Fair Debt Collection Practices Act (FDCPA) Violations

Wed, Jan 30, 2013

Bankruptcy, Debt Mitigation

 Some rights reserved by Sam HowzitDebt collectors CANNOT use every trick under the sun to collect debts, contrary to how it may feel when they call you. Debt collectors must rein in their debt collection tactics due to the Fair Debt Collection Practices Act or FDCPA. Therefore, some debt collectors might truly be breaking the law when they use certain ways of collecting debt.

Christopher D. Smith with SmithLaw Attorneys of Lakewood Ranch, Florida has handled many bankruptcy and debt mitigation cases. He has heard about every trick in the book that debt collectors use. Moreover, some that he has heard about are not legal under the Fair Debt Collection Practices Act.

Illegal tactics that some debt collectors use to collect debts include:

  • Repeatedly calling and harassing debtors. Yes, repeated calling with intent to harass or annoy is unacceptable.
  • Using profane or abusive language during calls.
  • Calling at inconvenient times like before eight in the morning or continuing to call at work after they have been informed you are at work.
  • Continuing to call after the consumer has advised they do not wish to speak further with them. Certain statements can still be spoken or written, but continued calling about the debt in general should stop.

 Illegal practices that the FDCPA prohibits that might occur during debt collecting include:

  • False misrepresentation. This can be false misrepresentation about the amount of debt, fees, the caller, etc. This is illegal under the Fair Debt Collection Practices Act. Especially mentioned in the act is when a debt collector might impersonate an attorney. This is not just verbal misrepresentation either; it can also be paperwork or forms that are not properly presented.
  • Threatening to take or obtain property or money that is not related to the specific debt being collected.
  • Failing to follow certain paperwork requirements.

The FDCPA is a broad law. This blog post is not meant to be a full discussion of the law–a more complete write-up can be found on the Federal Trade Commission’s website.

The Fair Debt Collection Practices Act can be applied to many types of debt. One particularly interesting Florida case involving this act is Birster v. American Home Mortgage Servicing, Inc., No. 11-13574, 2012 WL 2913786 (11th Cir. July 18, 2012). This case involves consumers who had ceased to make payments on their mortgage. They were then repeatedly contacted by their mortgage servicing company (in this case, American Home Mortgage Servicing, Inc.) to make those payments. (A mortgage servicing company handles the day-to-day issues involving a mortgage. Many banks hire these companies to handle their loans, and pay the mortgage service companies a small amount of the loan’s interest payment.) Some of these calls were allegedly threatening and harassing. The Birsters also allege that the mortgage servicer continued to call after they knew counsel represented the Birsters and after they had asked them to stop. The Birsters and their attorneys cited the Fair Debt Collection Practices Act as a reason that their lender’s harassment was a problem.

At first, the courts denied their claim. The court decided that the company was only protecting their interest in the debt, not truly collecting the debt. However, once the case hit appeal, the appellate court found this case did fall under the FDCPA’s jurisdiction. The appellate court’s decision found, in brief, that the loan servicer was protecting a security interest in the debt, but also collecting a debt at the same time. The court found it was clear that Home Mortgage Servicing was trying to collect a debt, since they were sending debt collection notices that specifically said they were collecting a debt. (This case was affected also by the decision in Reese v. Ellis, Painter, Ratterree, & Adams, LLP and Hasbun v. Recontrust Co., N.A.)

Image: Some rights reserved by Sam Howzit

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