Collecting Damages in FDCPA Cases

About the FDCPA

In 1978, the FDCPA (Fair Debt Collection Practices Act) was added to the Consumer Credit Protection Act under Title VIII. The purpose of the act was to eliminate abusive and harassing debt collection practices in order to promote the fair and proper collection of debts. By creating this legislation, it provided consumers with a venue for both the disputing of and obtaining of the debt validation information in order to ensure the accuracy of it. Additionally, guidelines were developed for how debt collectors should properly conduct their collection practices while the consumer’s rights are defined as well.

Damages and monetary considerations

In many cases, when FDCPA cases go to court and a judgment is made in favor of the consumer, monetary damages are usually awarded with the judgment. If you feel you have been harassed or treated unfairly by a debt collector, you have up to a year to file your FDCPA claim and sue that collection agency or debt collector. The current limit on statutory damages is $1,000, which is the maximum that can be recovered by the consumer in either a federal or state court. The following is what damages are typically awarded for:

  • damage to your credit score
  • excessive payment amounts
  • mental distress

Additionally, when the judgment is ruled in the consumer’s favor, the monetary awards that can potentially be awarded include the following:

In addition to the above, the collection agency’s representatives or the debt collector could be liable for 1% of the net worth of the debt or $500,000, whichever equates to the lesser amount of the two. Plus, they may also be responsible for the actual damages mentioned above.

Who is covered by the FDCPA?

According to the guidelines set out by the FDCPA, the term “debt collector” is broadly defined under section 15 U.S.C. § 1692 as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another” (see Wikipedia).

The law applies to all 3rd party debt collectors as well as collection attorneys. However, it does not typically apply to the internal or original collector/creditor. Another point is that certain states (California is one of them) also have state FDCPA statutes in place which are similar to the federal FDCPA and do pertain to the original creditor.

What actions can you take against violators of the FDCPA laws?

First and foremost, you have a 12 month period in which you are allowed to sue a collection agency or debt collector for violating the statutes of the FDCPA. Up to $1,000 in statutory damages can be recovered in a federal or state court as well as any actual damages, attorney fees, and related court costs. Actual damages will typically include:

  • damage to your credit score
  • excessive payment amounts
  • mental distress

Additionally, the collection agency representative or debt collector may also be liable for 1% of the debt’s net worth or $500,000, whichever of the two is the lesser amount, plus any other actual damages.

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Jonathan Ginsberg

For over 25 years, Jonathan Ginsberg has represented honest, hardworking men and women facing financial troubles.