Section 811: Why Your Venue Provision Could Cost You When Pursuing a Retail Collection Suit

Alexander E. George
ageorge@kmksc.com
(414) 962-5110

The process of third-party collection of retail/consumer debt is a highly regulated activity under U.S. federal law (and increasingly state statute) and remains primarily governed by the Fair Debt Collection Practices Act (FDCPA). Enacted in 1977, the Fair Debt Collection Practices Act was designed to eliminate abusive, deceptive, and unfair debt collection practices while promoting consistent action to protect consumers. Among its many provisions, Section 811, commonly referred to as the “venue provision,” remains a potentially overlooked, yet crucial provision of the FDCPA that any debt collector, and creditor who retains a debt collector for assistance in collecting retail/consumer debts, needs to be keenly familiar with. Despite its straightforward language, failure to comply with this section has led to numerous lawsuits and costly penalties for debt collectors and the underlying creditors.

What is Section 811 of the FDCPA?

Section 811 (15 U.S.C. § 1692i) dictates where a debt collector may legally file a lawsuit against a consumer for debts such as unpaid credit card balances, medical bills, or personal loans. The statute provides that:

Any debt collector who brings any legal action on a debt against any consumer shall —

(1) in the case of an action to enforce an interest in real property securing the consumer’s obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or

(2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity —

(A) in which such consumer signed the contract sued upon; or
(B) in which such consumer resides at the commencement of the action.

The stated purpose of this provision is to protect consumers from being sued in a distant or inconvenient jurisdiction. From a practical standpoint for those looking to collect retail claims though, Section 811 serves to effectively negate any venue provision that may have been included in the original credit or lending agreement. Even if the debtor consented to venue for legal proceedings in a specific jurisdiction, Section 811 establishes clear guidelines for where suit must be brought and does not allow for a carve out for any pre-existing venue agreements.

Why Section 811 Matters

1. Protection Against “Forum Abuse”

When enacting Section 811, Congress suggested the venue provision was necessary to stem the filing of lawsuits by debt collectors in jurisdictions far removed from the debtor’s residence, banking on the likelihood that the consumer wouldn’t or couldn’t travel to court to defend themselves. This often resulted in coerced settlements or default judgments against the debtor. Section 811 was Congress’s direct response to such practices, establishing a consumer’s right to defend themselves in a local and accessible forum.

2. Legal and Financial Ramifications for Non-Compliance

Section 811 is not just a procedural nicety; violation of the provision carries real potential legal consequences. Debt collectors who violate this provision can be sued by the consumer for statutory damages (up to $1,000 per action), actual damages, and attorney’s fees. Courts have consistently upheld that venue violations are actionable under the FDCPA even if the debtor suffers no quantifiable financial harm.

In Suesz v. Med-1 Solutions, LLC, the Seventh Circuit notably expanded the scope of “judicial district” to include small claims courts, reinforcing that collectors must sue in the smallest possible geographical unit with jurisdiction. The court emphasized that the goal of Section 811 was to prevent any unfair strategic advantage by debt collectors through venue manipulation.

3. A Strict Liability Framework

Section 811 is enforced under a strict liability standard. This means that intent or lack of knowledge is not a defense. If the collector files in the wrong venue, the court can find them in violation. As a result, compliance systems and due diligence procedures must be robust. Even well-meaning debt collectors who rely on outdated or incomplete address records may find themselves liable.

Litigation Trends and Risk Management

Consumer litigation under the FDCPA remains high, with venue provision violations representing a recurring theme. The low bar for filing an action for violating the venue rules, coupled with the availability of statutory damages and attorney’s fees, makes FDCPA lawsuits particularly attractive to consumer rights attorneys. Moreover, federal courts have shown little tolerance for venue violations, even when collectors argue inadvertent error or administrative oversight.

Debt buyers, in particular, are frequently targets of these lawsuits, especially when attempting mass litigation involving hundreds or thousands of debt accounts. Failure to verify addresses or misunderstandings about jurisdictional lines can multiply legal exposure exponentially.

Companies that contract third-party attorneys to file suit must also ensure those firms are fully aware of the requirements in Section 811 and are operating in compliance. A violation by a legal representative may still be imputed to the debt collector, and the original creditor, under the FDCPA’s vicarious liability principles.

Conclusion

The venue provision in Section 811 of the FDCPA is a seemingly simple, yet highly important (and likely underappreciated) part of the act. Though this provision purports to ensure that consumers are afforded the right to defend themselves in a “local” court, in reality the strict compliance of the provision has created a high-stakes compliance mandate with significant legal and financial implications for debt collectors.

In an era of increasing regulatory scrutiny and consumer awareness, there is no room for error in venue selection. By working with counsel that understands, appreciates, and has procedures in place to ensure compliance with the FDCPA, creditors can be sure they are avoiding costly missteps and uphold the fairness and integrity the FDCPA was designed to protect.

If you would like to learn more about the effective collection of your retail or commercial claim, please contact KMK Attorney Alexander George at ageorge@kmksc.com or (414) 961-4826.