Debt collectors are one of the most heavily regulated industries, and for good reason. This industry racks up more complaints of fraud and other abuses than practically any other.
Debt collectors have a financial incentive to do whatever they think is necessary to get you to pay what they ask, even break the law. There are large profits possible in the debt collection industry. Unfortunately, debt collection also draws more than its share of unethical companies and people. This is where a California FDCPA attorney comes in protecting your rights and holding these unethical entities accountable for their actions.
Companies Sell the Debts You Owe to Private Debt Collectors
The company to which you owe money often sells unpaid debts to debt collectors. Your original creditors either do not have the wherewithal to collect the debt or do not want to associate themselves with debt collection efforts.
If the original company pressured you to pay your debt, they will suffer from a public relations perspective. They sell the debt to get something for it while taking the situation out of their own hands. Once they sell your debt, the original company is entirely out of the picture. The debt collector then files a lawsuit against you for the unpaid debt.
Debt collectors step into this void. These are opportunistic companies that buy the debt from the original creditor for pennies on the dollar. They are trying to find debts the debtor has a higher chance of paying. The debt collector aims to make back the money they spent on buying the debt along with a hefty profit.
Illegal and Abusive Tactics that Debt Collectors Use
Debt collectors will use many tactics to twist your arm into paying. They might harass, frighten, even outright lie to collect on your debt. Collectors call repeatedly, even after you have exercised your legal right to tell them to stop contacting you.
Here are some illegal tactics that debt collectors use when dealing with consumers:
- Misidentifying themselves when they contact consumers, either by giving them a different name or misstating their position (some debt collectors even masquerade as lawyers because they know that it can frighten a debtor)
- Inventing fictitious debts that do not exist or tacking fees onto the debt to get extra money from the consumer
- Discussing the debts with others (a debt collector cannot disclose the existence of an unpaid to third parties who are not a spouse that will be jointly responsible for the debt)
- Harassing the debtor by calling repeatedly (or by calling at all when they have been told not to call at all
- Threatening or being verbally abusive to the debtor when speaking with them
Know Your Rights to Know When a Debt Collector Violates the Law
Most consumers don’t know their rights when dealing with debt collectors. Many people are so afraid when dealing with debt collectors that they do not know what collection activities are acceptable. They may even think that the debt collector has extreme power over them (partly because the debt collector may have lied and said that they can take action to punish them).
A FDCPA attorney will not tolerate any unlawful conduct by collectors. If you believe collectors crossed the legal line with their efforts, allow a lawyer to evaluate whether they violated your rights. If so, the lawyer can determine your options for legal relief and take the best course of action on your behalf.
The FDCPA Protects You from Illegal Behavior
Congress passed the Fair Debt Collection Practices Act to protect you from conduct like this. FDCPA regulates debt collectors and determines what they cannot do when dealing with you. Nothing in the FDCPA says that debt collectors cannot do their job. However, there are limits to how they can do it. If the debt collector violates FDCPA, they can face consequences on several levels.
Two Federal Agencies Are Here to Review Your Complaints
There are several agencies that regulate debt collectors. On the federal level, debt collectors must comply with laws that the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) oversee. The FTC has the power to enforce FDCPA.
If you want to file a complaint on the federal level, the FTC can investigate. The FTC has its own website where you can report fraud. You will fill out a complaint form that will alert the agency to what happened. The FTC will review your complaint and determine whether further action is necessary.
You can also file a complaint with the CFPB, who will perform their investigation. Which federal agency has jurisdiction over a complaint depends on its annual revenues from debt collection activities. The CFPB can take action against debt-collection companies with revenues over $10 million.
Filing a Complaint Against Debt Collectors on the State Level
Debt collectors must also comply with laws and regulations on the state level. Chances are that a state-level law also applies to debt collectors. For example, The Department of Financial Protection and Innovation regulates and licenses debt collectors in California.
On a state level, you have two options for filing a complaint:
- You can go to the agency that regulates debt collectors, and they can investigate
- You can file a complaint with the state attorney general, who oversees consumer protection in the state
The state regulator agency can refer the action to the attorney general and vice versa. You may want to complain to the state and federal governments to increase the chances of action since both have jurisdiction over the debt collector.
Tips for Filing a Complaint Against a Debt Collector
When filing a complaint, make it as easy to read as possible. The government regulators will decide whether to investigate based on your complaint. Review what you wrote with your lawyer before you hit submit. Write with a purpose, and try to organize your thoughts before you write. Then, proofread what you wrote.
If you hired a lawyer and want to file a complaint, your attorney may draft the complaint for you.
The Federal Government Could Fine or Ban the Debt Collector
If you file a complaint with a regulator, they may take enforcement action against the debt collector. The federal or state government can levy a heavy fine against the debt collector. In severe cases, the Federal Trade Commission has even banned debt collectors from conducting business. The state attorney general can also shut down the debt collector or charge them with fraud for severe violations.
It is nice to know that the government can take action. However, any fine that the government assesses goes to the United States Treasury or state government (depending on which took the action). The money does not go into your pocket, even though you experienced the illegal behavior.
Sometimes, the government may distribute money to complainants and victims of fraudulent debt collectors. For example, if the debtor pays a fictitious or inflated debt, the FTC may distribute the money it collects to the scheme’s victims. In other instances, the FTC may ban the debt collector from the industry without collecting money to return to victims.
You Can Take Control By Filing an FDCPA Lawsuit
When the FTC is the only federal entity that takes action against a debt collector, it determines what punishment to assess. The government will decide whether they will collect money to distribute to victims. Even though you may have filed the complaint, you will have no say in how the government proceeds.
You may want more control over your legal fate.
You can take matters into your own hands by filing a lawsuit. Then, you will make decisions about your case, working closely with your attorney.
To get the justice you deserve for what the debt collector did to you, you may need to file an FDCPA lawsuit.
To file an FDCPA lawsuit, contact an experienced lawyer. While the law may entitle you to compensation, an attorney can recover it through the legal system.
Your Damages if You Win an FDCPA Lawsuit
The FDCPA makes the debt collector strictly liable to pay damages when they break the law. If you can prove that the debt collector did something wrong, the burden will shift to them to show why they are not liable.
If you file an FDCPA lawsuit, you can get statutory damages and payment for your suffering. The law imposes a $1,000 penalty that the debt collector must pay you for breaking the law, even if they have not harmed you personally. If the debt collector caused you damages, they must also pay for the harm.
Here are some other damages that you can recover in an FDCPA lawsuit:
- Emotional distress
- Physical distress
- The medical costs necessary to treat the conditions that you have developed
- Lost income if the impact of the debt collector’s illegal actions harmed your productivity or affected your job
The debt collector may even need to pay your attorney’s fees and costs, meaning you can keep the entire amount you receive in a settlement or lawsuit.
Class Action Lawsuits Against Debt Collectors
You can also file or join a class action lawsuit against the debt collector if the class has all suffered similar harm. You may do this when a debt collector has harassed numerous people and subjected them to endless phone calls. There are limits on the statutory damages part of the claim (the lesser of $500,000 or 1 percent of the debt collector’s net worth), but the class action lawsuit can also recover actual damages.
You can get punitive damages in a state law claim, depending on the laws in your state. You can also file your lawsuit using other state common law claims for egregious conduct. For example, you can sue for fraud or intentional infliction of emotional distress if the debt collector said something completely outrageous with the intent of causing you harm.
FDCPA Lawyer Work on a Contingency Basis – They Only Receive Legal Fees if Your Case Succeeds
It will not cost you anything out of your pocket to hire an FDCPA lawyer. Your attorney will lead you through the process and determine where it may be best to file your lawsuit. Filing your lawsuit in the most advantageous forum can increase your financial recovery. There are differences between federal and state laws that can make one court a better choice than another.
Then, they will represent you throughout the legal process until your case resolves. Your lawyer only receives legal fees if you win your case, and your settlement or jury award may even cover your attorney’s fees.
You do not have to let debt collectors get away with shocking and illegal conduct. You can take action today to hold abusive and law-breaking debt collectors accountable for their actions. Not only will a lawsuit compensate you for what you endured, but it can also stop illegal conduct, so others do not have to live with it.
Seek a consultation with a consumer rights attorney in San Diego who handles FDCPA complaints today.