a debt owed, or allegedly owed, by a consumer [Campbell v. Beneficial Fin. Co. of Dallas, 616 S.W.2d 373, 374 (Tex. App.—Texarkana 1981, no writ); see [2][c], above]. For example, allegations of the son of a deceased mortgagor and the son’s wife, that they suffered mental anguish from a loan servicer’s unlawful debt collection efforts after they entered into a foreclosure forbearance agreement with the servicer, supported statutory standing to bring a private right of action against the servicer under the TDCPA, as persons who had suffered actual damages from TDCPA violations [McCaig v. Wells Fargo Bank (Texas), N.A., 788 F.3d 463, 473–474 (5th Cir. [Tex.] 2015)]. In this case, the court rejected the servicer’s contention that a TDCPA plaintiff must have been the target of the unlawful debt collection activity in order to have standing to sue [McCaig v. Wells Fargo Bank (Texas), N.A., 788 F.3d 463, 474 (5th Cir. [Tex.] 2015)].  

 [4] Debt Collector’s Intent Many of the provisions of the TDCPA do not require that the debt collector have a particular culpable mental state in order to commit a statutory violation [cf. Tex. Fin. Code § 392.302(1)–(4)]. Accordingly, the Texas Supreme Court has acknowledged that intent on the part of the wrongdoer is not generally a prerequisite to recovery under the TDCPA [Brown v. Oaklawn Bank, 718 S.W.2d 678, 680 (Tex. 1986) (analyzing prior version of TDCPA, Court rejected trial court’s findings of fact that debt collector had no wish or intent to injure debtors)]. The Court held that it is sufficient to show that the harm incurred was a reasonably foreseeable result of the wrongdoer’s conduct [Brown v. Oaklawn Bank, 718 S.W.2d 678, 680 (Tex. 1986)].   [5] Prohibited Acts   [a] Exclusivity of Specified Prohibitions All of the statutory prohibitions in the TDCPA [Tex. Fin. Code § 392.101 et seq.] are drafted in exclusive terms. That is, the prohibited acts and practices are spelled out, and there is no indication that the items listed are only examples on which the courts may build. Nonetheless, a provision of the TDCPA [Tex. Fin. Code § 392.404(b)] preserves all other “remed[ies] at law or in equity” and retains for the courts the flexibility that exists under the common-law tort of unreasonable collection practices [see § 242.02].   [b] Threats or Coercion In debt collection, a debt collector may not use threats, coercion, or attempts to coerce that employ any of the following practices [see Tex. Fin. Code § 392.301(a)]: 1. Using or threatening to use violence or other criminal means to cause harm to a person or property of a person [Tex. Fin. Code § 392.301(a)(1)]. 2. Accusing falsely or threatening to accuse falsely any person of fraud or any other crime [Tex. Fin. Code § 392.301(a)(2); see Brown v. Oaklawn Bank, 718 S.W.2d 678, 680 (Tex. 1986) (although statute prohibits only false accusations, Texas Supreme Court held that accusation or threat was prohibited regardless of whether person was guilty of fraud or other crime)]. 3. Representing or threatening to represent to a third person that a consumer is willfully refusing to pay a nondisputed debt when the debt is in dispute for any reason and the consumer has notified the debt collector in writing of the dispute [Tex. Fin. Code § 392.301(a)(3)]. This provision applies to disputes over the ownership of a debt as well as the amount of a debt [Schafer v. Fed. Servs. Corp., 875 S.W.2d 455, 456–457 (Tex. App.—Houston [1st Dist.] 1994, no writ)]. It offers some measure of protection to debtors against debt collectors’ practice of contacting a debtor’s employer as a coercive measure to collect a debt. This protection is somewhat illusory, however, because rarely will a debtor be aware of this protection before consulting an attorney and because the protection is triggered only by sending written notification to the collector that the debt is disputed [see Crow, The Texas Debt Collection Practices Act: Relief for the Harassed Debtor? 8 St. Mary’s L.J. 773, 782 n.64 (1977) (connection between this provision and credit reporting requirements); see also Ch. 234, Credit: Reporting and Discrimination]. 4. Threatening to sell or assign the consumer’s obligation, with an attending false representation that the result of the sale or assignment would be that the consumer would lose any defense to the alleged debt or would be subject to illegal collection attempts [Tex. Fin. Code § 392.301(a)(4)]. 5. Threatening that the debtor will be arrested for nonpayment of a consumer debt without proper court proceedings [Tex. Fin. Code § 392.301(a)(5); see Brown v. Oaklawn Bank, 718 S.W.2d 678, 680 (Tex. 1986) (accusation or threat is prohibited regardless of whether person is guilty of fraud or other crime)]. But a debt collector may tell a debtor that the debtor may be arrested after proper court proceedings if the debtor has violated a Texas criminal law [Tex. Fin. Code § 392.301(b)(1)]. 6. Threatening to file a charge, complaint, or criminal action against a debtor when the debtor has not violated a criminal law [Tex. Fin. Code § 392.301(a)(6)]. The Texas Supreme Court held, under a prior version of the TDCPA, that the threat of criminal prosecution violated the TDCPA, regardless of the creditor’s contention that the debtor was actually guilty of criminal offenses [Brown v. Oaklawn Bank, 718 S.W.2d 678, 680 (Tex. 1986)]. The Court, relying on the fundamental principle that a person is innocent until proven guilty, declined to accept a standard giving the creditor the power and authority to determine the guilt or innocence of an individual debtor [Brown v. Oaklawn Bank, 718 S.W.2d 678, 680 (Tex. 1986)]. However, a debt collector may threaten to institute a civil lawsuit or other judicial proceeding to collect a debt [Tex. Fin. Code § 392.301(b)(2); see Credit Bureau of Laredo, Inc. v. Texas, 515 S.W.2d 706, 711– 712 (Tex. Civ. App.—San Antonio 1974), aff’d, 530 S.W.2d 288 (Tex. 1975)]. 7. Threatening that the nonpayment of an alleged debt will result in the seizure, repossession, or sale of the person’s property without proper court proceedings [Tex. Fin. Code § 392.301(a)(7)]. But a debt collector may exercise or threaten to exercise a statutory or contractual right of seizure, repossession, or sale that does not require court proceedings [Tex. Fin. Code § 392.301(b)(3); McCaig v. Wells Fargo Bank (Texas), N.A., 788 F.3d 463, 477 (5th Cir. [Tex.] 2015) (provision does not apply to non-judicial foreclosure of mortgage); see Ch. 240, Foreclosure of Security Interests, Ch. 255, Real Property Security Interests]. 8. Threatening to take any action prohibited by law [Tex. Fin. Code § 392.301(a)(8); see, e.g., Dixon v. Brooks, 604 S.W.2d 330, 334 (Tex. Civ. App.—Houston [14th Dist.] 1980, writ ref’d n.r.e.) (creditor sent letters threatening to terminate contract for deed without providing required statutory notice); Rey v. Acosta, 860 S.W.2d 654, 659 (Tex. App.—El Paso 1993, no writ) (debt collector threatened to take action prohibited by Property Code Section 51.002(d) in demanding payment of entire outstanding debt under contract without providing required notice of acceleration and grace period); see also McCaig v. Wells Fargo Bank (Texas), N.A., 788 F.3d 463, 477–478 (5th Cir. [Tex.] 2015) (whether threat is “egregious” is immaterial); Biggers v. BAC Home Loans Servicing, LP, 767 F. Supp. 2d 725, 730–733 (N.D. Tex. 2011) (mortgagors stated claim for violation of TDCPA by alleging that mortgage assignee threatened foreclosure during debt collection attempts even though it had not given required earlier notice of default under deed of trust and opportunity to cure, and threatened to enforce deed of trust lien without having capacity to do so)]. A claim for a violation of this provision of the TDCPA is based on a threat of mortgage foreclosure generally turns on whether the mortgage was in default, because a default generally triggers a mortgagee’s right to foreclose under a deed of trust, and a mortgagor is entitled to have the sale set aside if the property is foreclosed on absent default [McCaig v. Wells Fargo Bank (Texas), N.A., 788 F.3d 463, 478 (5th Cir. [Tex.] 2015)]. For example, a home mortgage loan servicer’s written threats to foreclose were prohibited by law for purposes of Finance Code Section 392.301(a)(8), when it had executed a forbearance agreement after the loan had fallen into default in which it had given up the right to foreclose, as long as the agreement’s payment plan was followed and that plan was followed [McCaig v. Wells Fargo Bank (Texas), N.A., 788 F.3d 463, 478 (5th Cir. [Tex.] 2015)]. In another case, a bank did not waive its right to foreclose through behavior that was inconsistent with that right, i.e., multiple postponements of foreclosure to which it agreed while the mortgagors’ loan-modification application was pending. The deed of trust explicitly disclaimed any waiver by delay of foreclosure, and 16-242 § 242.03 none of the bank’s alleged actions was inconsistent with the right to foreclose on default, when there was no evidence that it promised that it would not foreclose or would continue offering postponements, or that it indicated that the mortgagors could stop paying or underpay without triggering acceleration or foreclosure [Thompson v. Bank of Am. N.A., 783 F.3d 1022, 1025 (5th Cir. [Tex.] 2015)]. Instead, the bank notified the mortgagors that they were in default and subject to foreclosure. The fact that the bank also invited the mortgagors to apply for a possible loan modification was not inconsistent with this notification. Postponing a foreclosure sale to give borrowers the opportunity to apply for a loan modification or negotiate another accommodation does not manifest an intent to waive the right to foreclose [Thompson v. Bank of Am. N.A., 783 F.3d 1022, 1026 (5th Cir. [Tex.] 2015)]. Because the bank did not waive its right, its foreclosure was not prohibited under Finance Code Section 392.301(a)(8), and was not a breach of the loan agreement [Thompson v. Bank of Am. N.A., 783 F.3d 1022, 1026 (5th Cir. [Tex.] 2015)].   [c] Harassment or Abuse In attempting to collect an alleged debt, a debt collector may not oppress, harass, or abuse a person by methods that employ the following practices [Tex. Fin. Code § 392.302]: 1. Using profane or obscene language or language that is intended to unreasonably abuse the hearer or reader. The burden of proving that the debt collector intended to abuse the hearer or reader appears to be on the debtor [Tex. Fin. Code § 392.302(1)]. 2. Placing telephone calls without disclosing the name of the individual making the call, and with the intent to annoy or harass or threaten any person at the called number [Tex. Fin. Code § 392.302(2)]. This provision is applicable against a person making annoying or harassing calls only if those calls are made in an effort to collect a debt [see Ledisco Fin. Servs., Inc. v. Viracola, 533 S.W.2d 951, 956 (Tex. Civ. App.— Texarkana 1976, no writ)]. 3. Causing expense to any person in the form of long distance telephone tolls, telegram fees, or other charges incurred by a medium of communication, without first disclosing the name of the person making the communication [Tex. Fin. Code § 392.302(3)]. 4. Causing a telephone to ring repeatedly or continuously or making repeated and continuous telephone calls, with the intent to harass any person at the called number [Tex. Fin. Code § 392.302(4); see Household Credit Servs., Inc. v. Driscol, 989 S.W.2d 72, 84–85 (Tex. App.—El Paso 1998, pet. denied) (examples of harassing and abusive conduct by debt collector)].   [d] Unfair or Unconscionable Means A debt collector may not collect or attempt to collect a debt by unfair or unconscionable means employing the following practices [Tex. Fin. Code § 392.303]: 1. Seeking or obtaining a written statement or acknowledgment in any form that specifies that a consumer’s obligation is incurred for necessaries of life if the obligation was not in fact incurred for necessaries [Tex. Fin. Code § 392.303(a)(1)]. 2. Collecting or attempting to collect any interest or other charge, fee, or expense incidental to the obligation unless the interest or incidental fee, charge, or expense is expressly authorized by the agreement creating the obligation or legally chargeable to the consumer [Tex. Fin. Code § 392.303(a)(2); see McCaig v. Wells Fargo Bank (Texas), N.A., 788 F.3d 463, 479 (5th Cir. [Tex.] 2015) (bank’s attempts to collect unauthorized late fees constituted unfair or unconscionable practices by debt collector in violation of TDCPA, even though it later removed these charges and ultimately did not collect late fees)]. Creditors may, however, charge reasonable reinstatement fees for renewal of a real estate loan or contract of sale, after default, if the additional fees are included in a written contract executed at the time of renewal [Tex. Fin. Code § 392.303(b)]. Although the TDCPA does not define “unconscionable,” courts may look for guidance to the treatment of this subject by the Business and Commerce Code [see Tex. Bus. & Com. Code § 2.302, Comment 1; see also Ch. 210, Sales, Ch. 220, Deceptive Trade Practices]. In one case, the court of appeals interpreted the prohibition of unfair and unconscionable means narrowly [see Rusk County Elec. Coop., Inc. v. Flanagan, 538 S.W.2d 498, 500 (Tex. Civ. App.—Tyler 1976, writ ref’d n.r.e.)]. In this case, the plaintiff sued for damages caused by unfair or unconscionable debt collection     Page 6 of 12 16-242 § 242.03   practices because the defendant-creditor wrongfully terminated the plaintiff’s electric service. The plaintiff also sought an award of attorney’s fees under the TDCPA [see Tex. Fin. Code § 392.403(b); see also [6][e], below]. The jury found that the defendant’s conduct was not a method of debt collection, but rather wrongful termination of electricity. Therefore, the court permitted a common-law recovery of the actual damages incurred as a result of the wrongful termination of electricity, but rejected the claim for attorney’s fees because the debtor failed to prove a violation of the TDCPA [see Rusk County Elec. Coop., Inc. v. Flanagan, 538 S.W.2d 498, 500 (Tex. Civ. App.—Tyler 1976, writ ref’d n.r.e.)].   [e] Fraudulent, Deceptive, or Misleading Representations In debt collection or obtaining information concerning a consumer, a debt collector may not use a fraudulent, deceptive, or misleading representation that employs the following practices [Tex. Fin. Code § 392.304]: 1. Using any name while engaged in the collection of debts other than the true business, professional, personal, or legal name of the debt collector or, if engaged in the collection of a credit card debt, the name appearing on the face of the credit card [Tex. Fin. Code § 392.304(a)(1)], or failing to maintain a list of all business or professional names known to be used or formerly used by individual persons collecting debts or attempting to collect debts for the debt collector [Tex. Fin. Code § 392.304(a)(2)]. 2. Falsely representing that the debt collector has information in the debt collector’s possession or something of value for the consumer to solicit or discover information about the consumer [Tex. Fin. Code § 392.304(a)(3)]. 3. Failing to clearly disclose, in any communication with the debtor, the name of the person to whom the debt has been assigned or is owed at the time of making any demand for money [Tex. Fin. Code § 392.304(a)(4)]. This provision does not apply to persons servicing or collecting real estate first lien mortgage loans or credit card debts [Tex. Fin. Code § 392.304(b)]. 4. Failing to disclose in the initial written or oral communication with the debtor that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose; or failing to disclose in a subsequent written or oral communication with the debtor that the communication is from a debt collector. This provision does not apply to a formal pleading in a legal action [Tex. Fin. Code § 392.304(a)(5)]. 5. Using any written communication that fails to indicate clearly the name of the debt collector and the debt collector’s street address, or post office box and telephone numbers when the written notice refers to an alleged delinquent consumer debt [Tex. Fin. Code § 392.304(a)(6)]. This provision does not require a debt collector to disclose the names and addresses of employees of the debt collector [Tex. Fin. Code § 392.304(c)]. 6. Using any written communication that demands a response to a place other than the debt collector’s or creditor’s street address or post office box [Tex. Fin. Code § 392.304(a)(7)]. This provision does not require a response to the address of an employee of a debt collector [Tex. Fin. Code § 392.304(e)]. 7. Misrepresenting the character, extent, or amount of a debt against a consumer [Thompson v. Bank of Am. N.A., 783 F.3d 1022, 1026 (5th Cir. [Tex.] 2015) (false statement must relate to character of debt); see, e.g., Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 723 (5th Cir. [Tex.] 2013) (assignee of mortgage note and deed of trust securing note did not misrepresent character, extent, or amount of debt in violation of TDCPA, absent allegations that assignee led mortgagors to think differently with respect to debt’s character, extent, amount, or status); Gonzalez v. Temple-Inland Mortg. Corp., 28 S.W.3d 622, 625 (Tex. App.—San Antonio 2000, no pet.) (genuine issue of material fact was raised when inference could be made from creditor’s application or debtor’s mortgage payments that creditor’s notice of acceleration of mortgage overstated amount owed by debtor); Waterfield Mortg. Co. v. Rodriguez, 929 S.W.2d 641, 644– 645 (Tex. App.—San Antonio 1996, no writ)] or misrepresenting the consumer debt’s status in any judicial or government proceeding [Tex. Fin. Code § 392.304(a)(8); see Cook-Bell v. Mortgage Electronic Registration, 868 F. Supp. 2d 585, 590–591 (N.D. Tex. 2012) (complaint that alleged that homeowner’s loan “was procured by fraudulent and/or predatory and/or unconscionable means,” but that did not allege any actual unfair or inappropriate debt collection practices, failed to state claim under either FDCPA or TDCPA)]. To violate the TDCPA using a misrepresentation, the debt collector make an affirmative statement that is false or misleading [Thompson v. Bank of Am. N.A., 783 F.3d 1022, 1026 (5th Cir. [Tex.] 16-242 § 242.03 2015)]. A bank did not violate Finance Code Section 392.304(a)(8) or the catchall provision [see Tex. Fin. Code § 392.304(a)(19)] by allegedly misrepresenting that the mortgagors’ loan-modification application was under review, that it needed or received documents, or that a trial payment plan was being created. Its modification-related statements did not relate to the character, extent, or amount of the loan, nor did they concern the collection of a debt [Thompson v. Bank of Am. N.A., 783 F.3d 1022, 1026 (5th Cir. [Tex.] 2015)]. 8. Falsely representing that a debt collector is vouched for, bonded by, affiliated with, or an instrumentality, agent, or official of the State of Texas or any agency of federal, state, or local government [Tex. Fin. Code § 392.304(a)(9)]. 9. Using, distributing, or selling any written communication that simulates or falsely represents to be a document authorized, issued, or approved by a court, an official, a governmental agency, or any other legally constituted or authorized governmental authority, or that creates a false impression about its source, authorization, or approval [Tex. Fin. Code § 392.304(a)(10)]. 10. Using any seal, insignia, or design that simulates that of any governmental agency [Tex. Fin. Code § 392.304(a)(11)]. 11. Representing that a debt may be increased by the addition of attorney’s fees, investigation fees, service fees, or other charges if there is no written contract or statute authorizing these additional fees or charges [Tex. Fin. Code § 392.304(a)(12)] or representing that a debt will definitely be increased by the addition of attorney’s fees, investigation fees, service fees, or other charges if the award of the fee or charge is discretionary by a court of law [Tex. Fin. Code § 392.304(a)(13)]. 

\12. Falsely representing the status or true nature of the services rendered by the debt collector [Tex. Fin. Code § 392.304(a)(14)]. For example, mortgagors alleged sufficient facts to state a claim against an assignee of their mortgage note and deed of trust lien securing that note for misrepresenting the status or nature of the services that it rendered, when they alleged that the assignee repeatedly promised to send them a loan modification application and to delay foreclosure, but, notwithstanding its promises, it never responded to their submitted application and proceeded to foreclose on their property [Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 723–724 (5th Cir. [Tex.] 2013)]. 13. Using any written communication that violates federal postal laws and regulations [Tex. Fin. Code § 392.304(a)(15)]. 14. Using any communication that purports to be from an attorney or law firm when in fact it is not [Tex. Fin. Code § 392.304(a)(16)], or representing that a debt is being collected by an attorney if it is not [Tex. Fin. Code § 392.304(a)(17)].

 15. Representing that a debt is being collected by an independent bona fide organization engaged in the business of collecting past due accounts when the debt is being collected by a subterfuge organization under the control and direction of the person to whom the debt is owed [Tex. Fin. Code § 392.304(a)(18)]. This provision does not prohibit a creditor from owning or operating its own bona fide debt collection agency [Tex. Fin. Code § 392.304(e)]. 16. Using any other false representation or deceptive means to collect a debt or obtain information concerning a consumer [Tex. Fin. Code § 392.304(a)(19)]. A collection notice or statement that misstates the amount owed on a debt can constitute a misleading assertion regarding the debt for purposes of this prohibition [Lee v. Credit Management, LP, 846 F. Supp. 2d 716, 727 (S.D. Tex. 2012)]. But a vague reference to the defendant’s use of a false representation or deceptive means to collect a debt is insufficient to state a claim under this provision of the TDCPA [Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 724 (5th Cir. [Tex.] 2013)]. Likewise, communications in connection with the renegotiation of a loan do not concern the collection of a debt, but instead relate to its modification, and therefore do not state a claim under this catchall provision [Thompson v. Bank of Am. N.A., 783 F.3d 1022, 1026 (5th Cir. [Tex.] 2015)]. [f] Other Prohibited Practices No person may use the term “credit bureau,” “retail merchants,” or “retail merchants association” in a business or trade name unless that person is in fact engaged in gathering, recording, and disseminating favorable as well as unfavorable information relative to the creditworthiness, financial responsibility, paying habits, and other similar information regarding individuals, firms, corporations, and any other legal entity 16-242 § 242.03 being considered for credit extension so that a prospective creditor may be able to make a sound decision in the extension of credit. This prohibition does not apply to any nonprofit retail trade association consisting of individual members and qualifying as a bona fide business league as defined by the IRS and that does not engage in the business of debt collection or credit reporting [Tex. Fin. Code § 392.305; see Ch. 234, Credit: Reporting and Discrimination]. A creditor may not use an independent debt collector who repeatedly and continuously engages in acts or practices that are prohibited by the TDCPA after the creditor has actual knowledge that an independent debt collector is in fact repeatedly and continuously engaging in prohibited acts or practices [Tex. Fin. Code § 392.306]. [6] Remedies and Penalties [a] Injunctive Relief Any person may seek injunctive relief to prevent or restrain a violation of the TDCPA [Tex. Fin. Code § 392.403(a)(1)]. The person who brings suit for injunctive relief or damages does not have to be the consumer in the transaction [see § 242.03[3]; see also Campbell v. Beneficial Fin. Co., 616 S.W.2d 373, 374–375 (Tex. App.—Texarkana 1981, no writ) (parents of debtor had standing to bring suit against debt collector who threatened and harassed parents when they would not disclose whereabouts of child/debtor)]. The Texas Attorney General may seek a restraining order or injunction in an action brought in the name of the state against a person reasonably believed to be violating or about to violate a provision of the TDCPA [Tex. Fin. Code § 392.403(d)]. The scope of the injunction provision depends on judicial interpretation of the sections of the TDCPA prohibiting various practices, that is, whether those sections are construed narrowly or broadly, in exclusive or nonexclusive terms [see [5][a], above]. Only acts and practices prohibited by the TDCPA are subject to an injunction grounded on the statute [see [5][b]–[f], above].   [b] Actual Damages and Statutory Minimum Ordinarily, a person may recover actual damages sustained as a result of a violation of the TDCPA [Tex. Fin. Code § 392.403(a)(2)]. This means that the defendant’s violation must be shown to be a cause in fact of the compensable harm. Thus, it is not sufficient to demonstrate physical and psychological injuries unless those injuries can be linked to the actual violations of which the plaintiff complains [Elston v. Resolution Servs., Inc., 950 S.W.2d 180, 185 (Tex. App.—Austin 1997, no writ) (court held that although plaintiff’s statements in affidavit suggested that he suffered actual damages as result of his inability to pay debts and debt collector’s attempt to collect debts, statements did not show plaintiff suffered actual damages as result of violations of TDCPA alleged in petition)]. To recover actual damages under the TDCPA, the debtor must show that the harm incurred was a reasonably foreseeable result of the wrongdoer’s conduct [Brown v. Oaklawn Bank, 718 S.W.2d 678, 680 (Tex. 1986)]. In Brown, the Texas Supreme Court held that the debtors did not establish the extent of their actual damages as a matter of law when they presented evidence that they had difficulty resting and sleeping for an extended period, missed work, the strain of the overall situation affected one debtor’s work performance, and aggravated one debtor’s previous injury. Instead, the Court remanded the case to the trial court for determination of the damages [Brown v. Oaklawn Bank, 718 S.W.2d 678, 680–681 (Tex. 1986)]. A person who successfully maintains an action under the TDCPA for failure to maintain a bond, for failure to correct an inaccuracy in a debtor’s file, or representing or threatening to represent to another person that the consumer is wilfully refusing to pay a nondisputed debt must be awarded statutory damages of at least $100 for each violation of the Act [Tex. Fin. Code § 392.403(e); see Tex. Fin. Code §§ 392.101, 392.202, 392.301(a)(3)]. However, one court of appeals has held that a plaintiff must establish some actual damages to be entitled to the statutory minimum recovery of $100 per violation [Elston v. Resolution Servs., Inc., 950 S.W.2d 180, 183–184 (Tex. App.—Austin 1997, no writ) (not deciding whether grant of injunctive relief would support $100 award)].   [c] Emotional Distress 16-242 § 242.03 A significant protection provided to debtors by the TDCPA, compared to the traditional common-law action for unreasonable collection efforts [see § 242.02], is the ability to recover for mental suffering without having to independently prove physical harm, property damage, or other pecuniary injury [Brown v. Oaklawn Bank, 718 S.W.2d 678, 680 (Tex. 1986) (damages for “serious upset” and “strain of overall situation” were recoverable under TDCPA); Campbell v. Beneficial Fin. Co., 616 S.W.2d 373, 375 (Tex. App.—Texarkana 1981, no writ) (TDCPA action may be maintained without plea of physical illness or injury); Ledisco Fin. Servs., Inc. v. Viracola, 533 S.W.2d 951, 957 (Tex. App.—Texarkana 1976, no writ) (TDCPA expressly gives right of action for oppression, harassment, or abuse resulting from prohibited practices regardless of physical injury. Nonetheless, proof that the claimant suffered a substantial disruption in his or her daily life is probably necessary unless the wrongful collection efforts caused a severe physical injury [see Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995); see also Gonzalez v. Temple-Inland Mortg. Corp., 28 S.W.3d 622, 625626 (Tex. App.San Antonio 2000, no pet.) (affidavit testimony was insufficient to raise fact issue on mental anguish damages when debtors asserted generally that they “personally experienced a substantial disruption in [their] daily routine as a result of mental sensations of painful emotions, in the form of grief, indignation, stress, fear, loss of sleep, depression, and duress”; McCaig v. Wells Fargo Bank (Texas), N.A., 788 F.3d 463, 482–483 (5th Cir. [Tex.] 2015) (expert testimony is not required to show compensable mental anguish, which may be proven by testimony of plaintiff, third parties, or experts)]. [d] Exemplary Damages Exemplary damages may be awarded for malicious violations of the TDCPA [Waterfield Mortg. Co. v. Rodriguez, 929 S.W.2d 641, 646–647 (Tex. App.—San Antonio 1996, no writ) (exemplary damages were proper for debt collector’s “egregious” and “wrongful” conduct in willfully proceeding with judicial foreclosure on debtors’ house and eviction of debtors even though debt collector knew debtors were making good faith attempts to pay ever-escalating demands)]. The San Antonio Court of Appeals has suggested that although a finding of malice can be the foundation of exemplary damages, it is not the only foundation. Instead, the determination of the need for a exemplary award varies with the nature of the wrong, the circumstances of the parties, and the culpability of the wrongdoer [see Waterfield Mortg. Co., Inc. v. Rodriguez, 929 S.W.2d 641, 645 (Tex. App.—San Antonio 1996, no writ)]. Other factors to consider are how much the conduct offends the public sense of justice, the net worth of the wrongdoer, and compensation for plaintiff’s inconvenience and attorney’s fees [Ware v. Paxton, 359 S.W.2d 897, 898–899 (Tex. 1962)]. Imposing exemplary damages against a corporation is warranted only when the act is that of the corporation rather than the act of its employees or agents [Hammerly Oaks, Inc. v. Edwards, 958 S.W.2d 387, 391 (Tex. 1997)]. Accordingly, a corporation’s liability for punitive damages is based on different grounds from respondeat superior. Exemplary damages can properly be awarded against a corporation because of an act by an agent only if the court finds one of the following: (1) the principal authorized the doing and the manner of the act; (2) the agent was unfit and the principal was reckless in employing the agent; (3) the agent was employed in a managerial capacity and was acting in the scope of employment; or (4) the employer or a manager of the employer ratified or approved the act [Hammerly Oaks, Inc. v. Edwards, 958 S.W.2d 387, 391 (Tex. 1997)]. [e] Attorney’s Fees A person who successfully maintains an action under the TDCPA is entitled to an award of attorney’s fees reasonable in relation to the amount of work performed and costs [Tex. Fin. Code § 392.403(b); see also Jackson Law Office, P.C. v. Chappell, 37 S.W.3d 15, 30–31 (Tex. App.—Tyler 2000, pet. denied) (debtor was not entitled to award of attorney’s fees when debtor failed to prove actual damages caused by debt collector’s practices)]. The provision for attorney’s fees authorizes a recovery for all work expended in both the initial trial and any subsequent appeal. However, unless the issue is tried to the court, a jury question inquiring as to reasonable fees for appellate work must be submitted and answered by the jury. A request for such fees, made for the first time in an appellate brief, is too late and must be denied [Cent. Adjustment Bureau, Inc. v. Gonzales, 528 S.W.2d 314, 317 (Tex. Civ. App.—San Antonio 1975, no writ)]. A general plea for “reasonable attorney’s fees” probably is sufficient to authorize an award of fees in higher courts, when the plaintiff has obtained such an award from the trial court [Ledisco Fin. Servs., Inc. v. Viracola, 533 16-242 § 242.03 S.W.2d 951, 958 (Tex. Civ. App.—Texarkana 1976, no writ)]. Thus, the plaintiff should plead, prove, and request submission of a jury question or a finding of fact from the trial judge on, and obtain a judgment from the trial court for, reasonable attorney’s fees for both trial and appellate work [see Ch. 22, Attorney’s Fees].[f] Violation of DCPA Is Also Violation of DTPA A violation of the DCPA is specifically defined as a deceptive trade practice, allowing an action to be brought under the Deceptive Trade Practices Act [Tex. Fin. Code § 392.404(a); see § 242.05]. For further discussion, see Ch. 220, Deceptive Trade Practices.   [g] Misdemeanor Offense The DCPA provides that any person who violates any of its provisions is guilty of a misdemeanor, punishable on conviction by a fine of not less than $100 nor more than $500 for each violation [Tex. Fin. Code § 392.402(a), (b)]. The misdemeanor charge must be filed within one year of the date of the alleged violation [Tex. Fin. Code § 392.402(c)]. The penalty amount applies to each violation, not merely to each transaction or debt [Tex. Fin. Code § 392.402(b)].   [7] Defenses [a] Bona Fide Error A person is not liable for a violation of the DCPA if the action complained of resulted from a bona fide error, notwithstanding the use of reasonable procedures adopted to avoid such errors [Tex. Fin. Code § 392.401]. For the bona fide error defense to be available, the jury must find that reasonable procedures to avoid the error were adopted [Cent. Adjustment Bureau, Inc. v. Gonzales, 528 S.W.2d 314, 316 (Tex. Civ. App.— San Antonio 1975, no writ)]. Otherwise, the precise scope of this defense remains to be determined [see Waterfield Mortg. Co. v. Rodriguez, 929 S.W.2d 641, 647 (Tex. App.—San Antonio 1996, no writ) (court did not address collector’s alleged bona fide error defense because it was not raised by pleadings or evidence)]. [b] Suit Brought in Bad Faith or for Purposes of Harassment On a finding by a court that an action under the remedies provision of the DCPA [see Tex. Fin. Code § 392.403] was brought in bad faith or for purposes of harassment, the court must award the defendant attorney’s fees reasonably related to the work performed and costs [Tex. Fin. Code § 392.403(c)]. 

The Deceptive Trade Practices Act contains a similar provision [see Tex. Bus. & Com. Code § 17.50(c); see also Donwerth v. Preston II Chrysler-Dodge, 775 S.W.2d 634, 637 (Tex. 1989) (court, not trier of fact, makes findings of bad faith and harassment to support award of attorney’s fees under DTPA); see also Ch. 220, Deceptive Trade Practices]. [c] Debtor’s Commission of Criminal Offense Is No Defense In a case involving threats of criminal prosecution, the Texas Supreme Court rejected a creditor’s defense that a debtor was guilty of criminal offenses. The Court reasoned that a person is innocent until proven guilty beyond a reasonable doubt, that a system of procedural protections is maintained to protect individuals against spurious allegations, and that allowing creditors to circumvent these procedures would make a mockery of the system. According to the Court, neither the creditor nor the trial court in a civil proceeding has the authority to determine the guilt or innocence of an individual debtor. Therefore, a creditor who threatens a debtor with criminal prosecution violates the DCPA as a matter of law [Brown v. Oaklawn Bank, 718 S.W.2d 678, 680 (Tex. 1986)]. This decision appears to nullify the statutory language that limits the wrongful practice to situations in which the debtor has not in fact violated any criminal law [see Tex. Fin. Code § 392.301(a)(6)—creditor may not threaten to file charges, complaints, or criminal action against debtor when in fact debtor has not violated any criminal laws; see also Tex. Fin. Code § 392.301(a)(2)—creditor may not falsely accuse or threaten to falsely accuse person of fraud or other crime].  [8] Third-Party Debt Collectors and Credit Bureaus   [a] General Requirements and Definitions Third-party debt collectors and credit bureaus must obtain surety bonds [see [b], below] and take certain actions to correct inaccurate information in their files [see [d], below]. Additionally, a credit bureau has an obligation to furnish information to a person on whom it maintains a file [see [c], below]. In defining a “third-party debt collector,” the DCPA borrows the Federal Fair Debt Collection Practices Act’s definition of the term “debt collector,” which is “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” [Tex. Fin. Code § 392.001(7); see 15 U.S.C. § 1692a(6)], but the DCPA definition does not include an attorney collecting a debt as an attorney on behalf of and in the name of a client unless the attorney has nonattorney employees who (1) are regularly engaged to solicit debts for collection; or (2) regularly make contact with debtors for the purpose of collection or adjustment of debts [Tex. Fin. Code § 392.001(7)]. A “credit bureau” is a person who, for compensation, gathers, records, and disseminates information relating to the creditworthiness, financial responsibility, and paying habits of, and similar information regarding, a person for the purpose of furnishing that information to another person [Tex. Fin. Code § 392.001(4)]. [b] Bond Requirement A third-party debt collector or credit bureau may not engage in debt collection unless the third-party debt collector or credit bureau has obtained a surety bond issued by a surety company authorized to do business in Texas. A copy of the bond must  be filed with the secretary of state [Tex. Fin. Code § 392.101(a); see [b], below—definitions]. The bond must be in favor of any person who is damaged by a violation of the DCPA and in favor of the State of Texas for the benefit of any person who is damaged by a violation of the DCPA [Tex. Fin. Code § 392.101(b)]. The bond must be in the amount of $10,000 [Tex. Fin. Code § 392.101(c)]. A person who claims against a bond for a violation of the DCPA may maintain an action against the third- party debt collector or credit bureau and against the surety. The aggregate liability of the surety to all persons damaged may not exceed the amount of the bond [Tex. Fin. Code § 392.102].   [c] Report to Consumer A person may request information in a credit bureau’s files concerning that person. The credit bureau must provide the requesting person a copy of all information contained in its files concerning that person no later than the 45th day after the date of the request [Tex. Fin. Code § 392.201].   [d] Correction of Files An individual who disputes the accuracy of an item that is in a third-party debt collector’s or credit bureau’s file on the individual, and that relates to a debt being collected by the third-party debt collector, may notify the third-party debt collector of the inaccuracy in writing. The third-party debt collector must make a written record of the dispute. If the third-party debt collector does not report information related to the dispute to a credit bureau, the third-party debt collector must cease collection efforts until an investigation of the dispute determines the accurate amount of the debt, if any. If the third-party debt collector reports information related to the dispute to a credit bureau, the reporting third-party debt collector must initiate an investigation of the dispute and must cease collection efforts until the investigation determines the accurate amount of the debt, if any [Tex. Fin. Code § 392.202(a)]. Not later than the 30th day after the date a notice of inaccuracy is received, a third-party debt collector who initiates an investigation must send a written statement to the individual (1) denying the inaccuracy; (2) 16-242 § 242.03 admitting the inaccuracy; or (3) stating that the third-party debt collector has not had sufficient time to complete an investigation of the inaccuracy [Tex. Fin. Code § 392.202(b)]. If the third-party debt collector admits that the item is inaccurate, the third-party debt collector must immediately cease collection efforts related to the portion of the debt that was found to be inaccurate. Not later than the fifth business day after the date of the admission, the third-party debt collector must correct the item in the relevant file. On correction of the item, the third-party debt collector must send, to each person who has previously received a report from the third-party debt collector containing the inaccurate information, notice of the inaccuracy and a copy of an accurate report [Tex. Fin. Code § 392.202(c)]. If the third-party debt collector states that there has not been sufficient time to complete an investigation, the third-party debt collector must immediately (1) change the item in the relevant file as requested by the individual; (2) send to each person who previously received the report containing the information notice and a copy of the changed report; and (3) cease collection efforts [Tex. Fin. Code § 392.202(d)]. On completion of the investigation, the third-party debt collector must inform the individual of the determination of whether the item is accurate or inaccurate. If the third-party debt collector determines that the information was accurate, the third-party debt collector may again report that information and resume collection efforts [Tex. Fin. Code § 392.202(e)].