Collection Lawsuit Defense Lawyer Discusses the FDCPA
An Experienced Collection Lawsuit Defense Lawyer Discusses Important Consumer Rights with Respect to Debt Collection and Reporting Practices
If one of your creditors is attempting to collect a debt from you it is important to consult with a collection lawsuit defense lawyer to advise you of important rights that you have. The Fair Debt Collection Practices Act (the “FDCPA”) is a federal law that places important restrictions on debt collection agencies in order to protect consumer rights. The FDCPA sets forth significant penalties where debt collectors fail to abide by the law. In addition, the Fair Credit Reporting Act (the “FCRA”) imposes further restrictions and penalties on third-party debt collectors with respect to credit reporting practices.
What is the Fair Debt Collection Practices Act?
The Fair Debt Collection Practices Act was initially enacted in 1977. The FDCPA was enacted to combat the abusive collection practices of third-party debt collectors. Debt collectors must abide by the terms of the FDCPA if:
- They are a third-party debt collector. The original creditor is not subject to the debt collection restrictions of the FDCPA.
- The debt is considered a personal debt. Examples of personal debts include credit card accounts, health care bills, car loans and mortgages.
Under the terms of the FDCPA third-party debt collectors that are attempting to collect a personal debt cannot:
- Contact the consumer at an inconvenient time. This is generally considered to be before 8:00 a.m. and after 9:00 p.m.
- Contact the consumer if the debt collector knows that the consumer is represented by a collection lawsuit defense lawyer
- Contact the consumer at his or her place of employment if the collection agency has reason to know that the consumer’s employer prohibits such communications.
- Contact or discuss the debt with anyone other than the consumer or his attorney without first obtaining the consumer’s consent.
- Use unfair practices in attempting to collect the debt, such as: lying to you, implying that you have committed a crime or concealing his or her identity on the phone.
- Attempt to collect a debt that has been disputed by the consumer pursuant to 15 USC § 1692g if the third-party debt collector has not provided the consumer with verification of the debt.
If a third-party debt collector violates any provision of the FDCPA the consumer can file a civil complaint against the debt collector in either State or Federal Court. The consumer may be able to collect up to $1,000 plus attorney’s fees and costs. Violations of the FDCPA are often addressed in conjunction with the Fair Credit Reporting Act.
What is the Fair Credit Reporting Act?
The Fair Credit Reporting Act is a federal law that governs how consumer data is reported, disclosed and used. The FCRA requires consumer reporting agencies, among other things, to:
- Provide you with a copy of your credit report free of charge on an annual basis.
- Investigate information disputed by a consumer, correcting or deleting the inaccurate data or notifying the consumer within 30 days of the dispute.
- Delete negative information that is over 7 to 10 years old depending on the type account.
The FCRA also applies to entities reporting information to the credit bureaus, such as third-party debt collectors. It is worth noting that the FCRA does not require these entities to report information to the bureaus. However, to the extent that information is being reported, the third-party is required to abide by the terms of the FCRA. Under the FCRA, third-party debt collectors must:
- Report accurate credit information.
- Update and correct any inaccurate information that was provided to the credit bureaus.
- Disclose to you any negative information that was reported to the credit bureaus within 30 days of such disclosure.
- Disclose when a consumer voluntarily closes an account.
If a consumer’s rights have been violated under the FCRA, the consumer may file a civil complaint seeking statutory damages up to $1,000, punitive damages, attorney’s fees and costs, as well as actual damages incurred provided they can be proved.
How Do I Dispute a Debt from a Third-Party Debt Collector?
Under 15 USC § 1692g(a), a debt collector must send a consumer within 5 days of the initial communication a written notice which states the following:
- The amount of the debt;
- The name of the creditor that the debt is owed to;
- A statement advising the consumer that he or she must dispute the debt within 30 days of the receipt of the notice, and that if the consumer fails to dispute the debt it will be considered valid; and
- A statement that if the consumer disputes the debt within the 30-day period the debt collector will be required to obtain and provide to the consumer verification of the debt.
Sometimes the collection agency will include all the above information in the initial communication with you. Once you receive the written notice from the third-party debt collector, it is important that you respond in writing within 30 days of your receipt of the notice. Disputes are governed by § 1692g(b) of the FDCPA. There are plenty of examples of dispute letters online that you can use to notify the debt collector. In the alternative, an experienced collection lawsuit defense lawyer can write the letter on your behalf, as well as handle all subsequent communications with the debt collector.
The reason we discuss the FCRA in connection with the validation provisions of the FDCPA is that debt collectors often fail to report to the credit reporting agencies when a debt has been disputed by a consumer. Such disclosures are required pursuant to § 1692e(8) of the FDCPA. Thus, in addition to a potential claim under the FDCPA, the debt collector may also be liable for violations of the FCRA for failing to accurately report the debt to the credit bureaus.
In many cases the debt collector will fail to provide the consumer with verification of the debt as required under § 1692g. In such cases, the debt collector is not permitted to continue to attempt to collect the debt from the consumer. Moreover, the debt collector must also notify the credit bureaus to remove the account from the consumer’s credit report. If the collection agency fails to do so, the consumer can file a civil complaint against the debt collector seeking damages.
Contact a Collection Lawsuit Defense Lawyer
Facing a collection action can be frightening. Debt collectors often engage in abusive practices and seek to take advantage of consumers’ lack of knowledge about collection laws. It is important to level the playing field. Contact an experienced collection lawsuit defense lawyer today to discuss your rights and options.