The Fair Debt Collection Practices Act or FDCPA

The Fair Debt Collection Practices Act is a Consumer Protection amendment, approved on September 20, 1977, which establishes legal protection for consumers from abusive debt collection practices.  It also protects reputable debt collectors from unfair competition and encourages consistent state action to protect consumers from abuses in debt collection.

How does the FDCPA protect consumers?

• FDCPA prohibits debt collectors from using deceptive or unfair tactics.
• Regulates what time of day debt collectors can contact you.
• It requires collectors to honor your request not to contact you at specific times or places.
• The FDCPA only applies to third party debt collectors.

Click here for more information on “Prohibited Conduct” for Debt Collectors.
Prohibited Conduct Rules
Click here for more information on “Required Conduct” for Debt Collectors.
Required Conduct Rules

What regulatory Agencies enforce the FDCPA?
Traditionally the Federal Trade Commission (FTC) has the administrative authority to enforce the FDCPA under the Federal Trade Commission Act. The recent down-turn(the Great Recession) in our economy forced the government to re- evaluate their approach. A new consumer Financial Protection Agency known as the Consumer Financial Protection Bureau, or CFPB, was created in 2010.

More often than not aggrieved consumers may choose to file a private lawsuit in a state or federal court to collect damages (actual, statutory, attorney’s fees, and court costs) from third-party debt collectors. The FDCPA is in fact a strict liability law, which means that a consumer need not prove actual damages in order to claim statutory damages of up to $1,000 plus reasonable attorney fees if a debt collector is proven to have violated the FDCPA. However, the collector may escape penalty if it shows that the violation was unintentional and the result of a “bona fide error” that occurred despite procedures specifically designed to avoid the error in question.
Alternatively, if the court determines that the consumer filed the case in bad faith and for the purposes of harassment, causing the consumer to lose the lawsuit, the court may then award attorney’s fees to the debt collector.

** A common criticism of the FDCPA is that the maximum statutory damages of $1000 contained in the original law which was passed in 1977 has failed to rise with inflation. $1000 in 1977 is equivalent to $3892 in today’s economy.

What does it mean to “cure” a breach of the FDCPA?
Bear in mind that the debt collector might avoid any liability if it is possible for him or her to cure the violation. The debt collector has to do so within fifteen days of discovering that his or her breach of the CFDCPA can be cured. If you have actual damages, such as emotional damages, however, it is unlikely that the debt collector can cure the breach.

Required Conduct – FDCPA – 15 U.S. Code § 1692 et seq.

Required:
The Act requires debt collectors to do the following (among other requirements):
• Identify themselves and notify the consumer, in every communication, that the communication is from a debt collector, and in the initial communication that any information obtained will be used to effect collection of the debt
• Give the name and address of the original creditor (company to which the debt was originally payable) upon the consumer’s written request made within 30 days of receipt of the §1692g notice;
• Notify the consumer of their right to dispute the debt (Section 809), in part or in full, with the debt collector. The 30-day “§1692g” notice is required to be sent by debt collectors within five days of the initial communication with the consumer, though in 2006 the definition of “initial communication” was amended to exclude “a formal pleading in a civil action” for purposes of triggering the §1692g notice, complicating the matter where the debt collector is an attorney or law firm. The consumer’s receipt of this notice starts the clock running on the 30-day right to demand verification of the debt from the debt collector.
• Provide verification of the debt If a consumer sends a written dispute or request for verification within 30 days of receiving the §1692g notice, then the debt collector must either mail the consumer the requested verification information or cease collection efforts altogether. Such asserted disputes must also be reported by the creditor to any credit bureau that reports the debt. Verification should include at a minimum the amount owed and the name and address of the original creditor.
• File a lawsuit in a proper venue If a debt collector chooses to file a lawsuit, it may only be in a place where the consumer lives or signed the contract Note, however, that this does not prevent the debt collector from being sued in other venues for violating the Act, such as when the consumer moves outside the venue and a letter demanding payment is forwarded to the new address, even if the debt collector is unaware of such a change in residence.

Prohibited Conduct – FDCPA – 15 U.S. Code § 1692 et seq.

Prohibited:
The Act prohibits certain types of “abusive and deceptive” conduct when attempting to collect debts, including the following:
• Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time
• Failure to cease communication upon request: communicating with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted
• Causing 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.
• Communicating with consumers at their place of employment after having been advised that this is unacceptable or prohibited by the employer
• Contacting consumer known to be represented by an attorney
• Communicating with consumer after request for validation has been made: communicating with the consumer or the pursuing collection efforts by the debt collector after receipt of a consumer’s written request for verification of a debt made within the 30 day validation period (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor’s name and address
• Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector’s misrepresentation that he or she is an attorney or law enforcement officer
• Publishing the consumer’s name or address on a “bad debt” list
• Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law
• Threatening arrest or legal action that is either not permitted or not actually contemplated
• Abusive or profane language used in the course of communication related to the debt
• Communication with third parties: revealing or discussing the nature of debts with third parties (other than the consumer’s spouse or attorney) (Collection agencies are allowed to contact neighbors or co-workers but only to obtain location information; disreputable agencies often harass debtors with a “block party” or “office party” where they contact multiple neighbors or co-workers telling them they need to reach the debtor on an urgent matter.)
• Contact by embarrassing media, such as communicating with a consumer regarding a debt by post card, or using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of mail or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business
• Reporting false information on a consumer’s credit report or threatening to do so in the process of collection