protecting consumers from abusive debt collectors" width="265" height="265" />protecting consumers from abusive debt collectors" width="265" height="265" />
The Fair Debt Collection Practices Act (FDCPA) is a powerful law that helps protect consumers, including Alabama consumers, from abusive and harassing debt collectors.
In this article we’ll take a dive into the following:
Note: This article will not have specific case references but we will reference the actual text of the FDCPA statute which is 15 U.S.C. Section 1692. You can find the code sections here at the Legal Information Institute. And each time we reference a section it will be linked to a YouTube video (from our channel) that discusses the actual language of the statute.
Why do we even need this law?
Section 1692 tells us right at the beginning of the law:
There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.
Really bad things happen to consumers when debt collectors act in an abusive manner.
And state laws are not enough to stop this (1692(b)) — this is certainly true in Alabama where we have little in the way of state laws to help stop abusive debt collectors.
Section 1692(c) answers the argument that every abusive debt collector makes. They argue, there is no other way to collect debts except by being deceptive and abusive. This law flat out says, “Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts.”
Section 1692(e) tells us that the debt collectors that follow the law will be at a competitive disadvantage. Why? Because there are abusive collectors breaking the law — that gives an unfair advantage over the honorable debt collectors.
I once mentioned to a jury in closing argument that the honorable law-abiding debt collectors are like a football team that has 11 players and follows the rules. But the cheating — abusive debt collectors are like a football team with 13 players who break the rules. It is not fair and the way to stop this is to punish the cheaters so they will play by the rules.
Here is the text of 1692(e):
It is the purpose of this subchapter to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.
Section 1692a(6) has this definition (leaving out some exceptions):
The term “debt collector” means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.
First, their primary purpose or function is to collect debts . This would be a debt buyer who buys debt in order to collect on it.
Second, they collect debts owed to other companies — this would be like a traditional collection agency.
Basically, the debt has to be in default when it is received by the company that the consumer claims is a debt collector. This would exclude the original creditor.
Note: this can become complicated with various exceptions but the above is a good starting point.
Section 1692a(3) defines a consumer as “The term ‘consumer’ means any natural person obligated or allegedly obligated to pay any debt.”
A natural person is a human being.
The next part is critical — “obligated or allegedly obligated” to pay a debt.
So if you actually owe the debt, then you are a consumer.
But what if you do NOT owe the debt and the debt collector says you owe it? Then you are a consumer.
Here’s another way to look at it.
If you owe the debt, then it doesn’t matter what the collector thinks about you. You are a consumer under the FDCPA.
And if the debt collector thinks you owe the debt, then it does not matter whether you do or do not owe the debt. You are a consumer protected by the FDCPA.
The term “debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment
The key is the “personal, family, or household” purposes. Here are some examples:
An easier way to look at it is what is not covered?
Business-related expenses. So most likely spending money on a business trip will not be considered a “debt” under the FDCPA. A house bought for investment purposes will not qualify.
Just think, “Is this for business/work or is it not?”
Business — most likely not covered.
Non-business — most likely covered by the FDCPA.
The FDCPA prohibits debt collectors from collecting debts in an abusive/harassing manner. In a deceptive manner. Or in an unfair manner.
Section 1692c forbids certain types of contact — when the collector knows it is inconvenient (think shift worker sleeping in day), to a represented consumer (collector should contact the lawyer), or after a cease & desist letter.
Section 1692d focuses on harassing/abusive conduct. Here is the general rule as laid out by 1692d: “A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.”
Next, Section 1692e says to not be deceptive or misleading when collecting a debt. The general rule is: “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.”
Finally, Section 1692f talks about unfair conduct — “A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.”
Pretty common sense — be a good person — but abusive collection is so widespread that Congress had to put this in the law books to explain to collectors to act right.
A collector must send you, after the initial communication, a proper Section 1692g notice:
(1) the amount of the debt; (2) the name of the creditor to whom the debt is owed;(a) Notice of debt; contents Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
So basically the letter needs to tell you about the debt and about your rights to get more information or to dispute the debt.
(a) Venue Any debt collector who brings any legal action on a debt against any consumer shall—
(1) in the case of an action to enforce an interest in real property securing the consumer’s obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or
(A) in which such consumer signed the contract sued upon; or (B) in which such consumer resides at the commencement of the action.(2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity—
You can be sued in the county where you signed the debt or where you live. Now if this is a foreclosure, etc. involving real property, then naturally the suit is in the county where the property is located.
The reason for Section 1692i is to force the collector to be fair to you in the location of the lawsuit. It is unfair to sue you 300 miles away from where you lived or where the contract was signed. So if you signed a contract in Baldwin County, and you live in Mobile County, it is a violation of the FDCPA to sue you in Madison County.
Here are some typical examples of illegal credit reporting by collectors.
The simple rule is to look at any and all credit reporting by a debt collector. Is it true or false? Correct or incorrect? If it is false, then this will almost certainly be an FDCPA violation.
Collection calls often violate the law. Let’s look at some examples.
You get the idea — when it is abusive or lying or unfair — then it almost certainly violates the FDCPA.
Here are a few examples:
As with other examples, always look at the letter and see if it is true? Is it accurate? The letter harassing or unfair in any way?
You can be sued when you do not owe any money.
Or you are sued for more than the amount you supposedly owe.
The collector (debt buyer) can sue with no intention of proving its case but just trying to get a default judgment from you.
When you win your case, the debt buyer can be credit reporting even though you have proved you owe the debt collector nothing.
We also sometimes see debt buyers suing you in the wrong county. Under Section 1692i you can only be sued in the county where you signed the contract or you live. Often collectors will sue you in a different county to discourage you from responding to the lawsuit.
There are many ways the collectors and debt buyers dream up to violate the law — you simply examine each act and see if it was abusive/harassing, deceptive, or unfair.
A cease and desist letter is a letter telling the collector you are not willing to pay and/or to not contact you again.
If such notice from the consumer is made by mail, notification shall be complete upon receipt.(c) Ceasing communication If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except—
(1) to advise the consumer that the debt collector’s further efforts are being terminated;
(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or
(3)where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.
The advantage is the collector will no longer contact you about this debt (other than exceptions listed above). So if you don’t want to talk to the collector, the cease and desist letter can be helpful. And if the collector violates this you sue for money damages.
If you do send the cease and desist letter, do it by certified mail so you can prove the collector received it.
What do you do if the collector continues to contact you after a cease and desist letter? You sue under the FDCPA.
You get a number of benefits.
Second, you can recover statutory damages of up to $1,000 even if you were not harmed by the abusive debt collector.
Third, you can receive money damages for “compensatory” damages. These are to compensate you for any economic loss. This could be that you lost your job because of the collector) or you paid a higher interest rate because of false credit reporting, etc. And you can receive damages for emotional distress — mental anguish.
You have done the first step which is to learn about your rights.
Now you need to take action if you are dealing with an abusive debt collector.
Call us at 205-879-2447 and we will be happy to go over your options including suing the abusive debt collector under the FDCPA and under Alabama state law.
Talk to you soon!
Most financial problems result from some unexpected change in life — divorce, health issue, loss of job, or loss of a loved one. Missy lives in Alabama and she came to us as her father was really struggling with financial issues related to credit card companies after his wife passed away. Here’s what Missy had to say: I would highly recommend this attorney. He helped my father after the unexpected loss of my mother with some very difficult financial problems… (Read more)
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Watts & Herring, LLC
Alabama Consumer Protection Lawyers
301 19th Street North
Birmingham, Alabama 35203
Phone: (205) 879-2447
