Debt Collection Harassment: FDCPA Lawsuits

Debt harassment is an illegal aspect of debt collection that has been specifically outlawed in the federal Fair Debt Collection Practices Act (FDCPA). The specific restrictions placed on third party collection agencies are specific and clear, and every person who is in serious financial trouble should understand their rights. They may require the help of an attorney to pursue those rights if a debt collection agency will not comply with the regulations, but in the worst case, the debtor may file a lawsuit against the collection agency for harassment and obtain compensation from the company.

Bill Collectors

There are a number of entities that may be involved in attempting to collect payments from past due debtors. Some will be able to keep any amount they collect, while others will only retain a percentage of that amount.

  • Original creditors – usually assign debt collection to a specific department or subsidiary of the company
  • Third party, or collection, agencies – these are often companies that collect debts on a contingency fee basis. They make no money, or in some cases a very small amount of money, if they do not collect any of the debt. Otherwise, they keep a specified percentage of the amount they collect.
  • Debt sales – some creditors actually sell their debts to other companies for a small percentage of the amount owed. This generally only happens when the debt is quite old, and the debtor has few assets with which to pay a debt.
  • Flat-fee agencies – these companies are paid a small fee to write a series of collection letters to the debtor in hopes of obtaining payment from the debtor directly to the creditor.

Of these types of collection agencies, the only ones subject to the FDCPA are the third party agencies. They are subject to a list of restrictions that include the prohibition to:

  • Make calls at unreasonable times, such as after 9 p.m. and before 8 a.m.
  • Make repeated annoyance calls to harass the debtor
  • Call the debtor's workplace when they know the employer prohibits it
  • Contact the debtor when they know they are represented by a lawyer
  • Use obscene or profane language
  • Use deceptive practices
  • Inform the public or the media that the debtor is a "bad debt"
  • Inform family, neighbors, and friends of the debt problems

Debtor Recourse

The debtor has the right to document any abuses that a collection agency uses and, if they continue, file a complaint with the national FTC, the local body that has oversight of the collection agencies, the original creditor, and the collection agency.

If that does not stop the harassment, the debtor has the right to file a lawsuit against the collection agency. If they have a valid case, they may win direct damages for such costs as therapy for anxiety or stress caused by the harassment and the cost of changing their phone number. They will also collect statutory damages of $1,000 and attorney's fees, court costs, and other fees.

Getting Legal Help with the FDCPA Lawsuits

The problem with filing a FDCPA lawsuit is that, if it is lost, the plaintiff will be required to pay all court costs and attorney's fees, which can only add to their debt problems. In order to ensure a solid case, they should contact a consumer rights attorney who has experience with FDCPA lawsuits and can not only advise them concerning whether or not to file the suit, but how best to pursue it.

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