Basics of the Fair Debt Collection Practices Act
The National Law Review reports the Consumer Finance Protection Bureau, CFPB, issued a final rule for the Fair Debt Collection Practices Act (FDCPA) in December 2020. Finally, after seven years of deliberation, new safe harbor provisions begin on November 30, 2021, for debt collector harassment.
Whether you’ve dealt with collection agencies recently, or for years, trying to know about all of the debt collection laws and how to navigate them can feel like trying to hit a moving target. If you don’t know the basics of the legislation or the latest developments, you may not know if a collection agent broke the rules.
Understanding FDCPA violations and their definitions can not only protect your rights but your wallet as well. Overreaching behaviors can give you the right to hire a lawyer and file a civil lawsuit that ends the harassing behavior for good. If you suspect that you have a case, knowing the conditions expressed in the law, and the basics of the fair debt collection practices act can help you decide if this is the right path for you and your family.
Limits on Behavior
Nobody enjoys dealing with debt collection agencies, but to be fair, they haven’t done themselves any favors either. In fact, third-party collectors have gained a reputation for taking an “any means necessary” approach toward their efforts, often committing Illegal Debt Collection Practices. In response to this history, the FDCPA established limitations for how debt collectors can conduct their business.
Additionally, constant fake collection scams continue to target people around the world. The problem has become so pronounced that recently the AARP reported that the FTC received an average of 145 complaints per day in 2020. It may not surprise you to know that illegitimate efforts by con artists often break FDCPA rules. Especially as agencies grow more profitable, they become more aggressive. A legitimate firm typically trains its staff not to engage in the following types of behaviors:
- Using profanity
- Repetitive calls
- Threatening violence
- Calling before 8 am or after 9 pm
- Telling you that you will get arrested
- Contacting you at your place of employment
Out of these possibilities, the threat of being arrested stands out as a concern. Can you go to jail for debt, or is that an empty threat by desperate collectors? The short answer is that it is possible, but only when legal action occurs for violations of contract law. Adjacent circumstances like not appearing for a summons could cause this to happen as well, but actual threats should not come from the average representative of a collection agency. Its best to protect yourself by learning the basics of the fair debt collection practices act.
Validation and Disputed Debts
After taking charge of collecting a debt, collectors have to send a notice within 5 days of the acquisition. This letter should contain:
- Amount of the debt
- Name of the creditor
- Notification that the debtor has 30 days to dispute
- A statement that failing to dispute within 30 days is an assumption of responsibility
- A written notice that the consumer can receive the name and address of the claimant
Most of the FDCPA regulations apply to third-party debt collectors, but it also has plenty to say about the general behavior of debtors. Hence why it is important to know the basics of the fair debt collection practices act. As an example, failing to dispute a debt within 30 days of receiving a written notice constitutes an admission of liability under the law.
Still, when considering the long-term consequences to an individual’s credit history and finances, debt collection agencies should have strict expectations. Failure to follow government directives can create liabilities for:
- Actual damages sustained
- Additional damages at the discretion of the court
- Cost of court and legal fees
- Awards not to exceed $500,000 or 1 per centum of the net worth of the company for class action lawsuits
Factors a Court Can Consider
The FDCPA provides the judicial system with standards for evidence and the burden of proof for debt collector harassment. By now you know some basics of the fair debt collection practices act. So, What Should You Expect When Suing for Debt Collection Harassment? The strength of your case can depend on the frequency and persistence of the lawbreaking, as well as how much you can prove it was intentional. Class action lawsuits also take the number of people affected and the resources of the debt collector into consideration. The elements of this type of case fall into 3 categories: intent, jurisdiction, and advisory opinions.
First, an agency should prove within a preponderance of the evidence that their actions were not intentional. They must demonstrate that it was a bona fide error and a deviation from their company policies also.
A lawsuit based on an FDCPA violation must go to a court with the appropriate jurisdiction. Regardless of any local controversies, a judge should take up the case within 1 year of the date of the violation.
Finally, previously amended opinions, revisions, or omissions affect your case. If a judicial body has not invalidated your claims, the court responsible for your case can advance your lawsuit through the system.
The FDCPA gives the Federal Trade Commission authority to enforce the law and establish rules for fair practices. You can report fraudulent activities directly to this federal agency through its website.
The FTC’s mission is to stop deceptive or unfair practices in your community. To accomplish this task, they also can take action under the Federal Deposit Insurance Act or Federal Credit Union Act. No matter what deceptive, abusive, or harassing behavior you’ve experienced from a debt collector, they may have a legal mechanism to lean on. Learning the basics of the fair debt collection practices act can help you and the FTC stay ahead of debt collectors.
Do You Believe a Debt Collector Broke FDCPA Law?
If you have recognized abusive or negligent behavior that a debt collector participated in recently, you might want to take legal action. The FDCPA exists to protect yourself and your family from harassment or illegal collection efforts.