Attorney Asks, “Why Do Collectors Continue to Violate the Law?”

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Attorney Paul A. Herman, Esq., gets asked this question a lot: “Why do collectors continue to violate the law knowing that they could be hit with a statutory penalty and have to pay the consumer’s attorney fees and costs?

And boy, does he have answers!

“The bottom line is that it is still extremely profitable to disregard what is considered legal and ethical, with regard to debt collection.”

He goes on:

“With most violations only costing up to $1,000 per violation, the courts have generally interpreted that to mean the type of violation versus the number of violations. Thus, even if someone makes numerous harassing phone calls, they may only get charged for that type of violation instead of $1,000 for each harassing call.

Even with attorney fees and costs, if the collector is only going pay $4,500 from an FDCPA lawsuit and the debt exceeds that amount, the debt collector is still in a position to make money from the debt collection. If, statistically, they can get away with collection violations nine out of 10 times, it becomes financially worth it for them to continuously break the law in order to collect on a debt.”

Collection attorneys? Agency owners? What say you?

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Posted in Accounts Receivable Management, Collection Laws and Regulations, Debt Collection .

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Continuing the Discussion

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  • avatar Jennifer Skornik says:

    To me that answers the question “why wouldn’t a collection agency try to avoid violations?” However, I have yet to encounter a legitimate debt collection agency that is not trying to avoid violations. Many are spending money on personnel, policy enforcement, monitoring, third party evaluations, etc in order to avoid violations.
    So why do collectors continue to violate the law? Why do you continue to speed on the freeway? Sometimes you’re trying to get away with something and you don’t think anyone is going to get hurt. Sometimes you don’t realize how fast you’re going until you get pulled over.

  • avatar James Hoblick says:

    That is the dumbest thing I’ve ever heard.
    I believe a little more time should be spent reviewing cases brought against collection agencies before answering the question. What you would find is that Predator attorneys are using the laws to establish a lucrative income. Not for justice. If you look at the statistics, FDCPA filings have gone down but TCPA filings have gone up. Why? It’s more money in the attorney’s pocket. It has nothing to do with an agency wanting to violate any law or risk vs reward issue.
    Yes there are some bad eggs and they should be brought to JUSTICE. However, when someone has decided to take on debt and not pay that should be a crime. And allowing attorneys and debtors to profit from a service attempting to recover the debt is wrong.

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