In a recent case before the Eleventh Circuit (Oppenheim v. I.C. System, Inc.), the court upheld a jury award of $1,000 in statutory damages and $20,986.21 in attorneys fees and costs against the defendant -- a debt collector hired by PayPal to collect monies owed by plaintiff pursuant to PayPal's contract for services.
Plaintiff used PayPal to process payment for the sale of his laptop to another party over the Internet. After PayPal deposited the payment amount into plaintiff's personal checking account, it was discovered that the payment was fraudulent. Pursuant to the User Agreement between PayPal and plaintiff, plaintiff assumed the risk for any bad payments. PayPal attempted to exercise its contractual right to reverse the transaction. When plaintiff refused to repay the funds, PayPal hired the defendant, I.C. System, Inc., to collect. Later, plaintiff sued I.C. System, Inc. under the Fair Debt Collection Practices Act (FDCPA) and the Florida Consumer Collection Practices Act (FCCPA) for alleged illegal debt collection practices.
As stated by the court:
The FDCPA and FCCPA apply only to payment obligations of a (1) consumer arising out of a (2) transaction in which the money, property, insurance, or services at issue are (3) primarily for personal, family, or household purposes.
I.C. System, Inc. argued that the FDCPA did not apply because (1) the transaction funds at issue were proceeds from a commercial sale in which plaintiff was the seller, (2) the payment obligation did not arise from a "transaction," and (3) the funds were not primarily for personal, family, or household purposes. The court rejected each of these arguments. The court recognized a "transaction" between PayPal and plaintiff and distinguished it from the transaction between plaintiff and the laptop buyer. The court clarified that the former transaction was what was relevant to plaintiff's debt collection claims, stating that the plaintiff was a "consumer" of PayPal's services.
In other words, plaintiff's use of PayPal's services to facilitate a separate sale did not negate his consumer status with respect to PayPal. Additionally, the court identified the sale of the computer as "personal" because the funds were transferred to plaintiff's personal bank account and because plaintiff's PayPal account was registered as a "personal account."
In conclusion, the court affirmed the jury's award in favor of plaintiff as to both the FDCPA and the FCCPA claims, per Florida's deference to federal court interpretations under the FDCPA (See Fla. Stat. Sec. 559.77(5)).