Federal Fair Debt Collection Practices Act (FDCPA)
After a deluge of bankruptcy filings in 1978, the Legislature reviewed and searched for the common root of the issues. After finding a number of abusive, deceptive, and unfair debt collection practices, and the correlation this had on the number of personal bankruptcies, marital instability, the loss of jobs, and to invasions of individual privacy, the Fair Debt Collection Practices Act (FDCPA) was enacted by the Federal Government to protect consumers from harassment stemming from allegedly unpaid debts. A consumer under this act is “any natural person obligated or allegedly obligated to pay any debt.” This act allows consumers to sue in the event they have been harassed or deceived by debt collectors.
Who is impacted by the FDCPA
Consumer Debtors: The FDCPA applies to personal, family, or household debts, including those affected by mortgages, credit cards accounts (commonly “accounts stated”), auto loans, medical care, retail financing, and other debts established by consumers. The FDCPA does not apply to business debtors or their respective debts.
Third Party Debt Collectors: Entities or individuals attempting to collect debts on behalf of another company (credit collection companies) are bound by the regulations.
Creditors Collecting Their Own Debt (original creditors): Creditors attempting to collect debt owed to them, on their own behalf, are not subject to the FDCPA regulations. However, under Florida law, the Florida Consumer Collection Practices Act (FCCPA) may apply to them.
FDCPA General Provisions
Acquisition of Location of Debtor: In order to locate an alleged debtor with information from a third-party, a debt collector under the FDCPA must identify themselves, state that they are confirming or correcting location information and, only if expressly requested, identify their employer. They must not state that such consumer owes any debt, not communicate with any person more than once, unless requested to do so by that person or they belief the information given is erroneous and there is additional information. They cannot communicate by post card or use any langue or symbol that indicates they are in the debt collection business, and after being told an attorney represents the debtor, not communicate with the alleged debtor. Outside of trying to establish location or having permission from the debtor, and subject to some exceptions, a debt collector is barred under the FDCPA from talking to a third party concerning the debt.
Communication with the Consumer: Without consent from the consumer or authority from a judge, a debt collector cannot communicate with a consumer in connection with the collection of any debt at any unusual time or place or a time or place known to be inconvenient to the consumer. Unless there is evidence otherwise, debt collectors are to assume the convent time to be after 8 AM but before 9PM in the debtors current location. If the debt collector is known to be represented by counsel with respect to the debt and has knowledge or can find out who that attorney is, the debt collector must communicate with the attorney unless that attorney does not respond or the attorney consents to direct communication. The debt collector should not call your work if the debt collector knows your employer prohibits that communication.
Under the Fair Debt Collection Practices Act, if the debtor or their attorney notifies a debt collector in writing that they are refusing to pay the debt, and that they no longer want to have further communications with the debt collector, the collector is prohibited from further contact with the debtor. Communication is only permissible if the contact is intended to advise the debtor that collection efforts are being terminated, or to notify the debtor that special remedies will or may be invoked by the collector or creditor.
Consumer Disrespect: Under the Fair Debt Collection Practices Act, debt collectors may not harass, oppress, or abuse any individual connected to the collection of a debt. These behaviors can include:
- use or threaten the use of violence or other criminal means to harm the physical person, reputation, or property of any person.
- use obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.
- publish a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons
- advertise, for sale, any debt to coerce payment of the debt.
- cause a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.
- the placement of telephone calls without meaningful disclosure of the caller’s identity.
Misrepresentation and Unfair Practices: Pursuant to the Fair Debt Collection Practices Act, a debt collector may not:
- Falsely represent the character, status, or amount of the debt;
- Claim to be or imply he is a government official;
- Claim to be an attorney;
- Imply or state that the failure to pay the debt will result in the debtor’s arrest and/or confiscation of their property;
- Threaten impermissible legal action;
- Threaten legal action that is not intended;
- Communicate false information about the debtor’s credit;
- Use deceptive means to collect or attempt to collect the debt;
- Fail to disclose interaction(s) with the debtor;
- Imply they are employed by a consumer reporting agency; or
- Imply that collection documents are not of a legal nature.
- Additionally, a debt collector may not use unfair or unconscionable means to:
- Collect any interest, fees, charges, or expenses incidental to the initial debt unless authorized by the original contract;
- Accept a check postdated by more than 5 days unless the debtor is notified, in writing, the collector will deposit the check within 3-10 days;
- Threaten to deposit postdated checks; or
- Cause unnecessary charges for communications by concealment of the true purpose of the communication, including collect telephone call and telegram fees.
Validation: Pursuant to the Fair Debt Collection Practices Act, within five days after initial contact with the debtor, the collector must send a written statement highlighting the amount of debt owed, name of the lender, and payment due date.
What can a consumer recover for violations of this Federal law?
Statutory Damages: Under the Fair Debt Collection Practices Act, debt collectors that violate this law’s provisions will be liable to the consumer for up to $1,000 in damages. The amount awarded will be based on the nature of the harassment and what can be proven in court. In contrast, under the Telephonic Communications Protection Act (TCPA), consumers receiving robo-calls on their cell phones may be awarded up to $1,500 per phone call.
Actual Damages: Additional damage compensation may include out-of-pocket costs or compensation for emotional distress and damage such as stress related injuries, which may include:
- Chest constrictions
- Loss of appetite
- Pain and suffering
Attorney Fees: If your suit prevails, the FDCPA permits the recovery of attorneys’ fees.
Statute of Limitations: Under the Fair Debt Collection Practices Act, an action to enforce any liability created by the act may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within one year from the violation.
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