General Rule: Yes, you can file a lawsuit under the Fair Debt Collection Practices Act (FDCPA).
The debt collection process typically follows a particular order of events. It usually starts with initial contact from the collection agency followed by a formal notice of your debt. During this process, a collection agency must follow the requirements of the Fair Debt Collection Practices Act (FDCPA).
However, a debt collector may contact you about a debt you do not owe. You have asked them to stop contacting you, but they continue to reach out to you about this debt. If this continues, you have options to stop them.
In the following sections, you will learn how to identify wrongful debt collection. In addition, this article will detail when you should file a lawsuit or take other action against a collection agency.
I Do Not Recognize This Debt
Are you getting a call from a collection agency about a debt that is not yours? Or does the debt sound familiar but not the amount? This sometimes happens during the debt collection process. Why does this occur? Some reasons include:
- The debt collector has incorrect contact information. This sometimes happens if the person moves or you have a person’s old number.
- They are trying to coerce you into paying the debt of someone you know.
- The debt is yours but they added additional interest and fees that were not a part of the original agreement.
- It is a scam trying to obtain personal information or fraudulent payments.
If the debt is not yours, the first thing you will want to do is dispute the debt. While they may discuss your debt over the phone, a collection agency must also send you a validation notice. This notice will contain detailed information about your debt.
The FDCPA requires you to dispute a debt within 30 days of receiving this validation notice from the debt collector.
Note: Wrongful debt collection is illegal under the FDCPA for third-party debt collectors. This specific law does not apply to the original creditor.
Other Wrongful Debt Collection Protections Under the FDCPA
Broadly speaking, the FDCPA provides many protections against wrongful debt collection. This includes anything from how they contact you to the information they provide. The FDCPA protects against the following general tactics:
- Harassment. This can include a wide range of actions, including repeated calls, offensive language and calling at odd hours.
- Deception. This may include misrepresenting themselves as an attorney or government agency. It may also include misleading statements about your debt and the amount you owe.
- Embarrassment. For example, they may tell others about your debt or publicize it on a list of debtors.
Are There Any Remedies For This Type of Behavior?
If a debt collector illegally attempts to collect a debt, you have the right to sue them. When you file a lawsuit you can ask the court to put an end to the illegal behavior. The court does this by issuing injunctive relief. You can also demand the collection agency pay you the following under the FDCPA:
- Statutory Damages. This is automatically enforced if a collection agency is guilty of a violation. The FDCPA can penalize a collection agency up to $1,000.
- Actual Damages. This will compensate you for any loss or damages you suffer as a result of the illegal debt collection behavior.
- Court Costs. This may include filing costs and attorney fees.
Before you file a lawsuit, consider the following additional options:
- Formal Demand. You can send a formal demand to the collection agency in writing to stop the illegal behavior. In this letter, you can also warn that you may file a lawsuit if the illegal conduct continues.
- Demand an End to All Communication. You can do this by sending the collection agency a cease-and-desist letter. A collection agency must end all communication once in receipt of this letter.
- Seek Federal Government Assistance. The Federal Trade Commission (FTC) enforces the FDCPA. You can submit a complaint to this agency about the wrongful debt collection. You can also submit a complaint to the Consumer Financial Protection Bureau (CFPB).
- Consider a Debt Settlement. A collection agency does not want to deal with a lawsuit if it’s clear they violated the law. As a result, they may be willing to negotiate a favorable settlement of your debt.
Conclusion
A collection agency has the responsibility of ensuring they are collecting the debt from the right person for the right amount. If they fail to do this, you have the right to sue them and take other reasonable action.
If a collection agency is wrongfully trying to collect a debt from you, put a stop to it immediately. Hiring a consumer rights attorney is a great way to make sure this illegal behavior is swiftly resolved.
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