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Florida's debt collection laws combine federal rules with stricter state-specific regulations. The Florida Consumer Collection Practices Act (FCCPA) applies to both original creditors and third-party collectors, making compliance critical for anyone involved in debt collection. Key points include:
Florida's rules demand careful attention to avoid penalties, especially for debt buyers and portfolio managers. Staying compliant ensures smoother operations and reduces legal risks.
Florida Debt Collection Laws: FCCPA vs FDCPA Comparison and Key Requirements
The Florida Consumer Collection Practices Act (Florida Statutes §559.55–559.785) is a state law aimed at protecting consumers from abusive, deceptive, and unfair debt collection practices. Unlike federal laws, the FCCPA applies to both third-party debt collectors and original creditors, creating additional compliance considerations for those involved in debt portfolio trading. For buyers evaluating Florida-based portfolios, this means factoring in state-specific regulations that go beyond federal standards.
Designed to complement the federal Fair Debt Collection Practices Act (FDCPA), the FCCPA provides even greater protections for consumers. When the two laws conflict, the one offering stronger consumer safeguards takes precedence. Florida courts often rely on FDCPA interpretations to ensure consistency when applying the FCCPA.
"The FCCPA is intended to protect consumers and is intentionally unfair to creditors." – Austin T. Hamilton, Esq., Jimerson Birr
Under this law, consumers can seek statutory damages of up to $1,000 for violations. In class action cases, businesses may face damages capped at the lesser of $500,000 or 1% of their net worth. Additionally, the FCCPA provides a 2-year statute of limitations for claims - double the 1-year limit under the FDCPA. These provisions set the groundwork for understanding the specific rules and definitions that govern debt collection in Florida.
The FCCPA explicitly bans various practices that could be considered harassing, deceptive, or unfair. For example:
Additional restrictions include prohibiting communication with debtors between 9 p.m. and 8 a.m. (in the debtor's time zone) unless prior consent is given. If a debtor is represented by an attorney, collectors must communicate only with the attorney - unless the attorney consents to direct contact or fails to respond within 30 days. Furthermore, if a debtor disputes a debt, the collector must report the dispute when sharing information with credit agencies or third parties.
The FCCPA provides clear definitions to ensure uniform application of its rules:
For portfolio managers, these definitions provide a clear framework for legal compliance and strategic decision-making in debt collection practices.
Florida law sets clear boundaries for debt collectors, applying these restrictions not only to third-party agencies but also to original creditors. This broader scope makes Florida’s regulations stand out compared to many other states. Violating these rules can lead to statutory damages of up to $1,000 per violation, with class action penalties capped at the lesser of $500,000 or 1% of the collector's net worth. Below, we’ll break down the key restrictions on contact and prohibited behaviors.
Debt collectors are not allowed to contact consumers between 9 p.m. and 8 a.m. in the debtor's local time zone unless they have prior consent. However, starting July 1, 2025, this restriction will no longer apply to emails, as long as the communications meet all other Florida Consumer Collection Practices Act (FCCPA) requirements. A pivotal ruling in November 2024 by the U.S. District Court for the Southern District of Florida in Nina Quinn-Davis vs. TrueAccord Corp. (Case No. 1:23-cv-23590) clarified that emails sent after hours don’t violate FCCPA or FDCPA rules. The court stated that “communication” only happens when the recipient opens and reads the email, emphasizing that these laws were designed to address disruptive phone calls rather than unopened emails sitting in an inbox.
In addition to timing restrictions, collectors must adhere to other strict contact rules. For instance, they cannot contact a debtor’s employer about the debt unless there’s a final judgment or the debtor provides written consent. Disclosing debt-related information to third parties without a valid business reason is also strictly prohibited.
Florida law explicitly prohibits harassment and abusive tactics in debt collection. Collectors are barred from engaging in excessive communication that could reasonably be seen as harassment toward the debtor or their family. Threatening or using physical force or violence to collect a debt is strictly against the law. Publicly shaming debtors - such as creating "deadbeat lists" or sending materials intended to embarrass them - is also forbidden. Additionally, attempting to collect on debts the collector knows are invalid or falsely asserting legal rights violates the FCCPA.
Florida law establishes clear deadlines for taking legal action on debt, known as statutes of limitations. These limits depend on the type of debt. For example, written contracts like auto loans, personal loans, and mortgages, as well as promissory notes, have a five-year statute of limitations under Florida Statutes §95.11. On the other hand, oral agreements and most credit card debts fall under a four-year limit. Medical bills usually adhere to the five-year rule as well.
Once the statute of limitations expires, the debt becomes "time-barred." This means creditors can no longer sue to collect the debt, though they may still attempt to collect it within the bounds of the law. Additionally, debts can remain on your credit report for up to seven years from the date of your last activity.
"If a debtor is sued on an expired debt and fails to respond or fails to plead this specific defense in their answer, the court may enter a default judgment against them regardless of the debt's age." – Alper Law
It's important to note that any payment or acknowledgment of the debt can reset the statute of limitations. For instance, a $1.00 payment on a four-year-old credit card debt restarts the four-year clock, giving collectors a fresh window to sue. Similarly, signing a written acknowledgment of the debt has the same effect. As Matis Abarbanel, Founding Partner at Loan Lawyers, explains, "The statute of limitations in Florida on debt is five years" - but even a small mistake can restart the timer.
Understanding these time limits is essential for both debtors and collectors. If you’re sued for a time-barred debt, you must raise the statute of limitations as an affirmative defense in your legal response. Failure to do so could result in a valid judgment against you, which may remain enforceable for up to 20 years. Before making payments or signing documents, always verify the debt's age and respond promptly to any legal actions with the appropriate defense.
For creditors and portfolio managers, these timelines are equally important when assessing asset risks and potential legal exposures.
| Debt Type | Statute of Limitations | Legal Basis |
|---|---|---|
| Written Contracts | 5 Years | Florida Statutes §95.11 |
| Promissory Notes | 5 Years | Written agreement |
| Oral Agreements | 4 Years | Verbal contracts |
| Credit Card Debt | 4 Years | Treated as oral/open accounts |
| Medical Bills | 5 Years | Common consumer debt |
| Court Judgments | 20 Years | Enforcing a legal ruling |
In Florida, debt buyers and collectors must adhere to strict legal and operational guidelines. Beyond time limits and restrictions, compliance starts with registering with the state. Under the Florida Consumer Collection Practices Act (FCCPA), any person or entity acting as a consumer collection agency must register with the Office of Financial Regulation (OFR) before conducting business. This applies to both consumer and commercial debts.
Florida categorizes collection agencies into two types: Consumer Collection Agencies (Chapter 559, Part VI) and Commercial Collection Agencies (Chapter 559, Part V). Commercial agencies must secure a $50,000 surety bond and pay a $500 registration fee, while consumer agencies have different fee structures and must complete fingerprinting. Both types are required to renew their registration annually, with commercial agencies renewing between October 1 and December 31.
Certain entities are exempt from registration, including original creditors, Florida Bar attorneys, banks, credit unions, licensed real estate brokers, insurance companies, and out-of-state collectors who limit their activities to interstate communication without soliciting Florida-based debts. However, unregistered collectors who are required to register can face administrative fines of up to $10,000.
Registrations and updates are managed through the OFR's online portal, known as the REAL system. Consumer collection agencies must also complete fingerprinting and disclose a five-year history of any related business operations, as well as any prior license suspensions or criminal convictions involving dishonesty or moral turpitude.
Transparency is key to compliance. The registration process requires detailed disclosures about ownership and management. Applicants must provide full names, social security numbers (or FEINs for corporate owners), and addresses for all owners, officers, and directors. This ensures accountability and helps the OFR monitor who is conducting business in the state.
Commercial collectors have additional requirements. The $50,000 surety bond must be valid for the registration year and is designed to protect creditors from fraudulent or unethical practices. While a Consumer Collection Agency can collect commercial debts, it cannot earn more than 50% of its revenue from commercial claims.
Fingerprinting is mandatory for consumer collection agencies to identify any criminal history that might disqualify individuals from operating in the industry. Starting the fingerprinting process early can help avoid delays.
| Requirement | Consumer Collection Agency (CCA) | Commercial Collection Agency (COM) |
|---|---|---|
| Governing Statute | Chapter 559, Part VI | Chapter 559, Part V |
| Registration Fee | Required (amount varies) | $500 |
| Surety Bond | Not explicitly required | $50,000 |
| Fingerprinting | Required | Not explicitly required |
| Renewal Period | Annual | Oct 1 – Dec 31 |
| Primary Focus | Personal, family, or household debt | Business-to-business (commercial) debt |
Proper documentation is just as critical as registration, as explained below.
Florida law enforces strict recordkeeping standards for registered consumer collection agencies. Agencies must maintain all books, accounts, and records necessary to demonstrate compliance with the FCCPA. These records should be kept at the principal business location listed on the registration unless the OFR approves a different location. All transaction-related documentation must be preserved for at least 3 years after the transaction's completion.
Debt buyers must send written notice of debt assignment at least 30 days before initiating collection actions to ensure debtors are informed. Failing to provide this notice can weaken the legal basis for collection.
When a debtor disputes a debt in writing, agencies must keep a record of the dispute. If requested by the debtor, agencies are required to disclose the details of the dispute within 30 days to anyone who received information about the debt in the prior 90 days. This helps prevent the spread of inaccurate information to credit bureaus or other third parties.
The OFR may request information about consumer complaints, and agencies have 45 days to respond in writing. Missing this deadline can lead to fines of up to $250 per day. Centralizing documentation at the registered address can simplify audits and ensure compliance.
Florida's regulations bring unique challenges and considerations to debt portfolio trading. The Florida Consumer Collection Practices Act (FCCPA) plays a significant role in shaping how debt assets are valued, traded, and managed. For portfolio managers, compliance costs, litigation risks, and registration requirements are critical factors to weigh when dealing with Florida-based debt.
One of the standout aspects of the FCCPA is its broader scope, which increases the liability for debt buyers. Debt that looks profitable on paper can quickly lose value if technical violations lead to lawsuits.
Understanding the legal landscape is essential for accurate debt valuation. As Austin T. Hamilton, Esq. of Jimerson Birr explains:
"The FCCPA is intended to protect consumers and is intentionally unfair to creditors".
Hamilton also highlights the financial burden of defending against lawsuits stemming from minor technical violations. He notes:
"Defending against FCCPA claims often costs more than making a nominal offer to resolve the FCCPA claim".
Key financial risks include statutory damages capped at $1,000 per action (not per violation), while class action lawsuits can result in damages up to the lesser of $500,000 or 1% of the defendant's net worth. For portfolio managers, these figures underscore the importance of ensuring compliance with Florida's strict standards, as even a single portfolio acquisition could expose buyers to substantial liability.
Other factors also influence portfolio value. Registration with the Florida Office of Financial Regulation is mandatory for all parties involved in a portfolio trade. If a party is unregistered, consumers can use that as a legal defense, potentially invalidating the debt. The statute of limitations is another critical element: five years for written contracts and credit cards, and four years for oral agreements. Portfolios containing "zombie debt" - debts beyond these time limits - hold no legal value for collection.
Additionally, Florida law requires a clean chain of title. Under Section 559.715, proper notice of debt assignment is essential. Failure to comply can prevent enforcement entirely. Portfolio managers should carefully audit assignment documents to confirm that the legal right to collect is properly transferred before finalizing any deal.
Incorporating these legal risks and compliance costs into debt valuation is vital. These considerations should directly inform pricing strategies and risk assessments.
Comparing the FCCPA with the federal Fair Debt Collection Practices Act (FDCPA) helps clarify the legal environment for debt portfolio trading. In cases of conflict, the provision that offers greater protection to the consumer takes precedence.
| Feature | Federal FDCPA | Florida FCCPA |
|---|---|---|
| Applies to Original Creditors | Generally No | Yes |
| Registration Required | No federal license | Yes, with the Office of Financial Regulation |
| Statutory Damages | Up to $1,000 | Up to $1,000 per action |
| Class Action Cap | Not specified | Lesser of $500,000 or 1% of net worth |
| Punitive Damages | Not typically available | Available at judge's discretion |
| Statute of Limitations (Consumer to Sue) | Generally 1 year | 2 years from the violation date |
| Communication Hours | Generally 8 a.m. to 9 p.m. | Strictly 8 a.m. to 9 p.m. in the debtor's time zone |
The FCCPA’s two-year statute of limitations for consumer lawsuits extends the liability window compared to federal law. This longer timeframe increases the potential for litigation over older collection activities - something portfolio managers must account for when pricing Florida-based debt.
If you're a debt buyer operating in Florida, staying compliant with state regulations is non-negotiable. Here's a breakdown of the key steps to keep you on the right track and avoid hefty penalties.
Before purchasing any debt portfolio in Florida, make sure to register with the Office of Financial Regulation through the REAL system. Skipping this step could result in fines of up to $10,000. Operating without registration isn't worth the risk.
Notify Debtors Before Collecting
One critical requirement is sending a written notice of assignment to each debtor at least 30 days before starting any collection activities. Keep documented proof of these notices - this is your foundation for compliance.
Validation Letters and Contact Rules
When you first contact a debtor, issue a validation letter and document any disputes for credit bureau reporting. Follow strict contact guidelines:
Documented Procedures and Recordkeeping
Create clear, written procedures to prevent compliance violations. These can serve as your bona fide error defense if unintentional mistakes occur. Additionally, retain all transaction records, receipts, and communication logs for at least three years. Proper documentation is your safety net.
Timely Responses to Regulators
If the Office of Financial Regulation reaches out, respond within 45 days to avoid a daily fine of $250 for non-response. Regular internal audits of your collection practices, assignment documentation, and dispute-handling procedures can help you stay ahead of potential issues and reduce the risk of statutory damages.
Florida's debt collection rules demand close attention to detail. Unlike federal law, the FCCPA applies to both original creditors and third-party collectors, meaning nearly everyone involved in the debt collection process must comply. Registration with the Florida Office of Financial Regulation is also mandatory.
When managing portfolios, the state's statutes of limitations are key: five years for written contracts and four years for oral agreements. Attempting to collect on time-barred debt not only renders it uncollectible but also increases your exposure to legal risks. Communication guidelines are just as strict - contact is limited to between 8 a.m. and 9 p.m. in the debtor's local time zone, and you must stop direct communication immediately if an attorney is involved.
The FCCPA's emphasis on consumer protection means violations can lead to statutory damages of $1,000 per action, along with attorney fees that may exceed the debt's value. For class actions, damages are capped at the lesser of $500,000 or 1% of your net worth. These penalties highlight the importance of strict compliance.
To protect your business, take proactive measures: maintain detailed records, establish clear error-handling procedures, and conduct regular audits. While Florida's debt collection laws may seem complex, adhering to them safeguards your operations and financial health. Stay compliant by registering, respecting time limits, following communication rules, and documenting every step. These practices are essential for preserving asset value and reducing legal risks in debt portfolio trading.
Yes, consumer collection agencies are required to register with Florida’s Office of Financial Regulation (OFR) before conducting any collection activities. This mandate is part of Florida law, ensuring agencies operate within the state’s regulatory framework.
In Florida, even a small payment on a debt might reset the statute of limitations. This happens if the payment is considered an acknowledgment of the debt or a partial repayment. Essentially, such actions can restart the clock, giving creditors the legal ability to sue for a debt that might have otherwise expired. It's always wise to seek legal advice to understand how this applies to your specific circumstances.
If you're sued over a time-barred debt in Florida, it's crucial to respond by using the statute of limitations as an affirmative defense. In Florida, the statute of limitations for most debts is usually five years. Once this period has passed, the law can protect you from being legally forced to pay the debt.
However, if you fail to respond to the lawsuit or neglect to raise this defense, you could face a default judgment, which might allow the creditor to collect despite the expired time limit. Acting quickly and addressing the lawsuit is essential to safeguard your rights.
More than a decade of Ivan's career has been dedicated to Finance, Banking and Digital Solutions. From these three areas, the idea of a fintech solution called Debepxert was born. He started his career in Big Four consulting and continued in the industry, working as a CFO for publicly traded and digital companies. Ivan came into the debt industry in 2019, when company Debexpert started its first operations. Over the past few years the company, following his lead, has become a technological leader in the US, opened its offices in 10 countries and achieved a record level of sales - 700 debt portfolios per year.
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