Consumers who feel that they are being mistreated and harassed by collection companies should research the Fair Debt Collection Practices Act (FDCPA), as there may be a right to collect compensation (called damages). FDCPA was founded in 1977, originally as an act of Congress as an amendment to the Consumer Credit Protection Act. Currently, it protects consumers against collection agencies that abuse and violate the rights of consumers.
The FDCPA states what collection companies are and are not allowed to do. A collection agency cannot, among other things, issue threats or use profanity, contact a client outside of designated times or contact other parties about the debt. They must be honest at all times, send a notice in the mail about the debt, respect privacy and follow the law.
Under the FDCPA, there is limited opportunities to receive punitive damages. Punitive damages are defined as damages that are meant to punish the defendant (the collector). These damages could possibly serve to warn other collectors in making an example of the offending collector. Usually these are awarded when a court finds the collector’s actions to be exceedingly malicious or offensive.
In an individual lawsuit, a consumer can receive damages of up to $1,000 in an individual claim. In a class lawsuit, each named plaintiff can receive up to $1,000. An additional award can be divided up among the plaintiffs. It can be $500,000 or 1 percent of the net worth of the debt collector, whichever is less.
A few methods are available to consumers that wish to file a claim against a collection agency that they feel are in violation of FDCPA. The best, and most recommended method is to file a claim in a state court. There are a wide range of attorneys who can help you to do this. A consumer can find them by conducting an internet search of collection attorneys or asking your state’s bar association.
In a state court, a consumer will be able to show the court any and all case materials that they may have. Also, the highest amount of damages are collectible in state court. The other options available are to file in small claims court, with the state attorney general, or with the FTC. Consumers typically have up to one year from the date of the incident to file a claim.