Damages under FDCPA including discussion of emotional distress damages
Understanding the FDCPA and its Damages
There is often confusion about the damages one can receive under the Fair Debt Collection Practices Act (FDCPA). When you sue an abusive debt collector under the FDCPA, what exactly are you entitled to? Is it less than a thousand dollars, a hundred thousand, or can you get punitive damages? This article aims to clarify these questions and provide a comprehensive understanding of the FDCPA and its associated damages.
Firstly, it’s important to note that you cannot get punitive damages under the FDCPA. You may have another claim, particularly under state law or federal law like the Fair Credit Reporting Act, which can get you punitive damages under the right circumstances. However, when it comes to the FDCPA, there are two forms of damages we focus on statutory damages and actual or compensatory damages.
Statutory Damages under the FDCPA
Statutory damages are the most common and also where there’s a lot of confusion. These can be up to a thousand dollars. Some people believe that you automatically get a thousand dollars if you sue under the FDCPA, but that’s not entirely true. Even if you win your case, you’re not guaranteed to get a thousand dollars. Conversely, it’s also incorrect to say that you can never get a thousand dollars, as you certainly can get a thousand-dollar statutory.
Statutory damages are designed for situations where you cannot prove that you have actual damages. You can think of them as a penalty where the government incentivizes consumers to file a lawsuit against debt collectors who are breaking the law. Unfortunately, the amount hasn’t been raised since 1977, so a thousand dollars might not seem like much today, but it is what it is. The amount can range from a hundred dollars to a thousand, and the court determines the exact amount based on several factors, including the intentionality and frequency of violations. It’s usually interpreted as a thousand dollars per defendant, not per violation.
There are certainly lawsuits where only statutory damages are claimed because the debt collector’s actions didn’t cause emotional distress or monetary loss. In such cases, the claim is essentially saying, “Hey debt collector, you violated the law, and I want you to pay these statutory damages.”
Actual or Compensatory Damages under the FDCPA
The other form of damages under the FDCPA is actual or compensatory damages. They are called compensatory because they are meant to compensate us. If you were at a certain point before the debt collector did something bad to you and it brought you down, compensatory damages aim to bring you back to where you were. These damages are meant to compensate for the harm caused by the debt collector’s actions.
Types of Compensatory Damages
Compensatory or actual damages can be categorized into two types: economic and non-economic damages.
Economic Damages
Economic damages refer to the monetary losses you’ve incurred due to the actions of the debt collector. For instance, if a debt collector continues to call you at work despite your requests for them to stop, and you end up getting fired, you’ve lost income. This loss of income, including the gap in wages if you find a new job that pays less, is part of your compensatory damages.
Another example could be if a debt collector puts something false on your credit report or fails to mark a debt as disputed. This could lead to you missing out on a mortgage or getting a higher interest rate. The difference in interest rates, which could add up to a significant amount over the term of the loan, is also considered economic damage.
Calculating these damages can get a bit complex, especially when considering future losses. For instance, if the higher interest rate adds an extra $200 to your monthly mortgage payment over 30 years, that’s a substantial amount. However, since part of that is going way out into the future, we bring it back to the present value using a mathematical calculation.
Other examples of economic damages could include higher rates on car loans, credit card loans, or lost business opportunities or investments due to the inability to secure financing. The key point is that if you can show that you wouldn’t have incurred these losses if the debt collector hadn’t broken the law, you may be able to claim these as damages.
Non-Economic Damages: Emotional Distress
The other type of actual damage is emotional distress, sometimes referred to as mental anguish. This refers to the psychological impact of the debt collector’s actions. It’s not about minor annoyances, but serious distress that may even manifest in physical symptoms like stomach issues, headaches, or sleep disturbances.
Emotional distress could also affect your interactions with your family or your performance at work. If the debt collector’s actions have caused you to be more stressed, irritable, or less productive, these are considered damages. The idea is the same as with economic damages: if the debt collector’s actions have brought you down from where you were before, they owe you for that gap.
Unlike economic damages, emotional distress is not as easy to quantify. However, a jury can decide on the amount. In many states, including Alabama, juries are instructed that there is no legal yardstick to measure emotional distress and are asked to use their good common sense to determine the amount of damage the consumer has suffered.
In summary, under the FDCPA, you can claim statutory damages up to a thousand dollars, and actual damages, which include economic damages (like lost income or higher loan rates) and non-economic damages (like emotional distress).
Demonstrating Damages in Court
When it comes to demonstrating these damages in court, precision is key. Whether it’s economic or emotional distress damages, the more specific and solid your evidence, the better.
Demonstrating Economic Damages
For economic damages, you need to provide concrete evidence of your losses. If you’re claiming higher mortgage rates due to the debt collector’s actions, get the mortgage broker, loan officer, or mortgage originator to testify. They can provide the exact figures and dates, showing the difference between what you would have gotten the loan for and what you ended up getting due to the debt collector’s actions.
If you lost your job or missed out on an opportunity, provide evidence of your previous income and what you missed out on. The more precise you are with these details, the stronger your case will be.
Demonstrating Emotional Distress Damages
Demonstrating emotional distress damages can be a bit more challenging, but it’s equally important to be specific. Rather than simply stating that the debt collector’s actions “bothered” you, describe in detail how you felt and how it affected your life. Did it cause physical symptoms like headaches or sleep disturbances? Did it affect your relationships or work performance? The more specific you can be about these impacts, the better.
Corroboration from others can also be incredibly valuable in proving emotional distress. If others noticed a change in your behavior or mood following the debt collector’s actions, their testimony can strengthen your case. They can confirm that you were indeed affected by the debt collector’s actions, providing additional evidence of your emotional distress.
However, it’s important to know the laws of your state and federal circuit regarding emotional distress and mental anguish. Different jurisdictions may have different standards or requirements for proving these types of damages.
A Tip for Demonstrating Damages
A useful analogy to consider when demonstrating damages is to think of your claim as a table. Your statement that things were tough or that you were stressed is like the tabletop. Without any legs (specific instances and evidence), the table will fall. But the more legs you add (specific instances where the debt collector’s actions caused harm), the more stable the table becomes. The more specific and numerous your instances are, the stronger your case will be.
In conclusion, when claiming damages under the FDCPA, it’s crucial to be as precise and detailed as possible. Whether you’re claiming economic damages or emotional distress damages, the more specific and solid your evidence, the stronger your case will be.
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