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FDCPA

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)

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Supreme Court to Hear Case on Statutory Damages Without Actual Harm; Could Impact FDCPA Cases

The U.S. Supreme Court has agreed to hear an important case that will decide whether a plaintiff who cannot show any actual harm from a violation of the FCRA nevertheless has standing to sue for statutory damages in federal court. The consequences of the decision will likely extend significantly beyond FCRA litigation and affect numerous other statutes, including the FDCPA and TCPA .

man-reading-letter

Federal Judge Sides with Collection Agency and Debt Buyer in Letter Class Action

A federal judge in Illinois two weeks ago dismissed an FDCPA class action filed against a debt buyer and its contracted collection agency over the use of the word “transferred” in a collection letter explaining why a new company was attempting to recover the debt. The case had been granted class action status and will be appealed to the Seventh Circuit.

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Circuit Court Revives FDCPA Suit Over Collection Law Firm’s Actions

The Third Circuit Court of Appeals earlier this month reversed a lower court’s ruling in a case brought against Bank of America in which the plaintiff alleged FDCPA violations on the part of a law firm collecting on BofA’s behalf. The defendants argued that the FDCPA does not apply to attorneys engaged in the practice of law, which the Circuit panel rejected.

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ARM Firms Should Assess Multidistrict Litigation for Simultaneous FDCPA and TCPA Cases

Collection agencies, debt buyers and credit granters are often under siege, forced to defend against identical claims on multiple jurisdictional fronts, regardless of whether the claims are on behalf of an individual or a putative class. One strategy for consolidating the defense of identical claims is to file a motion with the U.S. Judicial Panel on Multidistrict Litigation (MDL) to transfer claims to a single venue.

Envelope on Fire

Is Your Envelope “Benign” Under The FDCPA?

There has been a lot of litigation relating to envelopes recently, but section 1692f(8) of the FDCPA, which regulates collection envelopes, is not new. It has been a source of frustration for collectors for decades. Fortunately, some courts have recognized that a strict application of section 1692f(8) may lead to absurd results, and have held that “benign language” on an envelope does not violate the FDCPA. Unfortunately, the word “benign” can be VERY slippery.