Can the Debt Collector Do That? What the FDCPA Prohibits.
The Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692k, is a federal statute that restricts certain types of debt collector activities. The FDCPA is a strict liability statute that applies to those “who regularly collect or attempt to collect debts owed or due another.” The FDCPA provides powerful tools to consumers in the form of actual damages (including emotional distress), statutory damages and fee-shifting, as well as the ability to bring a class action.
- Failing to provide a proper “validation notice”. Within 5 days after an initial communication, a debt collector must send the consumer a written notice containing: (1) the amount of the debt; (2) the name of the creditor; and (3) a statement that the consumer has 30 days to dispute the debt.
- Failing to cease collection activities while the debt in dispute. If the consumer disputes the debt after receiving a validation notice, the debt collector must cease collection activities until the validation procedure is completed.
- Making the false representation that a communication is from an attorney. Debt collectors cannot send correspondence or claim attorney involvement when they are not an attorney.
- Making the false representation that failure to pay will result in arrest or imprisonment. Debt collectors cannot have a consumer arrested or sent to jail for not paying a debt.
- Threatening to take any action that cannot legally be taken. Examples would include: an unlicensed attorney threatening to file a lawsuit; threatening suit on a time-barred (past the state statute of limitations) or threatening to sue on bankruptcy discharged debt.
- Collecting any amount not expressly authorized by the agreement creating the debt or permitted by law. This is sometimes referred to as “debt padding,” and includes instances where the collector tacks on fees not allowed under the law.
- Calling before 8 a.m. or after 9 p.m.
- Making repeated or continued calls designed to harass the debtor.
- Calling the debtor’s place of employment when the collector knows the employer prohibits such contacts.
- Communicating with a debtor when the debt collector knows the debtor is represented by counsel.
- Any other harassing, abusive or deceptive conduct by debt collectors. We’ve seen all types of outrageous conduct by debt collectors. As a general rule, if it seems abusive, then it’s probably a FDCPA violation!
Special Laws for Debt Collectors Calling a Consumer’s Cell Phone
In addition to a consumer’s right under the FDCPA to be free from harassing debt collection calls, a separate federal law called the Telephone Consumer Protection Act (TCPA) prevents “auto dial” phone calls from a debt collector to your cell phone.
The TCPA says that a debt collector may not contact a debtor using an “auto-dialer” or “pre-recorded message system” which calls the consumer’s cell phone unless the consumer has given express permission. This is limited only to companies that use an auto-dial system. Auto-dialer systems are easily identified because when you answer the call, there is no live person on the line; you usually hear a pre-recorded message asking you to hold for next available representative, or it says that the call is for (a person’s name) and if you are not that person then please hang up. Unless the consumer gave their cell phone number at the time they signed the original contract or applied for credit, they may have a claim for money damages.
Advising Personal Injury Clients on their Rights under the FDCPA
Personal injury victims are frequently the targets of debt collection harassment. Clients may not know they have rights in dealing with collectors, or may fail to advise you as their personal injury counsel about the harassment they are receiving. Consider asking new clients if they have been harassed by debt collectors prior to retaining you. Also consider advising clients to do the following after they have retained you to prosecute their personal injury claim:
- Keep a log of the date, time, name and telephone number of all collection calls.
- Record the telephone call after telling the collector “I am recording your call and if you continue talking that will be considered your consent to being recorded.”
- Save voicemail messages from debt collectors.
- Save all correspondence from debt collectors.
If you are the victim of illegal debt collector conduct, reach out to us. We are here to help!
Bishop, Heenan & Davies Law Firm
1631 Zimmerman Trail
Billings, MT 59102