Commercial Debt Collection Statutes for Florida

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Commercial-Debt Collection Statutes for Florida:

NOTE: Commercial collection agencies are required to register with the state using the Florida Division of Consumer Finance’s (DOCF) online licensing system (REAL).

FLORIDA-Definitions

As used in this part:

  • Claim or commercial claim: Any obligation for the payment of money or its equivalent arising out of a transaction wherein credit has been offered or extended to any person, and the money, property, or service which was the subject of the transaction was primarily for commercial purposes and not primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment. The term includes an obligation of a person who is comaker, endorser, guarantor, or surety as well as the person to whom such credit was originally extended.
  • Commercial collection agency: Any person engaged, as a primary or secondary business activity, in the business of soliciting commercial claims for collection or in the business of collecting commercial claims, asserted to be owed or due to another person, regardless of whether the collection efforts are directed at the primary debtor or some other source of payment.
  • Credit grantor: Any person or entity to whom a commercial claim is owed, due, or alleged to be owed or due, whether or not such person or entity is domiciled or doing business within this state and whether or not such commercial claim arose within this state. However, this term does not apply to any registrant under this part who has received an assignment or transfer of a commercial claim in default solely for the purpose of facilitating collection of such commercial claim for another.
  • Out-of-state collector: Any person or business entity engaged in the business of soliciting commercial claims for collection or of collecting commercial claims whose business activities in this state are limited to collecting commercial claims by means of interstate communications, including telephone, mail, or facsimile transmission, originating from outside this state.

Fla. Stat. Ann. § 559.543 (West, WESTLAW through Ch. 352 and H.J.R. No. 1723, H.J.R. 1177 and S.J.R. No. 2144 (End) of the 2005 First Reg. Sess. of the 19th Leg.).

FLORIDA-Exemptions

This section shall not apply to:

  • (a) A member of The Florida Bar, unless such person is primarily engaged in the collection of commercial claims.
  • (b) A financial institution authorized to do business in this state and any wholly owned subsidiary and affiliate thereof.
  • (c) A licensed real estate broker.
  • (d) A title insurance company authorized to do business in this state.
  • (e) A collection agency which is not primarily engaged in the collection of commercial claims.
  • (f) A consumer finance company and any wholly owned subsidiary and affiliate thereof.
  • (g) A person licensed pursuant to chapter 520.
  • (h) A credit grantor.
  • (i) An out-of-state collector as defined in this part.
  • (j) An FDIC-insured institution or subsidiary or affiliate thereof.

Fla. Stat. Ann. § 559.544(5) (West, WESTLAW through Ch. 352 and H.J.R. No. 1723, H.J.R. 1177 and S.J.R. No. 2144 (End) of the 2005 First Reg. Sess. of the 19th Leg.).

What is the Fair Debt Collection Practices Act?

The U.S. Congress enacted the FDCPA in 1977 and added it to the Consumer Credit Protection Act in 1978. Its purpose is to eliminate abusive practices of third-party debt collectors. To that end, the Act establishes guidelines for the conduct of debt collectors, defines the rights of consumers, and prescribes penalties for violations.

The FDCPA defines “debt collectors” as “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 debt … asserted to be owed or due another.”

“Consumers” and “debt” covered under the FDCPA are defined as specifically referring to personal, family or household transactions. Therefore, debts owed by businesses or by individuals for business purposes (commercial debts) are not subject to the FDCPA.

So, if the FDCPA does not apply to commercial debt collection by third parties, how are commercial collectors regulated?

There are no U.S. federal laws, similar to the FDCPA, that regulate third-party commercial (business-to-business) debt collection or provide guidelines for the conduct of commercial debt collectors.

Who is protecting the rights of commercial creditors and debtors?

Commercial Collection Agency Association

The premier body governing the activities of commercial debt collectors is the Commercial Collection Agency Association (CCAA), an arm of the Commercial Law League of America (CLLA). These organizations are not government bodies, nor do they have any jurisdiction over non-members. However, both require high standards of practice and ethics in order for a commercial collection agency to become a certified member.

The Commercial Collection Agency Association was established in 1972 to “improve the quality and reputation of the commercial collection industry.” It currently has more than 200 members. Approximately 100 core members represent the most prestigious commercial collection agencies in the United States.

The CCAA is an arm of the Commercial Law League of America (CLLA), the oldest creditor’s rights organization in the country established in 1895.

Membership in the CCAA

Members of the CCAA are the only collection agencies in the United States certified by the Commercial Law League of America. In order to obtain certification, the agency must meet rigorous criteria.

Certification Requirements

  • The agency must have been in business at least four years prior to application for membership.
  • 80% of the agency’s business must be commercial (business-to-business).
  • The agency must maintain a separate Trust Account into which all monies belonging to creditors are placed. This Trust Account is reviewed twice annually by the Executive Director of the CCAA.
  • The agency must agree to abide by the CCAA Code of Ethics, which sets ethical standards for dealing with creditors, debtors, and attorneys.
  • Executives of the agency must meet continuing educational requirements and attend regular CCAA meetings. The member agency must complete sixty continuing educational credits annually.
  • The agency must post a surety bond of at least $300,000 for the protection of the creditors it serves.
  • One person in the agency must also be a member of the Commercial Law League of America.
  • The agency must agree to random periodic site visits from the CCAA Executive Director.
  • The agency must be in compliance with all local and state licensing requirements and regulations governing commercial collection firms.

Primarily, the Commercial Law League of America and its Commercial Collection Agency Association have assumed responsibility for looking after the needs and rights of creditors and their customers/debtors. State governments that require licensing and bonding of commercial debt collectors also play an important role.

However, since membership in the CCAA is not compulsory, and some firms may provide collection services in a state but never get licensed, it is up to creditors to ensure they (and their debtors) are receiving the most ethical and highest level of commercial collection service.

How? Check to see if your Agency is both a member of the Commercial Collection Agency Association and therefore certified by the Commercial Law League of America, and is licensed in the U.S. states requiring such licensing.

Burt And Associates is a member of both CCAA and CLLA. Also, we are licensed and bonded in all 50 states (where required).