Although most of the legal scrutiny of the debt collection industry focuses on preventing overly aggressive debt collection tactics, a landmark federal consumer protection law also includes a provision that prohibits the longstanding practice of debt collection agencies making false statements regarding consumer debts. Passed by the United States Congress on September 20, 1977, the Fair Debt Collection Practices Act (FDCPA) makes it illegal for third party debt collectors to use deceptive techniques when trying to collect outstanding credit card and personal loan accounts. The FDCPA also gives consumers the right to seek monetary damages for suffering from one of more violations of the consumer protection law.
Defining False Statements under the FDCPA
The false statements provisions of the FDCPA covers a long list of deceptive debt collection practices. A bill collector such as Central Research, Inc. cannot make a false statement by threatening to arrest you for falling behind on your bills. Some companies use the threat of arrest as an intimidating debt collection technique that motivates consumers to take action on delinquent credit card and personal loan balances. However, the United States does not have, nor will it ever have, a system of debtor prisons.
Another example of a false statement is far more indirect than the threat to have you arrested. It involves providing the three major credit reporting bureaus with false consumer credit information. A debt collection agency like Central Research, Inc. might tell Equifax that it has officially closed your credit account, when in fact the account remains open. Experian might receive a latter from a third party debt collector that you are headed towards filing for bankruptcy. Only you and a licensed bankruptcy attorney can file a formal statement requesting financial relief via bankruptcy.
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What You Can Do If Central Research, Inc. Makes False Statements
Although the FDCPA does not address cause and effect, several recent court rulings have added a stipulation to the false statements provision of the FDCPA. You and your FDCPA lawyer not only have to present enough evidence proving a bill collector made false statements; you and your lawyer also have to link the false statements to your inability to make proper financial decisions. The United States Court of Appeals for the Eighth Circuit stated the new stipulation requires you to show a “material” affect one or more false statements had on your personal financial decision process.
Are You Eligible for Monetary Damages?
If you cannot show a “material” connection between the false statements made by a debt collection agency and your personal finances, this does not mean you cannot recover monetary damages. The FDCPA grants you the right to request statutory damages for every violation committed by the same third party debt collector. With a maximum award of $1,000, statutory damages represent the most likely way a circuit court judge will rule favorably in your case. Nonetheless, the FDCPA also permits consumers to file claims seeking actual damages for the cost of the pain and suffering caused by physical and/or emotional distress symptoms.
Schedule a free initial consultation with an experienced consumer protection attorney today to learn more about how the FDCPA protects you against the deceptive debt collection tactic of making false statements.
Additional Resources
*Disclaimer: The content of this article serves only to provide information and should not be construed as legal advice. If you file a claim against Central Research, Inc., or any other third-party collection agency, you may not be entitled to compensation.