Legislation Introduced in Senate to Exempt Debt Collection Attorneys

Jun 23, 2014

The Fair Debt Collection Practice Technical Clarification Act was introduced to the House of Representatives in July 2013. According to an article by The Hill on August 20, 2013, “This bipartisan legislation simply excludes attorneys from the FDCPA when they are engaged in litigation activities that fall under the supervision of the court.”

However, this piece of legislation is not an outright ‘carte blanch exemption for attorneys. The Fair Debt Collection Practices Act still applies when attorneys are engaging in traditional collection activities.

The Fair Debt Collection Practice Technical Clarification Act was introduced by Sen. Patrick Toomey (R-Pa.). It is a companion bill to the House proposal (FDCPA), introduced by Rep. Ed Perlmutter (D-Colo.).

This act amends the Fair Debt Collection Practices Act by excluding the definition “debt collector”. According to GovTrack.us, this includes any law firm or licensed attorney: “(1) serving, filing, or conveying formal legal pleadings, discovery requests, or other documents pursuant to the applicable rules of civil procedure; or (2) communicating in, or at the direction of, a court of law or in depositions or settlement conferences, in connection with a pending legal action to collect a debt on behalf of a client.”

The purpose of this act is to restore balance. The Fair Debt Collection Practices Act only regulates the debt collection itself, not the practice of the law. Because of this, Congress repealed the attorney exemption to the act. Why? It would seem that it was because of the conduct in the backroom, not necessarily in the courtroom.

In a perfect scenario, the credit system would consist of creditors and consumers who repay what they owe. Once the credit is not repaid, however, it obviously results in higher credit costs. Attorneys then enter the system when people need to collect their money through the court system. The Dodd-Frank Act of 2010 altered the framework of this ecosystem with new rules, supervision, and compliance directives.

According to The Hill, “Legal strategies and advice are no longer sacrosanct.  Meanwhile, courts struggle with the issue of how the federal laws apply to attorney conduct in the courtroom, and the result has been a patchwork of conflicting outcomes.  Again, the ecosystem is in need of correction.”

According to ACA International, the Fair Debt Collection Practice Technical Clarification Act has been referred to the Senate Banking, Housing and Urban Affairs Committee as of May 13, 2014, for review. In addition, ACA International’s Legislative Committee will be reviewing the Senate version of the bill. Updates on its progress will be provided to its members.


Let us help you get a high risk merchant account today!

Get Started

Award winning.

  • 2012
  • 2013
  • 2014
  • 2015
  • 2016

Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

Live Chat