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.
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.