In 1977, United States Congress enacted the Fair Debt Collection Practices Act (FDCPA). The FDCPA protects consumers from harassment or abuse from debt collectors attempting to collect debt on behalf of another business or entity. It is currently enforced by the Federal Trade Commission.
The FDCPA guards consumers from third-party harassment from personal, credit, and medical debts. It also covers loans, such as car payments or home mortgages. The FDCPA will not protect consumers from debts incurred from running a personal business. The FDCPA will not cover any harassment from original creditors. Banks that finance consumers’ loans are not obligated to obey the FDCPA’s harassment policies.
There are numerous examples of FDCPA violations, but some of the most common ways debt collectors illegally harass consumers is by calling before 8:00 a.m. or after 9:00 p.m., calling repeatedly to annoy the consumer, or not ceasing to call after the consumer explicitly tells the debt collector to stop communication in a cease and desist letter. Under the FDCPA, a third-party debt collector also cannot contact a consumer at work, or contact anyone related to the consumer other than a spouse, such as an employer or neighbor. Additionally, a debt collector cannot add additional costs to the debt owed by the consumer, such as an interest or collection fee.
If a debt collector violates the FDCPA, a consumer has the right to sue the debt collector for damages. If a judge finds a debt collector guilty of violating the FDCPA, he or she will need to pay the claimant up to $1,000, even if no actual damages incurred from the harassment. If the consumer can prove that he or she suffered from the unfair practices, the amount of damages awarded greatly increases. Some examples of damages that can occur due to FDCPA violations include lost wages at work, medical bills, or a decrease in general well-being. Debt collectors are liable for compensation up to $500,000 when a consumer can prove that he or she suffered due to the actions of the collector. An attorney can be extremely beneficial when pursuing debt harassment claims.
If a consumer wins a debt collection lawsuit and proves that the FDCPA was violated, he or she will not be cleared of the original debt owed. All payments must still be made to the original creditor.