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The Fair Debt Collection Practices Act (FDCPA) was enacted in 1977 to protect consumers from abusive, unfair, and deceptive practices by third-party debt collectors. The law details when and how a collector may contact a debtor. The government enforcer of the law has historically been the Federal Trade Commission (FTC), but some regulatory duties may be shared with the Bureau of Consumer Financial Protection housed within the Federal Reserve, created in 2010.
The FDCPA is a strict civil liability law, which means that a consumer need not prove actual damages in order to claim statutory damages of up to $1,000 per violation plus reasonable attorney fees.
It is commonly believed that the FDCPA will be amended and/or updated in the 112th Congress (2011-2012).
The complete Fair Debt Collection Practices Act (PDF, 326 KB)
A United States District Court recently concluded that certain states’ judicial structures provide that the Circuit Courts are considered “judicial districts” for purposes of the required venue provisions in the Fair Debt Collection Practices Act, 15 U.S.C. § 1692i, but township small claims courts are not.
The Consumer Financial Protection Bureau has been very busy lately, of course. Most of its attention seems to be focused on various sectors of the consumer finance industry. But the agency did recently reveal its intention to return some focus to the debt collection industry.
A court recently ruled that calls to mobile phones must be done manually and not via any system with the capacity to make automated dials. The challenge itself is quite simple: How does an organization, charged with recovering debt from consumers, make enough “manual” phone calls to a growing mobile population to reach enough consumers to actually make any money?
A district judge in Maryland last month dismissed a potential class action lawsuit against a debt buyer due, in part, to a rejection of the notion that a technical error constituted a violation of the Fair Debt Collection Practices Act (FDCPA). Another claim that tried to piggyback on the widely-publicized “robo-signing” issue with debt collection lawsuits was also rejected.
It’s probably the most important balancing act a collection agency has to master: call volume, which can translate to increased profits, balanced against call compliance, which can drain a ledger sheet if ignored and put your agency’s reputation and existence at risk. Higher contact rate is the stat that, of course, every collection agency strives [...]
The Federal Trade Commission and the Consumer Financial Protection Bureau will co-host a roundtable on June 6, 2013, to examine the flow of consumer data throughout the debt collection process. The roundtable’s official title is “Life of a Debt: Data Integrity in Debt Collection.”
Over one-third of all debt collection complaints filed with the Federal Trade Commission (FTC) focus on so-called “repeat calls.” With most collections efforts requiring repeat outreach to the same contacts, it becomes imperative that organizations strategically manage the number of outreach attempts to debtors.
A U.S. district court earlier in April ruled that when a debt collector accused a debtor of lying during a telephone call, it was sufficient to continue a case for a claim under the harassment and abuse provisions of the Federal Debt Collection Practices Act (FDCPA).
Sometimes it seems like everything a debt collector does can be parsed as a potential violation of some consumer statute, at least enough so to bring a civil action. Even when it appears the tide of precedent-setting court cases is turning in favor of the ARM industry, there are decisions that bring collection professionals back to reality.
The FDCPA very loosely defines “harassment.” But a phrase used to define harassment — contacting a consumer “repeatedly or continuously” — isn’t defined at all. Yet this is the basis of many FDCPA claims made against ARM firms.
Why leave interpretation up to judges when Congress, or at least the CFPB, can define it?