What Are Illegal Debt Collection Practices?

November 19, 2018

In an earlier post, we discussed the rights granted to debtors under the Federal Debt Collection Practices Act, or FDCPA. As we learned, the Act covers most non-business consumer debts.  It applies to third-party debt collectors primarily engaged in the business of debt collection. Accordingly, it won’t stop your soon -to-be ex-brother-in-law from repeatedly call you at home or work looking for repayment. It might be possible to prevent your brother-in-law from engaging in this type of behavior under some other law.  You just can’t expect to use the FDCPA to do so. Still, it’s important that debtors know and understand their rights under the FDCPA.  That way, so harassment and unnecessary stress can be minimized. After all, getting caught up financially with past due obligations is tough enough.  The added stress from illegal debt collection harassment isn’t productive or helpful.  

In this post, we’ll look at a couple of examples of illegal FDCPA behavior. It’s important for debtors to understand their FDCPA rights.  It’s equally important that they be able to identify prohibited FDCPA behaviors. As we will explore in more detail below, violations of the FDCPA can lead to serious consequences.  Being aware of those consequences can help debtors manage undesirable debt collector behavior and their own stress.

One Example of  Illegal Debt Collection Practices

Let’s now look at several hypothetical scenarios in which a violation of the FDCPA takes place.  That way we’ll see what sort of behaviors are prohibited. Consider the first scenario.  A debtor wakes up around 6:30 a.m. on a weekday.  Their goal is to leave home for work just before 7 a.m. Just before leaving, though, our debtor gets a call from a third-party debt collector regarding an overdue credit card. Importantly, the collector has no express permission to contact the debtor at that hour. This is a clear violation of the timing rules of the FDCPA.

As discussed in our earlier FDCPA post, they pertain to the time window within which it’s permissible for debt collectors to call without express prior approval. That’s the key aspect of this hypothetical scenario.  The debt collector didn’t obtain prior approval before making contact with the debtor outside the permitted contact time period.  Significantly, such approval is required in order to comply with the FDCPA. 

Example Two

Consider the next hypothetical scenario.  A debtor is watching television at home, after work. It’s approximately 6 p.m., so a collector calling at that time is within the acceptable time window. The call is from a debt collector regarding an unpaid medical bill. The debtor informs the collector that they’re hoping to make a payment soon.  The collector, however, interrupts and states that he’s planning to sue unless there’s an immediate payment. Often, a debtor panics in this circumstance,.  Our debtor tells the collector okay, there’ll be a down payment within the next few days .  He does so to avoid the lawsuit. In reality, though, the debt collector had no intention of filing a lawsuit.  The threat of one was merely  a “scare tactic” to obtain a quicker payment.

Why is It a Violation?

The foregoing is a clear violation of the behavioral, as opposed to the timing, constraints imposed by the FDCPA. Specifically, the FDCPA prohibits the use of idle threat of lawsuits by collectors in order to compel payment. Reference to lawsuits can only be made if the collector has a genuine intention of actually filing a suit.  Even then, such an intention should be substantiated by hard evidence.  That might take the form of written documents or official recorded statements from debt collectors. Idle threats of an impending suit are exactly the type of abusive behavior which the FDCPA is designed to prevent.  As a result, this type of violation can lead to very harsh consequences for collectors. 

Consequences for Illegal FDCPA Behavior

As just stated, FDCPA violations can lead to harsh consequences.  That’s because the federal government has formally recognized the importance of preventing abusive behavior. Such violations can be pursued for up to one year by aggrieved debtors.  Significantly, both the individual collector as well as the collection company can be held liable.  Furthermore, a successful lawsuit can potentially result in an award of damages and attorney’s fees. As should be expected, a particular damage award will always depend on the precise facts of the particular case.  Nonetheless, these types of cases usually have a high incidence of punitive damages due simply to their nature.  A debt collector threatening a debtor with bodily harm could easily induce a court to award punitive damages.  It might do so simply to deter similar actions in the future. 

Our New York Attorneys Can Help

Here at Mackay, Caswell & Callahan, P.C., we’re familiar with the many reasons a person can fall behind on financial obligations. We deal with those who have slipped into debt on a daily basis. Given our familiarity, we also know that being harassed or hassled  won’t improve the situation. This post is intended to give readers the tools necessary to effectively deal with illegal debt collection behavior. If you have a debt issue to discuss, please don’t hesitate to reach out to MCC toda.  One of our top New York City tax attorneys will look into your case right away. 

Image credit: Credit Score Geek 

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