The Fair Debt Collection Practices Act (FDCPA) has strict rules regarding when a debt collector can and cannot communicate directly with the consumer. For example, a debt collector cannot communicate directly with the consumer if the collector knows the consumer is represented by an attorney except for in a limited set of circumstances.

The Seventh Circuit recently reviewed the issue of communicating with a consumer in the context of a collection lawsuit where the consumer’s attorney had not yet entered an appearance with the court but the debt collector knew that the consumer had an attorney. In Holcomb v. Freedman Anselmo Lindberg, LLC, No. 17-2532 (7th Cir. Aug. 21, 2018), the Seventh Circuit found no violation in this particular set of facts due to the way the Illinois Supreme Court Rules are written.

Factual and Procedural Background

Portfolio Recovery Associates purchased Betty Holcomb’s (plaintiff-appellee) credit card debt and hired Freedman Anselmo Lindberg, LLC (Freedman), a law firm, to collect it. Freedman filed a collections complaint in state court. Initially, Plaintiff-appellee represented herself in this action but at some point retained an attorney. Plaintiff-appellee’s counsel appeared on her behalf at several court hearings but never officially entered an appearance with the court.

Freedman went on to file a motion for default judgment against plaintiff-appellee. Per local state court rules, Freedman was required to serve the motion on the other party’s “attorney of record,” otherwise service would need to be made on the party. Since plaintiff-appellee’s attorney had not yet entered an appearance in the case, Freedman served the motion for default directly upon plaintiff-appellee as required by the court rules and on plaintiff-appellee's counsel.

Plaintiff-appellee then filed a claim against Freedman alleging that it violated the FDCPA by communicating directly with her even though Freedman knew she was represented by an attorney. The trial court granted summary judgment to plaintiff-appellee, a decision that Freedman appealed to the Seventh Circuit Court of Appeals.

The Decision

The Seventh Circuit overturned the trial court’s decision, stating that Freedman had no choice but to serve the motion for default upon the consumer. In making its decision, the Seventh Circuit delved into the FDCPA exceptions and the relevant state law.

Looking at the FDCPA, the court notes that the statute permits communication directly with a consumer even if the consumer is represented by counsel if the debt collector has “express permission of a court of competent jurisdiction.” The court found that the local court rules fall into that category.

The court noted that the Illinois Supreme Court Rules required Freedman to serve plaintiff-appellee directly. The Court Rules require that the party itself must be served if there is no attorney of record. The court was unswayed by plaintiff-appellee’s argument that Freedman knew of her attorney and had seen her attorney representing her at court hearings during this case. The court pointed to Illinois’ bright line rule that filing a written appearance or other pleading with the court is the only way to become an attorney of record. Since plaintiff-appellee’s attorney never filed a notice of appearance nor a signed pleading, plaintiff-appellee had no attorney of record for the purpose of service and thus service on plaintiff-appellee was proper. 

insideARM Perspective

While this ruling illuminates the bright-line rules of communicating with a consumer in this particular context, it is important to note that this is not universally applicable. The court looked directly at the Illinois Supreme Court Rules, which very specifically outline what is required to become an attorney of record and how to serve court documents on the other side. Other state court rules may differ, so it is important to review the facts of each situation individually.

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