The Fair Debt Collection Practices Act (FDCPA) as been around for almost 35 years. The FDCPA is a federal law that applies to every state, including Massachusetts, Maryland and Rhode Island. In other words, everyone is protected by the FDCPA. The FDCPA is essentially a laundry list of what debt collects can and cannot do while collecting a debt, as well as things debt collectors must do while collecting a debt.
- Damages: if a collection agency violates any section of the FDCPA, the consumer is entitled to damages up to $1,000.00. Additional damages are warranted in cases where the collector’s collection activities were so egregious the consumer suffered emotional distress. 99% of cases do not involve emotional distress damages.
- Attorney’s fees: The FDCPA has a fee-shift provision. This means, the collection agency pays the consumer’s attorney’s fees and costs.
- Debt that is covered by the FDCPA: only consumer debt, such as personal, family, and household debts. For example, money you owe on a personal credit card, an auto loan, a medical bill, or a utility bill. The FDCPA does not cover debts you incurred to run a business, or debts regarding unpaid taxes, or traffic tickets.
- The FDCPA only applies to 3rd-party debt collectors: the FDCPA defines a debt collector as any person who regularly collects, or attempts to collect, consumer debts for another person or institution. In short, only third-party debt collectors are bound by the FDCPA. That is, original creditors, such as credit card companies and banks are not bound by the FDCPA.
Most consumers harassed by debt collectors probably think it’s impractical to hire a lawyer to fight a collection agency. If a consumer cannot afford to pay their bills, then how would a consumer have money to hire a lawyer to fight a collection agency. However, consumers harassed by debt collectors do not have to pay attorney’s fees and costs. The collection agency pays your attorney’s fees and costs. A debt collector who fails to comply with any provision of the FDCPA is liable for any actual damages sustained, punitive damages, and statutory damages up to $1,000.00. The FDCPA has a fee-shift provision. This means, the collection agency pays the consumer’s attorney’s fees and costs.