Announcements

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Debt collection is governed by The Fair Debt Collection Practices Act (FDCPA), a federal statute that was enacted in response to consumer complaints about abusive practices. The Act, a strict liability statute, is designed to police the collection industry. It includes a provision that allows debtors to hire a private attorney to represent them. The debt buyer pays the attorney fees if the debt buyer is found to have violated the statute. Many states have adopted similar laws, and debt collectors also may be liable under torts other than the state and federal collection statutes.

Debt buyers

Today, debt buyers dominate the debt collection industry whose companies purchase consumer debt at low rates and then attempt to collect that debt. Often debts are re-sold to other debt buyers if the current buyer cannot collect. However, consumer advocates charge that some debt buyers use unscrupulous, and illegal, practices such as telephone harassment and filing lawsuits on old credit card debt. As a result, complaints about debt collection practices are at an all-time high.

Debtors’ rights

According to the FDCPA and many state statutes, debt collectors are required to be truthful and to treat debtors with fairness, dignity, and respect. Consumer debtors can file a lawsuit against a debt collector when these laws are violated. If the suit is successful, the debt may be waived and the debtor may recover $1,000 per case, have attorneys’ fees paid, and possibly receive payment for emotional and punitive damages.

How to know if you have a case?

You may have a case against a debt collector if you have been:

• Sued for an old credit card debt or old account where there has been no collection activity for years. Statutes of limitations vary by state.

• If you have been sued for an amount greater than the original debt due to added interest, penalties, or attorneys’ fees.

• If you have been harassed by a debt collector, which includes telephone harassment at home or at work, having a debt collector contact neighbors or coworkers, receiving threats, and being subjected to illegal debt collection tactics such as offensive language, threats to have you arrested or your car impounded and wages garnished.

• If a debt collector calls your cell phone without your permission. (Under some statutes that action costs $5,000 per violation, according to a recent ruling in Northern California Federal Court.)

• If you are wrongfully sued for a debt that is not yours or for one that you have already paid.

How to know if you don’t have a case?

The FDCPA does not apply to in-house collection departments. If, for example you owe a debt to Sears and a representative from the company’s in-house collection department contacts you that action would not be covered under the Act. However, some state laws may regulate the conduct of in-house collection departments.

If Sears turns your debt over to an independent collection agency or sells the debt, then the conduct of the third party debt collectors is covered under the Act.

Because a debtor may, or may not, have a case against a debt collector, depending on the circumstances, you should consult an experienced attorney to help you determine whether a case exists. To contact a qualified attorney to discuss your situation, click here. Consultations are free, without obligation, and are strictly confidential.

You may also want to copy and paste the following URLs into your browser for more information on The Fair Debt Collection Practices Act (FDCPA) and on Debt Collection Laws.