What You Need to Know about NJ Ethics Opinion on Debt-Collection Letters

After reading the NARCA special bulletin, “New Jersey Ethics Opinion Deems Sending Collection Letters as the Practice of Law,” and knowing that we receive multiple requests for NJ referrals from law firms outside the state, I called one of my attorney friends in NJ to find out how this recent opinion will impact National List law firm members.

He informed me that the NJ Creditor Bar Association will be meeting June 13 to discuss; however, he has advised his out-of-state lawyer friends to refrain from sending law-firm demand (debt collection) letters to consumers in NJ, if they are not a licensed NJ attorney.

The ethics opinion states that any collection letter coming from a lawyer is considered to be the practice of law. Therefore, you must be licensed to practice law in the state of NJ in order to send a law-firm-originated demand-for-payment letter to a NJ consumer.

I asked if law firms outside NJ could call on consumers in the state of NJ for payments, and he said that a law firm calling on a consumer would likely also be considered to be practicing law, because a demand letter would either need to be sent originally or delivered upon contact, which would require a NJ attorney. Thus, he would advise against a law firm calling or dunning consumers in NJ without utilizing a lawyer licensed to practice in NJ.

I thought that was good advice, so I wanted to share it with our readers. If you have any questions or comments regarding this ruling, let me know!

by Beverly Unrath, NL Director of Business Development

Categories: Business Relationships, National List

Tags: , , ,

3 replies

  1. Da…Da Da…!!! Would I want NJ lawyers to be sending collection letters or making calls into Missouri…Better not find out they are or any other state licensed attorneys are coming into my state to collect. If they can do this, then why would we have to become licensed in any state!!! The sending of a collection or a follow up phone call is for the purpose of collecting on a contract…A contract
    is a legal document & a legal event…Only collection agencies & attorneys licensed in the state should b
    e allowed to collect in that state.
    In my opinion, every state is a closed state when it comes to attorneys trying to enforce a contract, this includes collecting it, in states wherein they are not licensed.
    Make you all a deal…Stay out of Mo.; I will stay out of the states I am not licensed in…

  2. I respectfully disagree. The crux of the NJ Ethics opinion dealt with attorneys acting within the RPC and that the failure of an atty to use their professional judgment in sending a collection is not an FDCPA violation but an ethics action. The opinion did not say out of state attorneys, not licensed in New Jersey, cannot send letters into New Jersey.

    NJ RPC 5.5 deals with the requirements of the practice of law within NJ by attorneys who are licensed in other jurisdictions. The sending of a letter from an out-of-state attorney into New Jersey would be complaint with RPC 5.5(b)(3)(i) and (v). Also see Cohen v. Wolpoff, 2008 U.S. Dist LEXIS 77052 for a good analysis of out-of-state attorneys who send letters into New Jersey.

    In my opinion, the ethics opinion is a step in the right direction. Collection attorneys are attorneys and the sending of a letter is attorney conduct and not a basis to bring and FDCPA action for attorney who was doing nothing more than representing their clients.

    • I never said it was a FDCPA violation…I believe it is an ethical issue, too. I hope Mo. does not allow out of state attorneys to practice in Mo. without a license. I have not reviewed our Ethical rules, but, I
      will report any out of state attorney who I discover.
      Secondly, why do all the consumer attorneys in other states who pick up clients off the internet have in state attorneys listed on their letterhead?
      I believe for the reason I have raised.

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