Debt Collectors Getting Nastier as Economy Flounders

Consumer Rights Under the FDCPA, FDCPA Claims, Hiring a Lawyer, Illegal Debt Collection Practices

CNN Money recently published an article entitled “Debt Collectors Get Nasty” which confirms what many of you already know – that bill collectors are becoming more and more aggressive when it comes to demanding payment from consumers.   In 2009, the FTC reported over 40,000 complaints from consumers about debt collectors calling repeatedly, up from around 1,000 complaints in 2007.   Obscene language is another area of complaint as are calls at inconvenient times.  Alarmingly threats of violence against consumers are an increasing source of complaints to the FTC.

The FDCPA specifically prohibits repeated calls made for the purpose of harassment, calls before 8AM or after 9PM and calls in which violence is threatened.

While the FDCPA remains a viable tool to combat aggressive debt collectors, its artificial limit on damages ($1,000 per claim + actual damages + attorney’s fee) does little to truly discourage bill collectors who are willing to accept a few FDCPA payments as the cost of doing business.   And the courts have not been willing to make offending bill collector defendant’s really pay.  My colleague, Boston consumer protection lawyer Bill McLeod recently blogged about a 1st Circuit case in which the First Circuit Court of Appeals reduced a $20,000 trial court award of attorney’s fees down to $2,500.  Bill notes that:

For Congress, the message should also be a clear: the statutory damages amount of $1,000 may not be enough to deter collection companies from abusive debt collection practices. While I cannot credibly advocate that consumers should hit a jackpot if targeted by an abusive debt collector, the statutory damage amount cannot be so low that it could easily be viewed as a cost of doing business by a ruthless debt collector.

Off the record, owners of collection agencies will admit that paying a few thousand dollars to the one or two consumers who take the time to pursue an FDCPA claim does not deter them from using effective, but illegal collection tactics.

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Jonathan Ginsberg

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

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