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Another Dirty Tactic by Debt Collectors: Seeking Compensation from a Power of Attorney

As a creditor harassment attorney, I am rarely shocked by the slimy tactics of Florida debt collectors.  However, this latest tactic takes the cake.

What is a Power of Attorney?

A Power of Attorney is a legal document that gives one person authority over another person’s affairs. The person to whom the authority is granted is referred to as the “agent,” while the person who grants the authority is called the “principal.” The type of authority granted to the agent can vary depending on the type of Power of Attorney issued and the language of the actual document. For example, a Power of Attorney may be issued for just one single act—like giving an agent the power to sell the principal’s home—or it could be a general power of attorney which gives the agent broad powers to perform any legal act on behalf of the principal.

It is important to note that even with a general Power of Attorney there are certain things that an agent may never perform on the principal’s behalf. Regardless of the language of the document, an agent may never sign an affidavit stating that the principal has knowledge of certain facts, vote in a public election on behalf of the principal or take over control of a trust for which the principal was named as trustee.

What Responsibilities does an Agent owe to the Principal and to Third Parties?

The holder of a Power of Attorney (the agent) owes certain duties to the principal. Florida law states that an agent operating under a Power of Attorney owes a “fiduciary duty” to the principal. Generally, this means that the agent has to act in good faith, in the principal’s best interest, and in accordance with the principal’s reasonable expectations.

An agent also owes a duty to third parties. A third party is a person or company- other than the agent or principal- with whom the agent contracts on behalf of the principal. When contracting with a third party on behalf of a principal, an agent has a duty to tell the third party 1) that they are acting as an agent and 2) the identity of the principal. If the agent does not make those two things clear to the third party, then the agent runs the risk of being held personally liable on the contract. Fortunately, avoiding this misunderstanding is very easy; when signing any document on behalf of the principal, be sure to always sign as follows:

Agent’s Name acting as Power of Attorney for Principal’s Name

When someone acting as an agent under a valid power of attorney agreement signs documents using the appropriate language (see above), Florida law will provide certain protections. Speaking generally, an agent operating under a Power of Attorney cannot be held personally liable for responsibilities adopted on behalf of the principal, so long as they fully perform all of their duties. There are very limited circumstances under which an agent may be liable on a principal’s contract.

Creditors and Power of Attorney

Sometimes, creditors may not know or understand the relationship between a principal and an agent, or the laws surrounding that relationship. In these instances, the third party creditor may attempt to collect a debt from the agent that was really incurred by the principal. When this happens, the agent may have an action against the creditor for violating Florida’s Consumer Collection Practices Act.

It is important to understand all of the responsibilities involved in undertaking a Power of Attorney, as well your rights as an agent or a principal. While there are tons of “do-it-yourself” Power of Attorney forms floating around the internet, it is important to speak with a licensed attorney before attempting to execute the document, as the language used in the document is important both to the agent and the principal. At Sibley Dolman Gipe Accident Injury Lawyers, PA, our consumer protection attorneys know the law relating to Powers of Attorney, creditor harassment and consumer protection

If you begin receiving phone calls or letters from a creditor of a principle that you have power of attorney over, contact the consumer debt collection and harassment attorneys at Sibley Dolman Gipe Accident Injury Lawyers, PA. It is important to take action against these misinformed creditors as soon as possible as to avoid any chance of financial liability on your part. There are several steps our experienced consumer protection attorneys can take to see that you are not held responsible for someone else’s debt. For questions relating to Powers of Attorney or harassing third party creditors, contact Sibley Dolman Gipe Accident Injury Lawyers, PA today at 727-451-6900.

By Jacob Pillsbury