Class Actions

The Fair Debt Collections Practices Act (known as the “FDCPA”) is a federal law that prevents debt collectors (such as law firms and collection agencies) from using unfair practices in attempting to collect a debt. We all know that debt collectors can be aggressive. However, the FDCPA was designed to put limits on how far a debt collector can go to collect a debt. As examples, the FCPA prohibits debt collectors from:

• Communicating at an unusual time or place that he or she knows would be inconvenient to the consumer (the person who allegedly owes the debt). The debt collector must assume that it is inconvenient for a consumer to be contacted after 8 p.m. and before 9 a.m. based on the time at the consumer’s location;
• Contacting a consumer who the debt collector knows to be represented by an attorney;
• Contacting the consumer’s place of employment if the debt collector has reason to believe the consumer’s employer prohibits the consumer from receiving calls at work;
• Contacting anybody (without the consumer’s express permission), other than the consumer, his or her attorney, the original creditor, or a consumer reporting agency (such as Experian, Transunion, or Equifax);
• Continuing to contact the consumer after the consumer has provided the debt collector with written notice that the consumer is refusing to pay the debt or that the consumer no longer wishes to be contacted;

• Harassing, oppressing, or abusing a consumer. The FDCPA gives some examples of what would constitute harassment, oppression, or abuse such as:

• Threatening violence or other criminal means to hurt the consumer’s reputation or property;

• Using obscene or profane language;

•  Publishing a list of consumers who allegedly owe debts;

• Causing a telephone to ring or engaging any person in telephone calls repeatedly or continuously with intent to annoy, abuse, or harass any person at the number called; and

• Making a telephone call without disclosing that the caller is a debt collector.

Using any false, deceptive, or misleading representation as a means of collecting a debt. The FDCPA gives some examples of what constitutes false, deceptive, or misleading representation, such as:

• Falsely stating or implying that the debt collector is working on behalf of the government;
• Falsely representing the amount or legal status of the debt. Here, debt collectors will commonly threaten to file a lawsuit against a debtor, even though the statute of limitations has expired;
• Falsely claiming to be an attorney or associated with a law firm (unless the debt collector actually is an attorney or calling from a law firm); Falsely claiming that failing to pay the debt will result in imprisonment. You need to be aware that, with certain exceptions such as tax debts and child support, it is unconstitutional to imprison a person for failing to pay a debt. Thus, any claim to the contrary is false and a violation of the FDCPA;
• Threatening to take any action that cannot be legally taken or that the debt collector does not, in fact, intent to take;
• Inferring that the consumer has committed a crime by failing to pay a debt;
• Communicating or threatening to communicate the consumer’s unpaid debt to a third party. Debt collectors will sometimes threaten to tell the consumer’s spouse, ex-spouse, or employer about a debt. Under the FDCPA, this type of threat is unlawful;
• Failing to disclose to the consumer (on the first attempt to collect a debt) that the debt collector is attempting to collect a debt;
• Falsely claiming that any document provided to a consumer is a legal document such as a lawsuit, garnishment, or lien; and
• Falsely claiming to be associated with a consumer reporting agency.

Using “unfair practices” in an attempt to collect a debt. The FDCPA gives some examples of what constitutes “unfair practices,” such as:

• Attempting to collect an amount that is not authorized by the agreement creating the debt. Commonly, debt collectors will attempt to collect interest, attorney’s fees, collection costs, etc. Unless the underlying agreement authorizes the collection of these types of fees, it is unlawful for the debt collector to attempt to collect them from the consumer;
• Coercing a consumer into writing a post-dated check and then subsequently threatening the consumer with criminal prosecution for “writing a bad check”;
• Causing charges to be accrued by the consumer such as by making collect calls or sending telegrams;
• Communicating with a consumer about a debt by post card; and
• Using any language or symbol, other than the debt collector’s address, on any envelope communicating with a consumer. Many debt collectors, in an attempt to embarrass a consumer and coerce the consumer into paying the debt, will include language on the envelope such as “ATTEMPT TO COLLECT A DEBT.” Doing so is illegal under the FDCPA. Similarly, if the collection agency’s name indicates that it is a collection agency (i.e. “ABC Collection Agency”), it may not include its name on the envelope. However, if the collection agency’s name does not indicate that it is a collection agency, it may include its name (i.e. “ABC Corporation”).

In addition to the requirements listed above, the FDCPA also has very specific requirements on the validation of any debt that a debt collector is attempting to collect. For example, within five days of the debt collector’s initial communication with a consumer, the debt collector (unless the initial communication already disclosed these things) must send the consumer a written notice containing:

• The amount of the debt; · The name of the creditor to whom the debt is owed;
• A statement that unless the consumer, within 30 days after receipt of the notice, disputes the validity of the debt, the debt will be assumed valid by the debt collector;
• A statement that, if the consumer disputes the debt within 30 days, the debt collector will obtain verification of the debt from the original creditor (i.e. the credit card company, etc.); and
• A statement that, upon the consumer’s written request within the 30 day period, the debt collector will provide the consumer with the name and address of the original creditor.

It is important to note the FDCPA explicitly states that, even if you do not dispute the validity of the debt within the 30-day period, failing to dispute the debt DOES NOT constitute an admission that the debt is valid. If you are currently receiving communication from a debt collector, you are likely very interested in learning more about the law. To read the full text of the FDCPA, visit here.

If you believe that a debt collector has violated the provisions of the FDCPA, call Hollingshead & Dudley immediately for a free consultation.