You may be able to Sue your Creditor for being too Aggressive in Collecting its Debt
As of March 2018, the United States Federal Reserve shows that there is over $3.8 trillion of consumer credit outstanding!
Although failing to pay your Visa® bill (regardless of how much) will have virtually no impact on whether Visa® survives as a company, I think we can all agree that there is a TON of debt out there, and debt collectors will do nearly anything to get it.
The Fair Debt Collections Practices Act (FDCPA) was created by the United States Congress to combat the “abundant evidence of abuse, deception and unfair debt collection practices by many debt collectors.” Congress found that abusive debt collectors contribute to the number of individual bankruptcies, divorce, loss of jobs and invasions of privacy. Further, Congress believes that the laws that existed prior to the FDCPA were inadequate to protect consumers, who deserved a private right of action to “police” these debt collection bullies. Accordingly, the purpose of the FDCPA is to “eliminate abusive debt collection practices by debt collectors, to ensure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent state action to protect consumers against debt collection abuses.”
It is important to note two things about the FDCPA: (1) it applies only to consumer debts, so if you’re being harassed by a bank for that business loan you took out, then the FDCPA will not protect you. (2) it applies only to the debt collection company, and not the lender itself, so if you’re being chased by Visa® for a debt owed to Visa® then the FDCPA will not protect you.
Although creditors have a “bona fide” error defense for innocent mistakes, in most cases, the debt collector faces strict liability. In one case I handled, the debt collector was found liable for failing to provide a statement with their collection letter describing the borrower’s rights under the FDCPA.
Although not an exhaustive list, the following constitute harassment such that the creditor may face liability under the FDCPA:
- Confirm anything other than the location of the debtor if talking to anyone other than the consumer.
- Communicating with the consumer if he is represented by an attorney.
- Communicating with the consumer before 8 AM or after 9 PM local time.
- Communicating with the consumer at work if the employer prohibits personal calls at the office.
- Using or threatening violence.
- Using obscene or profane language.
- Calling repeatedly or continuously with the intent to annoy, abuse or harass.
- Giving the false representation that the debt collector is affiliated with the United States, including the use of a badge or uniform.
- The false representation of the character, amount or legal status of any debt.
- Falsely representing that any communication is from an attorney.
- Falsely representing that failing to pay the debt will result in the consumer’s arrest or imprisonment.
- False documents intended to appear to be legal process.
- The false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.
Note that I just listed the highlights, the most common violations, rather than the complete list from the statute. If you feel like you’re being bullied by a debt collector, please seek competent legal advice to determine if you have a cause of action against the debt collector for being too aggressive in their attempts to collect the debt (or the alleged debt) that you owe.
One last thing about the FDCPA; although the debt collector faces strict liability, that liability is capped at $1,000.00 – not $1,000 per violation, but $1,000 total – plus any actual damages that can be proven, plus attorney’s fees and court costs. Accordingly, when appropriate the FDCPA is paired with other causes of action to increase the damage award to the debtor in the event she prevails.
In the event you’re being harassed by the owner of the debt themselves, Florida has a companion consumer protection law called the Florida Consumer Collection Practices Act (“FCCPA”).
Like the FDCPA, the FCCPA prohibits:
- Simulating a law enforcement officer or a representative of any governmental agency.
- Using or threatening force or violence.
- Communicating or threatening to communicate with a debtor’s employer before obtaining final judgment against the debtor.
- Disclosing to a person other than the debtor or her or his family information affecting the debtor’s reputation.
- Disclosing information concerning the existence of a debt known to be reasonably disputed by the debtor without disclosing that fact.
- Willfully communicating with the debtor or any member of her or his family with such frequency as can reasonably be expected to harass the debtor or her or his family, or willfully engaging in other conduct which can reasonably be expected to abuse or harass the debtor or any member of her or his family.
- Using profane, obscene, vulgar, or willfully abusive language.
- Claiming, attempting, or threatening to enforce a debt when such person knows that the debt is not legitimate.
- Using a communication that simulates in any manner legal or judicial process or that gives the appearance of being authorized, issued, or approved by a government, governmental agency, or attorney at law, when it is not.
- Communicating with a debtor under the guise of an attorney by using the stationery of an attorney or forms or instruments that only attorneys are authorized to prepare.
- Advertise or threaten to advertise for sale any debt to enforce payment.
- Publishing, posting, or threatening to publish or post before the public individual names or any list of names of debtors, commonly known as a deadbeat list.
- Refusing to provide adequate identification of herself or himself or her or his employer or other entity whom she or he represents if requested to do so by a debtor from whom she or he is collecting or attempting to collect a consumer debt.
- Mailing any communication to a debtor in an envelope or postcard with words typed, written, or printed on the outside of the envelope or postcard calculated to embarrass the debtor. An example of this would be an envelope addressed to “Deadbeat, Jane Doe” or “Deadbeat, John Doe.”
- Communicating with the debtor between the hours of 9 p.m. and 8 a.m. in the debtor’s time zone without the prior consent of the debtor.
- Communicating with a consumer if the person knows that the debtor is represented by an attorney with respect to such debt.
Just like the damages allowed by the FDCPA, the FCCPA will only allow $1,000 for the violation, regardless of how many violations, plus actual damages, attorney’s fees and court costs.
What are “actual damages?” The best example I’ve heard (but never had the opportunity to raise in one of my cases) was a gentleman who, after being harassed repeatedly by telephone calls had a heart attack and was rushed to the hospital. The ambulance ride, emergency room bills, and doctor bills were all actual damages that were compensated by the creditor when sued under the FDCPA & FCCPA.
Recently, I used these two laws to the benefit of one of my clients. My client turned in a jet-ski to the creditor, who sold it at auction to pay the debt and then sued my client for the balance of the money owed. There were two problems: (1) the creditor never gave my client credit for the value of the jet ski received at auction (misrepresenting the amount of the debt owed) and, (2) the creditor was charging my client 24.99% interest instead of the contractual 22.99% interest (collecting money to which they were not entitled because of the exaggerated interest rate). I first tried negotiating with the creditor, which was politely refused. I then filed my answer and affirmative defenses, which were ignored. Finally, to get the creditor’s attention, I filed a counter-claim in their collection lawsuit raising both the FDCPA and FCCPA claims. Shortly thereafter I was contacted by the creditor who asked if we could each drop our respective lawsuits! Poof! Approximately $21,000 of alleged debt owed was eliminated because the creditor was too aggressive in attempting to collect it from my client!
With the advent of cellular telephones, Congress needed a mechanism to restrict or reduce the number of “robo-calls,” especially in the early days of cell phone usage, when minute plans were the norm and most people paid to use their devices.
In 1991, Congress enacted the Telephone Consumer Protection Act (“TCPA”). The TCPA protects consumers who receive automated telemarketing calls, unsolicited faxes, or pre-recorded or automated calls to their cell phones.
Like the FDCPA and FCCPA, the TCPA creates a private cause of action to allow consumers to police overly-abusive debt collectors who use automated systems to call your cell phone. Different from the FDCPA and FCCPA there is no attorney fee or cost provision (meaning you must pay your own attorney’s fees and court costs) but the TCPA has teeth that its two cousins fail to have – the violations range from $500 to $1,500 per phone call!
My best success story with the TCPA is from 2012. The creditor made unsolicited, automated calls to my client before we got involved in the case. My firm sent a letter to the creditor asking them to stop calling our client and to deal with us directly. The client got nearly a hundred and seventy-five more calls even after the creditor received our letter. We settled with the creditor for $75,000: $25,000 of that paid off the debt owed to the creditor, and we split the remaining $50,000 with our client to cover attorney fees and court costs. When I first started to promote the TCPA as a consumer protection statute, I had clients change their ring tones to something to do with money and associate it to the creditor who was harassing them. Cha-ching!
How do you prove that the debt collector or creditor is being abusive? How do you prove that the calls are too frequent, before 8:00 AM or after 9:00 PM? I like to use a “Call Log.” I ask my clients to keep a pad of paper near the phone and draw lines to create 5 columns. Then, every time they get a call write down: (1) the date, (2) the time, (3) the number, (4) the name of the person calling, and (5) the company they’re calling from. Other clients have created narrative-format notes about what was discussed. Other clients have taken screenshots of their incoming and missed calls on their cell phone. Doing this at the time the call is received is great evidence to show a judge or jury when making your case against the abusive debt collector or harassing creditor.
For more information on Consumer Collection Laws, Creditor Harassment Laws, FDCPA, FCCPA or TCPA, please contact us to schedule a free initial consultation to discuss your options at 727-261-0224 or email me directly at email@example.com. Please also subscribe to the Crushing Debt Podcast, on Apple Podcasts, Spotify, and other podcast players, including Amazon Echo (“Alexa”) for more free information about these topics.
Shawn M. Yesner, Esq., is the host of the Crushing Debt Podcast and founder of Yesner Law, P.L., a Tampa-based boutique real estate and consumer law firm that helps clients eliminate the financial bullies in their lives. We assist clients with asset protection, the sale and purchase of real property, Chapter 7 liquidation, Chapter 13 reorganization, bankruptcy, foreclosure defense, debt settlement, landlord/tenant issues, short sales, and loan modifications in Tampa, Westchase, Odessa, Oldsmar, Palm Harbor, Clearwater, Pinellas Park, Largo, St. Petersburg, and throughout the greater Tampa Bay area.