Debt collection rights

Stop collection harassment with the FDCPA

The best way to stop collection harassment is to know and enforce your rights under the Fair Debt Collection Practices Act. The FDCPA is a powerful federal law that regulates what debt collectors can and can't do when collecting debts. In passing the FDCPA, Congress recognized the negative impact that abusive debt collection has on people and provided powerful remedies against collectors who break the law. Here's what you need to know about how the FDCPA protects you from debt collection harassment:

The FDCPA applies to "debt collectors" collecting "consumer debts"

The FDCPA only covers a debt collector that is collecting a debt for someone else. It does not apply to a creditor collecting its own debts. So if you are getting collection calls from a bank or credit card company that is collecting its own debts, the FDCPA doesn't apply. But the FDCPA does apply to collection agencies, debt buyers, and law firms who are collecting debts for someone else.

In addition, the FDCPA only applies when the debt being collected is a consumer debt. This is a debt used for personal, family, or household purposes. If the debt was incurred for a business, the FDCPA doesn't apply.

The FDCPA protects you even if you owe the debt

It doesn't matter if you owe the debt, the collector still must follow the FDCPA. The law recognizes that you shouldn't be subjected to collection harassment and abuse just because you owe someone money. The FDCPA also protects people who are being wrongfully pursued for debts that they don't owe.

Any conduct that is unfair, untrue, or harassing is prohibited

In general, any collection conduct that is harassing or abusive, false or misleading, or unfair is a violation of the FDCPA. This is extremely broad and potentially covers a wide range of collection tactics. The FDCPA itself and various court decisions have established that the following specific conduct is illegal:

This isn't an exhaustive list. If you think a collector's conduct might be illegal, you should talk to a consumer lawyer to determine whether the FDCPA has been violated.

How to use the FDCPA to stop collection harassment

The FDCPA gives consumers the power to sue a debt collector that violates the law. It's a great way to stop collection harassment cold and to hold the debt collector accountable for its illegal conduct. Under the FDCPA, a successful claim gets you:

  • Up to $1,000 in statutory damages (even if you've suffered no monetary loss);

  • Provable actual damages (including for emotional distress);

  • Your attorney fees and court costs must be paid by the collector

Most consumer lawyers, including me, handle FDCPA lawsuits on a contingency fee. This means that you don't pay us any fees unless I recover money for you and those fees come from the collector's pocket, not yours. Congress wrote the FDCPA this way to incentivize people to enforce the FDCPA and help the government regulate debt collectors and ensure compliance with the law.

You can sue under the FDCPA even if you owe the debt

I'm often asked whether a consumer can sue a debt collector under the Fair Debt Collection Practices Act (FDCPA) if they owe the underlying debt. The answer is a resounding YES! The main purpose of the FDCPA is to protect all consumers against debt collection abuses, whether they owe the underlying debt or not. In fact, most people who sue debt collectors under the FDCPA owe the debt.

The FDCPA prohibits abusive, deceptive, and unfair debt collection practices. Some of the more common debt collection practices prohibited by the FDCPA are:

  • informing third parties that you owe a debt;

  • contacting you at inconvenient times or contacting you at work after you've told the debt collector not to;

  • threatening you with violence;

  • using abusive or profane language;

  • threatening to take legal action when the debt collector has no intent to do so;

  • falsely implying that you committed a crime by not paying the debt.

If a debt collector violates the FDCPA, you have the right to sue the debt collector and recover damages. You are entitled to $1,000 in statutory damages and compensation for actual damages, such as emotional distress. And if your case is successful, the debt collector must pay your attorney fees. Because of this, most consumer lawyers will accept a FDCPA case on a contingency fee arrangement. This usually means you will not have to pay any attorney fees, unless your case is successful.

Collectors are liable for emotional distress caused by illegal collection tactics

The Fair Debt Collection Practices Act prohibits debt collectors from using false, misleading, abusive, and harassing tactics to collect debts. Under the FDCPA, any person who has been subjected to illegal debt collection practices may sue the debt collector to hold it accountable and enforce the law. If successful, the plaintiff is entitled to $1,000 in statutory damages and the collector must pay her reasonable attorney fees and costs. More importantly, the collector may also be responsible for compensating the person for any emotional distress that she has suffered from the illegal collection tactics. Commons symptoms of emotional distress caused by illegal collection practices include:

  • Crying

  • Loss of sleep

  • Loss of appetite

  • Headaches, vomiting, or stomach pain

  • Martial problems

  • Problems concentrating at work

While many debt collectors profess cold-hearted skepticism that a person could be so upset by collection efforts, I've worked with many clients who suffered from emotional distress symptoms. I had one client who spent many sleepless nights crying in her bedroom because a collector was pursuing her for a debt she already paid. Another client suffered from severe anxiety, nausea, and headaches because a collector pursued her for a debt she didn't owe. So I know for a fact that  illegal debt collection practices cause emotional distress.

The law says that a collector has to pay for the emotional damage their harassing or abusive collection tactics caused. While medical evidence is usually helpful in proving the extent and cause of the emotional distress, most courts don't require it. In most cases, it is sufficient for the person to testify in detail about their emotional distress symptoms. Often, a witness, such as a spouse, co-worker, or friend has seen the symptoms and can corroborate the plaintiff's testimony.

Depending on the severity and duration of the emotional distress, the amount of damages awarded can be significant.

For example, in Fausto v. Credigy, the collector made repeated calls and false threats of credit reporting over a Wells Fargo account. The Faustos believed that they had already paid off the account and told the collectors to stop calling. The collector continued to call--over 90 times in total. At trial the Faustos testified that they had many sleepless nights, an inability to eat, and the stress caused problems within their family. Ultimately, a Northern California jury awarded the Faustos $100,000 for emotional distress caused by the collector's harassment.

In another case, McCollough v. Johnson, Rodenburg & Lauinger, a collection law firm filed a lawsuit that was barred by the statute of limitations. The law firm, JRL, had information from its client that the suit was time-barred, but continued to prosecute it for 8 months. At trial, McCollough testified that JRL's wrongful lawsuit caused him anxiety, pain, increased temper, and conflict with his wife. Although McCollough already suffered from a disabling pre-existing condition due a traumatic brain injury, he characterized JRL's suit as the straw that broke the camel's back. A Montana jury awarded McCollough $250,000 for the emotional distress caused by JRL.

In another case, Yazzie v. Law Offices of Farrell & Seldin, a collection law firm tried to garnish the wages of Lucinda Yazzie, despite repeated notice that the debt was actually owed by someone else with the same name but with a different social security number. The law firm had changed the social security number in its files from the SSN of the correct account holder, to Ms. Yazzie's. Farrell & Seldin's collection attempts continued for three years. The New Mexico jury awarded Ms. Yazzie $161,000 for her emotional distress suffered during the three years of being wrongfully pursued for a debt that wasn't hers.

Similarly, in Mejia v. Portfolio Recovery Associates, a debt buyer sued the wrong person for a $1,000 credit card account. Ms. Mejia repeatedly told them it wasn't her debt, but the debt buyer persisted with the lawsuit. Ms. Mejia testified that the lawsuit terrified her and that she feared she would lose her house or be arrested. A Missouri jury awarded Ms. Mejia $250,000 for emotional distress.

Of course, these cases all involved particularly egregious collection conduct and severe emotional distress. Obviously, not every case results in these kind of damages.

But if you've endured illegal collection practices that caused you stress, anxiety, fear, or other symptoms of emotional distress, the law may require the collector to be accountable for your suffering.

Five reasons to sue a debt collector who violates the FDCPA

  • Up to $1,000 in statutory damages. If you successfully sue a debt collector, the court will award you up to $1,000 in statutory damages. These damages are provided by law as a penalty against a debt collector that violated the FDCPA and you don't have to prove that you suffered any actual harm to be awarded statutory damages. Although there are rare cases where a court awards a consumer less than $1,000, in most cases the consumer is awarded the full $1,000.

  • Provable actual damages. If a debt collector's abuse has caused you to cry or lose sleep or if the collector's harassment has affected your relationship with your loved ones or your performance at work, you may be able to recover actual damages. Not every consumer will suffer actual damages due to a collector's conduct, but if you can successfully prove that you've suffered tangible harm, you're entitled to compensation for that suffering.

  • A free attorney. Probably the most important remedy under the FDCPA is the fee-shifting provision. This means that if you win your case, the collector has to pay your attorney fees. Because of this, most consumer attorneys will sue a debt collector on a full contingency fee, which means that you don't have to give your lawyer any money up front. Your attorney gets paid by the debt collector or gets a percentage of any out-of-court settlement.

  • Your litigation costs are covered. Litigation can be expensive. The costs for filing fees, service fees, deposition transcripts, etc. can quickly add up. But if you win your FDCPA case, the debt collector has to pay all of your court costs.

  • Hold the debt collector accountable. When the FDCPA was enacted, Congress gave each individual consumer the right to sue a debt collector for violating the Act. The idea was that consumers and their attorneys would act as "private attorney generals" by holding debt collectors that violate the FDCPA accountable for their conduct through private lawsuits. Debt collectors love to lecture consumers about taking "personal responsibility" for paying their bills. An FDCPA lawsuit is a chance to turn this argument right back around at the debt collector and force them to take responsibility for their illegal debt collection tactics.

A simple test for figuring out whether a debt collector violated the FDCPA

The easiest way, perhaps, to figure out whether a debt collector has run afoul of the FDCPA is to think about the Act broadly. Without getting into specifics, the FDPCA prohibits debt collectors from doing anything that is (1) unfair; (2) untrue; or (3) harassing or abusive. Obviously, the Act lists a number of specific debt collection tactics that fall into these three categories. But the FDCPA also makes it very clear that any debt collection conduct--whether specifically listed in the Act or not--that is unfair, untrue, or harassing and abusive is a FDCPA violation.

So rather than poring over the text of the FDCPA or reading dozens of articles on the internet, just ask yourself this question: did the collector do something that was unfair; untrue; or harassing or abusive? If your answer to this simple question is yes, there's a good chance that the debt collector violated the FDCPA and your next move should be to contact a consumer rights lawyer.

How to request validation of a debt

The Fair Debt Collection Practices Act (FDCPA) gives consumers the right to request validation of a debt. Under the FDCPA, a debt collector must send you a written notice within 5 days of their first communication with you. The notice must tell you, among other things, about your right to request validation of the debt. In my experience, consumers should almost always request validation of the debt, particularly if a debt buyer is involved, because the more information you have, the better.  But here are a couple things to keep in mind about the validation process:

  • You must request validation in writing and you must request it within 30 days of your receipt of the required notice. Under the FDCPA, a debt collector doesn't have to honor a request for validation unless it's in writing and unless they receive it within 30 days of your receipt of the notice. As a practical matter, many debt collectors will honor a verbal request for validation and some will even honor a request made after the 30 days. But if you want to protect your right to have your debt validated, you must do it in writing and within 30 days. I recommend sending the letter via certified mail so that you can prove that they received it and when they received it.

  • Once you've properly requested validation, the debt collector must cease all collection attempts until they provide it to you. There are some websites that claim that a debt collector must validate a debt within 30 days and if they don't the debt is forgiven. This is simply not true. There is no time limit to how long the debt collector has to validate your debt. They just can't call you, write you, sue you, or take any other action until they validate. If they do, they've violated the FDCPA.

  • A debt collector can't use your failure to request validation of a debt against you. The FDCPA prevents collectors from using your failure to request validation as evidence that you owe the debt.

  • There aren't any clear requirements about what type of documents are sufficient validation. The FDCPA doesn't define validation, and the FTC has said that validation only needs to confirm that the debt collector is pursuing the right person and the right amount.

  • Collection activity during the 30 day validation period can't "overshadow" your right to request validation. This can be a little tricky, but here's an example: let's say you receive the validation notice on March 1 and then they serve you with a lawsuit on March 5. Under the FDCPA, you have 30 days--or until March 31--to request validation. And in Minnesota you have 20 days--or until March 26--to respond to a lawsuit. So because you have to answer the lawsuit before your time to request validation is up, the lawsuit "overshadows" your right to request validation. This is a violation of the FDCPA.

Does the FDCPA apply to my situation?

It is an unfortunate and little-known fact that the Fair Debt Collection Practices Act (FDCPA) does not apply to every debt collection situation. Two requirements must be met before the FDCPA comes into play.

First, the debt that is involved must be a "consumer debt". The FDCPA defines "consumer debt" as any debt where the money was used to buy goods or services that were "primarily for personal, family, or household purposes." What does this mean in English? It means that business debts are not covered by the FDCPA. Only debts incurred to buy goods or services for use by you, your family, or in your house.

Second, there must be a "debt collector" involved. Under the FDCPA, "debt collector" is a term of art that means a business that collects the debts of another. This means that the original lender or creditor is not covered by the FDCPA. So if you had a Capital One credit card and the Capital One collection department is calling you, they are not required to follow the FDCPA. But if ABC collection agency is collecting on behalf of Capital One, the FDCPA applies to them. Law firms are also covered by the FDCPA if they regularly collect consumer debts. So the FDCPA definitely applies to a collection law firm, but probably doesn't apply to a law firm that only occasionally handles consumer collection cases.

Of course, even if your situation involves a consumer debt and a debt collector, there must still be a violation of the FDCPA.

You can sue for wrongful garnishment

The Fair Debt Collection Practices Act forbids debt collectors from taking action that they cannot legally take. This includes situations where a debt collector illegally garnishes a bank account or paycheck. I have seen a number of wrongful garnishment situations over the years. Here are a couple of the common scenarios.

Improper pre-judgment garnishment

Under Minnesota law, a collector can garnish a person's bank account or paycheck without first obtaining a court judgment. To do so, the collector first has to serve the person with a collection lawsuit. If the defendant does not answer the lawsuit within 20 days, the collector then has to send the defendant a Notice of Intent to Garnish. If the person doesn't respond to the Notice of Intent to Garnish within another 25 days, then the debt collector may start a garnishment. No court permission or oversight is required.

Debt collectors occasionally foul up this process. I've seen cases where they do a pre-judgment garnishment even though the defendant has answered the lawsuit. I've also seen cases where they garnish without sending the Notice of Intent to Garnish. In both situations, they haven't followed the pre-judgment garnishment requirements they've probably done a wrongful garnishment and violated the FDCPA.

Court judgment was vacated

Although pre-judgment garnishment is allowed in Minnesota, most garnishments happen after a court judgment has been entered. What if the court judgment is vacated, though? If the collection judgment is wiped out, then the collector's power to conduct a garnishment is wiped out. If the collector garnishes the consumer after the judgment is vacated, it almost certainly will be a wrongful garnishment and a violation of the FDCPA.

Debt was settled

A similar type of wrongful garnishment happens when the consumer negotiates a settlement or payment plan and the collector garnishes them anyways. Many settlement agreements state that as long as the consumer follows through on the settlement, no further collection action will be taken. So as long as the person honors the settlement agreement, any further garnishment will probably violate the FDCPA. You have to be careful with this, though, because occasionally collectors won't give up their right to garnish by agreeing to a settlement.

Wrongful garnishment of exempt funds

Another possible type of wrongful garnishment is when the collector knowingly garnishes exempt money in a bank account. Minnesota law protects--or exempts--certain forms of money from garnishment. Common exemptions include social security payments, disability payments, and many other forms of government assistance granted based on financial need. But just because a debt collector garnishes a bank account that contains exempt funds, doesn't mean that they've done anything illegal. You will probably have to show that the collector knew that the bank account only contained exempt funds before they did the garnishment.

There may be other illegal garnishments that don't fall into any of these categories. If you believe a collector has wrongfully garnished you, consider talking to an attorney who is knowledgeable in garnishments and the FDCPA.

Debt collectors cannot violate one part of the FDCPA in an attempt to comply with another

The Fair Debt Collection Practices Act (FDCPA) requires that every voice message left by a debt collector tell you that the communication is from a debt collector. The FDCPA also prohibits debt collectors from telling third parties that you owe a debt. This can create a problem for debt collectors that leave voice messages. On the one hand, the debt collector must disclose that the communication is from a debt collector in the message. But on the other hand, disclosing that the communication is from a debt collector may violate the FDCPA's prohibition of telling third parties about a debt. Debt collectors often whine about this conundrum.

The recent case of Edwards v. Niagra Credit Solutions, Inc. involved this exact scenario. The debt collector, apparently as a policy, did not disclose that the call was from a debt collector in voice messages. When it was sued under the FDCPA, the debt collector complained that if it left the required notice, it risked violating the part of the FDCPA that prohibits disclosing that a consumer owes a debt to a third party. The judge brushed aside the debt collector's complaint of being in an impossible position by pointing out that the FDCPA "does not guarantee a debt collector the right to leave answering machine messages" and held that it is not legal to violate one part of the FDCPA in an attempt to comply with another part.

What to do if you're abused or harassed by a debt collector

The percentage of delinquent accounts has reached record highs in the current economic climate. Unfortunately, that means that the volume of collection calls and letters has increased as well. With consumers strapped for cash, some debt collectors will inevitably resort to harassing, abusing and misleading consumers in an attempt to obtain payments. This post details many common violations of the Fair Debt Collection Practices Act committed by debt collectors. What can you do if you are have been harassed or abused by a debt collector in violation of the FDCPA?

First, save all voice messages left by debt collectors. Next, you should take detailed notes of every conversation you have with a debt collector. These notes don't have to be fancy. Just use a pen and paper and make note of everything that was said during the conversation. Then, sign and date each note and save them. Third, save all copies of letters and other correspondence from debt collectors. Finally, if you believe that the debt collector's conduct has violated the FDCPA, consider discussing your case with a consumer lawyer. You have a right to sue debt collectors that violated the FDCPA and receive money damages.

Stop debt collection harassment without filing bankruptcy

Here are three ways to stop harassing phone calls and letters from debt collectors:

Write a cease and desist letter

Under the Fair Debt Collection Practices Act (FDCPA) a debt collector must stop contacting you if you write them a letter telling them to do so. Reference the FDCPA in your letter and state that you request that the collector cease all communications with you. Send the letter via certified mail and keep a copy of the letter and mail receipts for your records. This is the easiest way to stop the harassing telephone calls. But in my experience, a cease letter usually just causes the debt collector to either sell or transfer the debt to a different debt collector. Unfortunately, you must now write another cease and desist letter to the new debt collector. Its not unusual for debts to bounce around multiple times, so you might end up writing multiple letters.

Hire an attorney

The FDCPA prohibits a debt collector from communicating with you if they know you are represented by an attorney. Concerned that you can't afford an attorney? While an attorney does cost money, some consumer attorneys will write a cease and desist letter, handle any incoming collection calls, and negotiate a resolution of your debt for a small fee.  This will relieve you of the burden of having to deal with harassing phone calls and letters and let you focus on the more important things in your life.

Sue the debt collector under the FDCPA

If a debt collector violates the FDCPA, you have the right to sue the debt collector and recover damages. You are entitled to $1,000 in statutory damages, actual damages, and attorneys fees. Most consumer lawyers will accept a FDCPA case on a contingency fee arrangement. This usually means you will not have to pay any attorney fees unless your case is successful. Some of the more common debt collection practices prohibited by the FDCPA are:

  • informing third parties that you owe a debt;

  • contacting you at inconvenient times or contacting you at work after you’ve told the debt collector not to;

  • threatening you with violence;

  • using abusive or profane language;

  • threatening to take legal action when the debt collector has no intent to do so;

  • falsely implying that you committed a crime by not paying the debt.

Tips for dealing with debt collectors

Don't tell a debt collector where you bank or work.

This information is very valuable to a debt collector because bank and wage garnishments are easy and cheap ways to collect debts. Never voluntarily give this information to a debt collector. A favorite trick debt collectors will use to get you to tell them this information is to say "I already know you bank at ABC Bank." Surprisingly, many people will reply "No I don't. I bank at XYZ Bank." Don't fall for this trick.

Keep accurate records of all communications with debt collectors.

If you talk to a debt collector on the phone, immediately after hanging up, write down everything that was said during the conversation in as much detail as possible. Sign and date these notes. If a debt collector violates the FDCPA, your notes can be used as evidence of the violation. Similarly, be sure to keep every letter sent to you by a debt collector, including its envelope.

Demand that the debt collector confirm any agreement in writing.

If you agree to a payment plan or settlement with a debt collector, before sending any money, demand that the debt collector confirm your agreement in writing. It's not unheard of for debt collectors to try to back out of payment agreements. Also, if a debt collector gives you an extension of time to make a payment or to respond to something, make sure they confirm that agreement in writing.

Avoid long, open-ended payment plans.

Debt collectors will usually agree to monthly payment arrangements on the full balance, plus accrued interest. If possible, avoid this type of payment plan. With the high interest charged by most credit card companies, you will be paying the debt back forever. If possible, negotiate a fixed amount and term. This way you know exactly how much you'll be paying and for how long.

If you are sued, talk to a consumer lawyer immediately.

A debt collection lawsuit is serious business. Unless you are well-versed in the rules of civil procedure and have a good understanding of the deadlines involved in litigation, you should strongly consider getting advice from a consumer lawyer. I've seen many cases where consumers chose to represent themselves, had strong defenses, but ultimately lost because they failed to follow a court rule or meet a deadline.

How the FDCPA protects consumers against debt collectors

The Fair Debt Collection Practices Act (FDCPA) is a federal law that prohibits certain conduct by debt collectors. Its important to understand that the FDCPA only applies to communications with "debt collectors" (ie. not the original creditor collecting its own debt) and to "consumer debts" (ie. not business debts). Under the FDCPA, a debt collector is forbidden from doing any of the following:

  • Communicate with you at inconvenient times or places. Inconvenient times are generally considered to before 8:00 a.m. and after 9:00 p.m., local time where the consumer is located

  • Contact you directly if the debt collector knows you are represented by an attorney

  • Communicate with you at work if you tell the debt collector not to call you there, or if the debt collector knows that you cannot receive calls at work

  • Contact third parties and inform them you owe a debt

  • Communicate with you after you've requested that the debt collector stop calling you

  • Engage in conduct that is harassing, oppressive, or abusive to you

  • Threaten you with violence or other criminal behavior

  • Use obscene, profane, or abusive language

  • Use false, deceptive, or misleading representations or collection methods

  • Threaten to take legal action if there is no intention or authority to do so

  • Falsely imply an affiliation with a government

  • Falsely represent the amount, character, or legal status of a debt

  • Falsely imply that the debt collector is an attorney

  • Imply that non-payment will result in arrest or imprisonment

  • Collect any amount that is not legally owing

This is not an exhaustive list, and there may be exceptions to some of the general prohibitions.