Consumers and debt collectors are the primary parties considered in the Fair Debt Collection Practice Act (FDCPA), (the Act), written to protect consumers from unfair business practices by third party debt collectors. The FDCPA protects consumers of goods in the marketplace for personal consumer use, where a debt is due, and a debt collector attempts to collect the amount due. The FDCPA only applies to the actions of debt collectors who are third parties with right to collect the debts of another. The FDCPA does not apply to original creditors collecting debts originally owed to them. Third parties, usually credit references, are referred to by the Act and there are limitations to how a debt collector can make contact with a third party of the debtor, when attempting to collect a debt.
There are three main legislative objectives of the FDCPA:
- Stopping, preventing and remedying unfair consumer debt collection practices;
- Protecting legitimate and rule abiding debt collectors from competitors with unfair debt collection practices; and
- Establishing a congressionally enacted uniform body of law controlling the legal collection of consumer debts with statutory standard practices.
There FDCPA contains multiple requirements debt collectors must follow exactly or be in violation of the Act, triggering remedial penalties.
Violations of the FDCPA include several prohibited actions that are abusive or harassing, false and/or deceptive, and unfair and unconscionable acts. These violations of these congressional prohibitions can lead to financial and marital instability, bankruptcies, loss of work and invasions of individual privacy. When a debt collector breaks one of the following consumer debt collection rules, they are subject to the legal penalties and fines and attorneys fees when a lawsuit is filed in the local federal court within one year of the date of violation.
Abusive or Harassing Acts by a debt collector, Violating the FDCPA are generally prohibited.[i] Acts or threats of violence or criminal activity violate the Act. Using obscene, profane or racially motivated language is a violation of the Act. Publishing or advertising a list of bad debtors, or threatening to put a consumer debtor on such a list is an Act violation. Debt collectors making excessive telephone calls to a debtor, or third party, or making their phone ring repeatedly to harass them are violators of the Act. A violation of the Act also occurs if the debt collector makes phone calls to the consumer debtor and fails to make meaningful disclosures of their identity.
False and/or Deceptive Acts by a debt collector, Violating the FDCPA are generally prohibited.[ii] If a debt collector falsely represents himself or herself as a lawyer, there is a violation of the Act. Debt collectors are prohibited from threatening criminal prosecution for nonpayment, or they violate the Act. Debt collectors also may not threaten lawsuits, garnishments or property seizures if they have no real legal ability to do so, for example, when the debt is old and past the statute of limitations to collect on the debt, and if the debt collectors do make those threats, there is an Act violation. Threatening to report false credit information is also prohibited and a debt collector violates the Act in making that credit reporting theft.
Unfair and Unconscionable Acts by a debt collector, Violating the FDCPA are generally prohibited.[iii] Debt collectors may not collect any monies from consumer debtors except for the amounts authorized by law, and extra fees and charges for payments of full or partial amounts cannot be charged to the consumer debtor or there is a violation of the Act. Post-dated checks also have special rules if they are accepted by debt collectors. First, is a debt collector agrees to accept a post-dated check, they must give the consumer debtor a minimum of three days written notice before endorsing and depositing the check for collection. Second, a debt collector may not ask for or accept a post-dated check under the debt collectors’ threat of criminal prosecution.
In addition to several bad debt collector acts that lead to Act violations there are FDCPA regulations and duties to comply with the rules for communication among debt collectors and consumer debtors.
The FDCPA regulates how a debt collector must communicate with a consumer owing a debt. The original communication in which the debt collector makes contact, they must specifically speak or state the language: “This communication is from a debt collector in an attempt to collect a debt. Any information obtained will be used for that purpose.” All subsequent communications must include a spoken or written statement, “This communication is from a debt collector,” or “This is an attempt to collect a debt.” [iv] In addition, there are five-day notice requirements a debt collector must satisfy to legally inform a consumer debtor of the nature of details of the debt they seek to collect.
Enforcement of the FDCPA rights and remedies for consumers involves damages, fines and the compensation for actual and statutory attorney fees where applicable.
Within one year of an act by a debt collector in violation of the Act, the consumer debtor, or third party receiving an abusive amount of phone calls, for example may file a lawsuit against the debt collector in a federal district court.
The remedies for violations of the Act include the following:
- A court’s award of actual damages suffered by the consumer debtor;
- Statutory damages allowed by the Act, up to $1,000; and
- Actual amounts of attorneys fees incurred and/or allowed by the Act.
In some cases, a violation of the FDCPA can be used as leverage in settlement efforts where debt collector may agree to accept less money than originally sought if the consumer debtor agrees to not file a lawsuit for violations of the Act.
The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs harmed by debt collectors violating the FDCPA and other similar federal and state laws. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the collection companies who refuse to follow the law and use illegal tactics to force consumers to pay the debts they are hired to collect. To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our Facebook page. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.
[i] 15 USC § 1692d
[ii] 15 USC § 1692e
[iii] 15 USC § 1692f
[iv] 15 USC § 1692e(11)