FDCPA Violations: A Dealer's Guide to the Fair Debt Collection Practices Act

Here's the part most FDCPA articles bury: the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.) is a federal statute that regulates third-party debt collectors collecting consumer debts, and a business collecting its own accounts in its own name generally isn't a "debt collector" under it at all. If you run a buy here pay here lot and your office manager calls your own customers about late payments, most FDCPA violations are legally impossible for you to commit. That exemption is real. It's also narrower than most operators think, and it does nothing to protect you from the other laws that police collection conduct in Georgia.

Our automotive practice gets these calls in two flavors: the Georgia dealer running collections in-house who wants to know what the rules allow, and the dealer who hired an agency or a repo company and just inherited its conduct. This article answers both.

Who counts as a "debt collector" under the FDCPA

The Act defines a debt collector as someone in a business whose principal purpose is collecting debts, or who regularly collects debts "owed or due another" (15 U.S.C. § 1692a(6)). Two prongs, one theme: the statute targets the collection industry, people paid to chase other people's receivables.

A creditor is different. Under § 1692a(4), the creditor is the party who extended the credit in the first place. When you sell a truck on a buy here pay here contract, you're the creditor on that account. And when your own staff calls the customer about a missed payment, in your dealership's name, the Act expressly excludes them: an officer or employee of a creditor collecting in the creditor's name is not a debt collector (§ 1692a(6)(A)).

One more boundary worth knowing: the FDCPA covers only consumer debts, obligations incurred primarily for personal, family, or household purposes. Money one business owes another sits outside the Act entirely, so a dealer chasing an unpaid invoice from another dealer has no FDCPA problem in either direction.

Where creditors lose the exemption

The exemption follows the name on the collection effort, and that's where dealers get hurt. The statute pulls a creditor back in if, while collecting its own debts, it "uses any name other than his own which would indicate that a third person is collecting" (§ 1692a(6)). Send dunning letters from a made-up "recovery bureau," or have your in-house collector claim to be calling from an outside agency to sound scarier, and you've just made yourself a debt collector, subject to the whole Act.

A few more edges:

• Affiliated finance companies. Many BHPH operations assign their paper to a related finance company. If the related company takes the account before it's in default and services it under its own name, it generally stays on the creditor side of the line (§ 1692a(6)(F)). Take over accounts already in default and the analysis gets much less friendly.
• Debt buyers. The Supreme Court held in Henson v. Santander (2017) that a company collecting debts it bought outright isn't collecting debts "owed another." But a business whose principal purpose is debt collection is covered no matter whose paper it holds.
• Repo companies. Businesses whose principal purpose is enforcing security interests count as debt collectors for one section of the Act, § 1692f(6), which prohibits taking collateral when there's no present right to it.

What the FDCPA prohibits

For the collectors it covers, the Act draws bright lines. Section 1692d bans harassment: repeated calls intended to annoy or abuse, obscene language, threats of violence, publishing lists of debtors. Section 1692e bans false or misleading statements, and this is where most claims live: misstating the amount owed, implying government affiliation, claiming to be an attorney, or threatening a lawsuit, garnishment, or arrest the collector doesn't intend or isn't legally able to pursue. Section 1692f sweeps in unfair practices, like collecting fees the contract or the law doesn't authorize.

The communication rules are just as concrete. Under § 1692c, a collector can't call before 8 a.m. or after 9 p.m. local time, can't contact a consumer at work once it knows the employer prohibits it, and must stop communicating almost entirely once the consumer demands it in writing. Under § 1692b, a collector contacting a third party, a neighbor, employer, or relative, may ask for location information only. Telling your customer's boss or mother about the debt is itself a violation.

Validation notices and Regulation F

Within five days of first contacting a consumer, a covered collector must send a validation notice: the amount of the debt, the creditor's name, and the consumer's right to dispute within 30 days (§ 1692g). If the consumer disputes in writing during that window, collection must pause until the collector mails verification.

Regulation F (12 C.F.R. Part 1006), the CFPB rule that has implemented the FDCPA since November 30, 2021, turned the old standards mechanical. It presumes a violation when a collector calls a person more than seven times in seven days about a particular debt, or within seven days after speaking with them about it. It added a model validation-notice form, defined "limited-content messages" so voicemails don't disclose the debt, and it allows collection by email and text, provided every electronic message carries a reasonable way to opt out.

What FDCPA violations cost

Statutory damages are capped at $1,000 per lawsuit, not per call, plus any actual damages the consumer proves and, decisively in practice, costs and a reasonable attorney's fee (15 U.S.C. § 1692k). The fee-shift is what makes FDCPA litigation an industry: a $1,000 claim can carry a five-figure fee award, so consumer firms file these cases in volume. Class recoveries cap at the lesser of $500,000 or 1% of the collector's net worth. The consumer has one year from the violation to sue, and a collector can defeat liability by proving the violation was an unintentional, bona fide error that happened despite procedures reasonably designed to prevent it.

Georgia collection agency laws: lighter than you'd expect

Georgia regulates collection agencies less than almost anyone expects. There's no state license for debt collection agencies, no bonding requirement, and no Georgia mini-FDCPA creating a parallel state claim the way Texas and Florida statutes do. The operative regime for a collection agency working Georgia accounts is the federal Act itself, plus general Georgia law.

That "general Georgia law" does real work. The Georgia Fair Business Practices Act (O.C.G.A. § 10-1-390 et seq.) prohibits unfair or deceptive practices in consumer transactions, and deceptive collection conduct arising out of a consumer deal can draw an FBPA claim, with treble damages available for intentional violations. Ordinary tort law applies too: a harassment campaign can support an invasion-of-privacy claim, and a false statement about the debt to an employer can be defamation. No license doesn't mean no rules.

Why an exempt dealer still gets sued

The creditor exemption tells you which statute doesn't apply to you. It doesn't make an abusive collection call safe.

The TCPA has no creditor exemption. The Telephone Consumer Protection Act (47 U.S.C. § 227) restricts autodialed and prerecorded calls and texts made without the recipient's consent, and it applies to anyone placing them, creditors included. Statutory damages run $500 to $1,500 per call or text. A BHPH texting program blasting past-due reminders without documented consent can generate exposure that dwarfs anything the FDCPA could have produced.

Repossession is its own minefield. Georgia allows self-help repossession, but only without a breach of the peace (O.C.G.A. § 11-9-609). A repo that turns into a confrontation, a tow over the customer's physical objection, an entry into a closed garage, can produce claims for wrongful repossession, conversion, and trespass. Courts widely treat the breach-of-peace duty as one the dealer can't outsource, so your repo vendor's bad night can become your lawsuit.

Your vendors' conduct comes home. Hire a collection agency and the FDCPA applies to it in full. The federal claim is mostly the agency's problem, but the customer's lawyer will usually name the dealer too, on Georgia agency and tort theories, and the reputational hit from a collections horror story lands on your name, not the agency's. Vet your vendors' compliance, and put indemnification in the contract before you need it.

A collection-practices checkup, before someone else runs one

The dealers who end up defending these cases rarely set out to break rules. They inherited a call script, a texting tool, or a repo vendor and nobody ever looked at the whole machine. The fix is short work: review your scripts and letters against the conduct rules above (exempt or not, they're the standard a jury will hear described), audit your text-message consent records, confirm collections run under your real business name, and read your agency and repo contracts for compliance and indemnification language. We do exactly this for dealers and small businesses that carry their own paper, and a $500 Strategy Session is a flat-fee way to get it done. Collections, like floor plan financing, is a machine that works beautifully right up until nobody has read the paperwork underneath it.