The Fair Debt Collection Practices Act forbids a debt collector from making any false or misleading statements when they are attempting to collect a debt. If a debt collector lied to you, here’s what you need to know about your rights under the FDCPA.
The FDCPA applies to “debt collectors” collecting “consumer debts”
The FDCPA only covers a debt collector that is collecting a debt for someone else. It does not apply to a creditor collecting its own debts. So if the false statement was made by a bank or credit card company that is collecting its own debts, the FDCPA doesn’t apply. But the FDCPA does apply to collection agencies, debt buyers, and law firms who are collecting debts for someone else.
In addition, the FDCPA only applies when the debt being collected is a consumer debt. This is a debt used for personal, family, or household purposes. If the debt was incurred for a business, the FDCPA doesn’t apply.
Common debt collection lies
Although the FDCPA is clear that virtually any false statement is a violation, there are some collection lies and misleading statements that seem to happen frequently. These include:
*Telling you that you owe a debt that you already paid or that was discharged in bankruptcy
*Threatening to sue or garnish you after the statute of limitations has expired;
*Incorrectly reporting information on your credit report;
*Mis-stating your rights in student loan collections;
*Claiming that you personally owe a debt you have no obligation to pay, such as a debt for an ex-spouse or a deceased relative;
*Incorrectly stating the balance of your account (possibly because of unauthorized fees or uncredited payments);
*Suggesting that they are affiliated with an attorney when they are not;
The false statement probably has to be “material”
Although the FDCPA doesn’t say anything about it, many courts have adopted a rule that the false statement has to be “material.” This generally means that it’s not enough to show merely that the debt collector lied to you. You must also show that they lie impacted your ability to evaluate your options in some way. In my opinion, any statement about the balance of the account, the legal status of the account, your legal rights, or the collector’s legal remedies should be considered material.
If a debt collector lied to you, hold them accountable under the FDCPA
The FDCPA gives consumers the power to sue a debt collector that violates the law. It’s a great way to stop collection harassment cold and to hold the debt collector accountable for its illegal conduct. Under the FDCPA, a successful claim gets you:
* Up to $1,000 in statutory damages (even if you’ve suffered no monetary loss);
* Provable actual damages (including for emotional distress);
* Your attorney fees and court costs must be paid by the collector
Most consumer lawyers, including me, handle FDCPA lawsuits on a contingency fee. This means that you don’t pay us any fees unless I recover money for you and those fees come from the collector’s pocket, not yours. Congress wrote the FDCPA this way to incentivize people to enforce the FDCPA and help the government regulate debt collectors and ensure compliance with the law.
(photo: Joe Penniston)