The Fair Debt Collections Act (FDCPA) was first enacted to protect debtors from the increasingly common problem of harassment by debt collectors. The FDCPA arose out of federal consumer protection laws, and was first enacted in 1978. The law essentially serves to level the playing field between consumers and debt collectors; requiring debt collectors to be more accountable for their actions. It was initially introduced in response to abusive tactics by debt collectors trying to collect on overdue debts. The FDCPA seeks to protect debtors by prohibiting debt collectors from using certain abusive collection practices. It further serves to deter debt collectors from engaging in abusive practices by exposing them to liability should they violate the FDCPA. Therefore, if a debt collector violates a provision of the FDCPA, the debtor is granted the ability to sue the debt collector for damages. Depending on the violation, the amount of damages that can be recovered by a debtor can be quite high.
If you believe you may have been a victim of FDCPA violations, there are four elements that must be investigated in order to establish an actionable violation. First, you must be a consumer. Under the FDCPA, a consumer is a natural person who is obligated to pay a debt. The FDCPA provides protection for consumers alone. This means that a business entity, for example, cannot claim an FDCPA violation since they are not considered a consumer. Additionally, the consumer usually must be the primary debtor (i.e., the individual responsible for paying the debt). That being said, people such as spouses of debtors, lawyers of debtors, and collection personnel of debtors have been considered to be consumers by courts under the FDCPA, and may be able to sue a debt collector for FDCPA violations.
In addition to the consumers listed above, the FDCPA permits third parties to bring lawsuits for FDCPA violations in certain situations. For example, if a debt collector calls the household of a debtor, but discusses the collection of the debt with the debtor’s daughter instead of the primary debtor, the daughter may be able to sue the debt collector for violations of the FDCPA even though she is not the primary debtor. This will strongly depend on the alleged abuse, and will require a careful legal analysis.
The second question is whether the debt is a consumer debt. This element is most at issue when small business owners mix their personal and business debt. Courts have decided that a “mixed” debt is a “consumer” debt when it is at least 50.01% personal debt, and no more than 49.99% business debt. If, however, the first question of whether you are a consumer has essentially been satisfied, the second question will also likely be satisfied. Therefore, in reiteration of the language found within the FDCPA, the consumer must be a natural person who is obligated or allegedly obligated to pay any debt.
The third question is whether you are dealing with a debt collector. The FDCPA states that a debt collector is, in general, a person who is in the business of collecting debts on behalf of a party to which a debt is owed. This essentially means that a debt collector will not be the actual creditor, but will be a third party who has been hired by the creditor to collect the debt. When original creditors try to collect on their debt, the FDCPA does not apply to them. The FDCPA applies only to third party debt collectors. Other parties, such as process servers and repo agents, are exempt from the provisions of the FDCPA. However, if a repo agent “breaches the peace” while attempting to execute a repossession, the FDCPA will take effect.
The final question is whether a violation of the FDCPA has actually taken place. While there are numerous provisions a debt collector must abide by, there are some common areas that debt collectors commonly forget. For example, if a debtor has hired an attorney to represent them in their financial situation, debt collectors are prohibited from calling the individual debtor. They must contact the debtor’s legal counsel instead. This is true even after legal representation has concluded. Therefore, if a debt collector calls a debtor after they have filed for bankruptcy, the debt collector has violated the FDCPA and is liable for damages. Other violations include excessive phone calls that result in hangups, failing to identify oneself as a debt collector, telling the debtor they will be arrested if they do not pay, using misleading documents to attempt to collect (e.g., “this is not an attempt to collect a debt”), failing to give a 30-day notice prior to collection, and more.
If you think you are the victim of abusive debt collection practices, it is important to do everything you can to document the alleged abuse. This can include retaining documents of correspondence, recording phone calls, and carefully documenting each and every instance of communication with a debt collector chronologically. Being able to demonstrate alleged violations of the FDCPA will result in a much more favorable outcome. You should also consult with an attorney who specializes in debt collection practices to ensure that you understand your rights under the FDCPA.