Practical guide to using the FDCPA to stop a debt collector from abusing you
What is the FDCPA?
It is the Fair Debt Collection Practices Act is a law that regulates and governs debt collectors.
it tells debt collectors what they can do, and what they cannot do.
It also tells debt collectors that if they break the law, these can be the consequences.
3 requirements for the FDCPA to apply
One-you must be a consumer
This one is pretty easy.
If somebody comes to me and says, “I’ve got a debt collector harassing my partnership, or my corporation, or my LLC.” then they aren’t qualified under the FDCPA.
You have to be a human, not an entity to qualify as a consumer.
This doesn’t apply to businesses.
Two — the debt (or alleged debt) must be a consumer debt, not a business debt
This can be a little complicated to draw the line here.
Here’s the jist of this requirement.
If this is something that you use for personal reasons such as paying for your mortgage, going on a vacation, paying for medical bills, buying groceries, or buying gas, then it qualifies.
However, if you use this for a business or your employer, then that generally will not be considered consumer debt. That would be considered business debt.
It does get a little complicated.
If you have questions on this, please feel free to contact us.
Three — the one collecting must be a “debt collector”
This means that they’re in the business of collecting debts.
Now, it might be someone else’s debt.
That’s the traditional debt collector or debt collection agency.
Or it may be that they’re collecting on their own debt, but they buy the debt when it’s in default.
When it’s in default, just look at the contract, and normally it says that the contract is in default if you don’t make the payment by the due date.
So, we’re not talking about original creditors.
Here’s an example:
if you have a Discover Card, and Discover is calling you, they’re most likely not a debt collector.
However, if it’s Midland Credit Management, LVNV, or Portfolio Recovery calling you after they have received the debt, and they almost always get the debt when you’re in default.
They’re going to be the debt collector, whether or not they own the debt, whether they bought the debt, or whether they are simply collecting on behalf of somebody else.
Again, this gets a little complicated, so please feel free to contact us if you have questions.
We will be happy to help you.
What does the FDCPA prohibit?
This can be summarized in two ways.
It says to debt collectors, “you cannot lie, and you cannot do anything that is unfair.”
Let’s look at these two things.
What counts as a lie from them?
Well, anything that they say that is untrue.
Here’s a couple examples.
You pay off a debt (we almost always have cases like this), but then a debt collector comes along and says, “you still owe $2,000.”
Well, do you owe $2,000?
Because you paid it off.
So, is that a true statement that you owe this amount?
No. That’s a lie.
What about if a debt collector says, “I’m going to sue you,” however they have no intention of suing you?
That’s a lie.
What if the debt collector says, “I’m going to garnish your wages tomorrow if you don’t pay this bill,” but they don’t have the legal right to do so?
That’s also a lie.
How about when they sue you claiming you owe money, but you really don’t? And the proof is you win the collection case against you.
That’s a lie.
What if they say, “I’m going to call your family, friends, co-workers…” but they have no legal right to do it.
That’s a lie, too.
The FDCPA tells us a lot of situations that are unfair, however it still leaves it open ended.
Because debt collectors are rather creative.
At least, the abusive ones are.
Here are some examples.
Calling third parties.
Calling a third party is when they call someone who isn’t you or your spouse.
So, if they call your mother-in-law, your sister, etc., they’re treating you unfairly.
It’s a very limited exception that they can do that.
Suing you after the Statute of Limitations has expired.
That would be unfair. And it is very common, especially be certain infamous debt collectors.
If you say to the debt collector, “I’ll tell you what, you can pull $100 out of my account today, but that’s it.” Then they pull out $500.
That would be unfair.
Then the next month they pull out $500.
That would be unfair.
Now, there’s a lot of overlap. Often something that is a lie is also unfair.
It could be that they call you seven times a day.
That would be unfair, harassing type behavior.
There’s a variety of ways that they lie and treat you unfairly.
If you have questions about this, feel free to contact us.
Documentation is key
We need to have the proof. So if someone says, “This debt collector is calling me a dozen times a day” then we need some evidence of that.
Screenshots of missed calls.
Even handwritten notes of the times of the calls.
Now if you don’t have it for the past, document the calls starting today.
Whatever the proof is — send that. Send the letter where you paid off the debt and then the letter where the debt collector is still trying to collect the debt that has been paid.
Same thing with false credit reporting — send us the credit reports. If the response is, “I’m too busy to document this.” OK, that’s fine. Then they are too busy to have us represent them.
But for you — since you are still reading this — you will not use that excuse. Instead, simply get us the proof we need to be able to help you. We want to have a solid case.
What does the FDCPA do for you?
This means that for almost all purposes, the intention or motives of the debt collector don’t matter. The question is simply “Did the debt collector violate the law?”
Strict liability is very helpful and makes up for some shortcomings of the FDCPA — such as no punitive damages. (We have to get our punitive damages under Alabama state law claims).
This is up to $1,000 per lawsuit. Even if you were not injured, you can still get this money. The reason is to encourage you to file suit as the federal government can’t regulate all the abusive debt collectors so they want for any consumer who is abused by a debt collector to sue.
These are also known as “compensatory” damages under Alabama law. This means the amount of damages to compensate you — or put you back in the position you were right before the debt collector broker the law.
Here’s an example:
The debt collector (AmSher for example) calls you at work. You tell them you can’t get the calls at work. They continue to call and you lose your job.
Then your “actual” or “compensatory” damages would be the money you lose and promotional opportunities you lose.
Midland Funding puts false information on your credit report. This cost you a mortgage — instead of getting it at 5% you can only get a loan at 8%. The difference over the life of the loan can be part of your damages.
And in almost every FDCPA case we have filed, our client has suffered “mental anguish” or “emotional distress” damages. It is very natural and understandable that when an abusive debt collector treats you unfairly or lies to you, there will be consequences. Including being very upset about it. You can often be compensated for this.
“Case expenses paid”
This means whatever your lawyers have to spend to prosecute the case can be reimbursed. So for example, it costs $400 to file a federal court lawsuit. That’s the check we write out to the clerk of the federal court.
The reason for this rule is to encourage consumers to sue knowing that they will be reimbursed for what are called “costs” paid to prosecute the case.
“Attorney fees paid”
This means the debt collector may have to pay your lawyers their hourly rate. Our rate for a few years has been $400 per hour. This can really add up.
And when you think about the debt collector has to pay its lawyers and pay you and pay your lawyers, you can see the motivation to settle when the debt collector knows it has been caught breaking the law.
Knowledge is power?
Nope — not even close. We can have all the knowledge in the world but if we don’t act on it, what good does it do us?
So I want to congratulate you for learning about this amazing law but learning is not enough.
Only Knowledge+Action is power!
Take your knowledge. And take massive action.
Maybe that is to document. Or pull your credit reports. Or maybe that next step is to reach out to us so we can talk about what has happened and what your options are going forward.
Make sure you do something now.
So take action now!
If we can help you — then calling us will be a great action you can take right now. Call us at 205-879-2447 or click on the button below — we’ll be happy to help you any way we can.
Best wishes and talk soon!