When collecting overdue consumer debt, collection agencies must adhere to federal law. The Fair Debt Collection Practices Act was established in 1977 to protect consumers from abusive debt collection practices. Should a debt collector violate federal collection regulations, the agency employing the collector may face legal repercussions if the debtor opts to sue.
Why Abusive Debt Collection Practices Occur
Many collection agencies grant their debt collection agents commission for successfully recovering old debts. For example, a debt collector who convinces a debtor to repay a $100 debt may receive $10 in commission. The prospect of collecting commission on high debts is sometimes enough to push a collector to use illegal collection tactics to coerce a debtor to pay.
Other collection companies impose monthly quotas on their staff. This puts a debt collector under pressure to meet his quota each month in order to gain good reviews and retain his job. The pressure of a looming quota can cause a debt collector to violate the FDCPA.
Perhaps the most common reason for FDCPA violations is the fact that some debt collectors are not thoroughly versed in what methods are and are not permissible and thus these representatives violate the law out of simple ignorance of the guidelines.
See: Collection Agency Dispute Letters
FDCPA Lawsuits From Consumers
A consumer can initiate a civil lawsuit over any FDCPA violations. The following violations are the most common:
- Persistent and collection calls that occur within moments of one another.
- Debt collectors calling the individual’s place of employment after being informed by the debtor that this is inconvenient.
- A debt collector discussing the individual’s debt with a friend, family member or co-worker
- A debt collector threatened to physically harm the debtor or his family
- A debt collector used violent or vulgar language toward the debtor
See: Debt Collector Harassment
Getting Proof of Debt Collection Violations
Proof isn’t required before an individual files a lawsuit against a collection agency, but it helps the consumer win his case. Proof of debt collection violations is easiest to obtain if a collection agency commits violations in writing. Unfortunately, the vast majority of violations occur over the phone and not all states allow consumers to tape telephone conversations without the other party’s consent. The following states prohibit taping telephone calls without the express consent of both parties:
- California
- Connecticut
- Florida
- Illinois
- Maryland
- Massachusetts
- Michigan
- Montana
- Nevada
- New Hampshire
- Pennsylvania
- Washington
Leaving a message on an answering machine is voluntary and by doing so, a debt collector grants his or her permission to have the message taped. State laws vary, however, regarding the admissibility of answering machine messages in civil cases.
See: Stop Telephone Calls From Collection Agencies
Filing a Lawsuit Against a Collection Agency
Before a consumer can win an FDCPA lawsuit against a collection agency, he must ensure that he files his lawsuit within one year of the time the violations occurred. Illegal collection activities outside of the one year federal statute of limitations are no longer considered valid legal grounds for a lawsuit.
Winning a Civil Lawsuit for Collection Violations
The FDCPA allows consumers filing an FDCPA lawsuit to sue a collection agency for court costs, actual damages and additional damages up to $1000. Actual damages occur in situations where a debt collector’s behavior causes the debtor financial loss. A good example of this scenario would be if a collection agency representative continually called an individual at his place of employment even after being asked to stop. If the individual subsequently lost his job due to the high volume of personal calls his received from debt collectors, he could request actual damages in the amount of his lost wages.
In general, a lawsuit is a good idea for individuals who have proof that they are either being unduly harassed by debt collectors or are being pursued by a collection agency for a debt they do not owe. Collection agencies are expected to adhere to federal debt collection laws. By suing a collection agency for violating the law, a debtor is not only defending himself, but also reminding the company to take the law seriously--and perhaps sparing another consumer the same harassment.
Sources:
The Federal Trade Commission: The Fair Debt Collection Practices Act
Candice Edwards - Candice Gillingwater is a credit specialist and consumer advocate currently living in Georgia. Her goal is to educate the public about ...
