The Fair Debt Collection Practices Act contains provisions that specifically state a debt collector can be held financially liable for its violations of the law. The offending collector may be required to pay you up to $1,000 for these violations. Each State also has its own debt collection laws. Please do check your State for information regarding the particulars.
How do you set aside your fear or apprehension over holding debt collection violators accountable? This may be a particular concern if you have to end up suing them. We understand this fear and experienced it ourselves.
To overcome it, you must first become an informed consumer. Know your rights. Investigate the federal Fair Debt Collection Practices Act (and the debt collection laws in your state) and its provisions and then take an honest assessment of the manner in which the debt collection firm has treated you, interacted with you, or handled your debt-related conversations. If the debt collector has threatened or mistreated you in any way, or if they have otherwise violated your consumer rights, then you know you’re also within your rights to take action.
Also, collect strong evidence against the company by keeping a phone long, maintaining copies of all written/verbal communications, and otherwise tracking the interactions you have with the debt collector. If you have strong evidence, this should also help alleviate your fears. After all, having a strong case against the company will make them afraid of you as a well-informed and well-armed consumer. Hint: please keep all envelopes in which communications from debt collectors come, and do NOT write on any of your evidence, including the envelopes, credit reports, letters, etc.
Once done, engage on our forum where you will find other members who are dealing with similar situations. There is strength in numbers; discussing our shared experiences and insights, exchanging helpful tools and more will all support you on this journey!
As with any case or lawsuit, you must have proof to support your claims. You must be able to show evidence that the collection agency or firm has broken federal or state laws. Knowing what evidence to collect for your case can be challenging though, especially given the stress that debt collectors can place on you. Here are the things that will help you build a strong case:
- Keep a chronological log of debt collector communications, including phones calls and written notices. These may be calls or letters directed to you, your friends, your family members, or your employer. Even if the collection agent doesn’t leave a message, keep track of phone numbers, call frequency, and dates and times of messages, hang-ups, etc.
- Maintain copies of all written communications, including notices you receive and letters you send to the debt collector, especially if you’ve sent a “cease communications” notice.
- Preserve digital records, like caller ID logs and voicemail messages, if possible.
- Gather statements from any third parties the debt collector may have contacted. Unless the debt collector clearly stated he/she was simply trying to get ahold of you, any third-party communication is illegal under the FDCPA.
A Statute of Limitations is the limited period of time creditors or debt collectors have to file a lawsuit to recover a defaulted debt, State laws set the time limit. In California, the statute of limitations on a written agreement is 4 years and 2 years for oral contracts. While debt collectors may continue to attempt to collect the debt, they can not sue you or threaten to sue you if the debt is past its Statute of Limitations (also called time-barred debt). If they do, this is a clear violation of the debt collection laws.
Check this link for more information about State-level statutes regarding time-barred debt: https://www.thebalance.com/state-by-state-list-of-statute-of-limitations-on-debt-960881
Note that time-barred debt is different than the time that negative information stays on credit reports, which is generally seven years. A Bankruptcy could remain on your credit report for 7 or 10 years depending upon the type you filed; a Chapter 13 bankruptcy is deleted seven years from the filing date because it requires at least a partial repayment of the debts you owe. A Chapter 7 bankruptcy is deleted 10 years from the filing date because none of the debt is repaid.
The statute of limitations applies unless you reactivate the debt by making a payment on it, promising to make a payment, whether in writing or verbally, or making additional charges/transactions on the account. Reactivation means the statute of limitations is reset on the debt and that the consumer is now saddled with a debt that was formerly past its “expiration” date.
The Fair Debt Collection Practices Act (FDCPA) provides for damages (payments due you for the debt collector’s violations) of up to $1000. If you want to receive a settlement payout greater than what is available for statutory damages, you may need to hire an attorney to file a lawsuit, or you can file it yourself…which we have done very successfully! Keep in mind that settlements may include more than money; it’s a negotiation. So, you may include in the settlement agreement a requirement that they zero out the alleged debt, that they clear your credit report of negative trade lines, or an agreement prohibiting them from selling the debt to another debt collector/debt buyer.
As it relates to monetary damages, under the FDCPA, a consumer may sue for both actual and other damages incurred during collection. Actual damages include:
- Physical damages- This can include damages that result from stress related injuries from repeated and abusive collection calls, such as headaches, rashes, heart and cardiovascular problems, etc. A consumer can receive compensation for medical and hospital bills related to these injuries.
- Emotional damages- These can include any damages related to stress and emotional hardship. Generally, these types of damages are harder to prove and to monetize, due to the nature of the injuries, but they can be recovered in a FDCPA claim.
- Wage garnishment- If your wages were garnished due to the collection agency’s actions, you may be able to recover those wages in a claim. A garnishment, for example, is a whole new lawsuit based on the judgment previously obtained. All of the rules (and fees) for filing and proving a lawsuit have to followed all over again by the creditor.
- Lost wages- if your work productivity has suffered due to constant collection calls, you also may be able to recover wages.
- Attorney’s fees- you also may be able to recover any fees spent on employing the services of an attorney. This is especially beneficial as fees spent on legal services can accumulate in cases such as these.
- Costs and fees you pay that are directly related to the lawsuit can also be part of the damages you recover; including, lawsuit filing fee, cost of serving the Defendants, costs of copies, etc.
Once you request debt validation from a debt collector, they must provide the following:
- The name and address of the creditor to whom the debt is currently owed, the account number used by that creditor, and the amount owed
- The date the creditor claims this debt became due and when it became delinquent
- The date of the last payment, as well as the last date of activity on this account
- If the debt was charged-off, the name and address of the charge-off creditor at the time of charge off, and the charge-off creditor’s account number associated with the debt
- The names and addresses of all persons or entities that purchased the debt after charge off, including the debt buyer making the written statement
- A copy of any judgment, if one exists, that gives the collector the right to collect anything from you
- Verification and documentation that there is a valid basis for claiming that you are required to pay the debt to the current creditor. For example, can they provide a copy of the original written agreement that created your obligation to pay? Or, if no contract or agreement exists, copies of documentation provided to the alleged debtor while the account at issue was active demonstrating that the debt was incurred by the alleged debtor (you).
- The name and last known address of the debtor as they appeared in the charge-off creditor’s records prior to the sale of the debt. If the debt was sold prior to January 1, 2014, the name and last known address of the debtor as they appeared in the debt owner’s records on December 31, 2013
- The amount of the debt when the debt collector obtained it, as well as the date
- If there have been any payments or other reductions since the last billing statement from the original creditor, the debt collector must provide an itemization showing the dates and amount of each of them
Debt collectors are required to validate that you owe the debt and the amount of that debt. Once they receive your written debt validation request the collection agency must stop all collection activity, including reporting and verifying, until they supply proper validation of the debt. Although no time limit is specified for them to validate, they cannot continue collection activities until they provide such information
Sometimes, collection agencies will stop collection activities and return the account to the original creditor rather than validate the debt, which is perfectly legal. Either way, not being able to communicate with you provides plenty of incentive for the collection agency to resolve the validation issue.
Oftentimes, a debt collection agency may not have the appropriate records it needs to legally collect the debt from you. Or perhaps you already settled the collection with the original creditor, but the collection agency is harassing you anyway. Or maybe their record keeping is so disorganized, they’ve accused you of a debt you don’t actually owe.
A debt validation can address all of these reasons so that you aren’t subject to incorrect collections.
Very importantly, if a collection agency can’t validate the debt, the credit bureau cannot list it as a negative mark on your credit report.
Good question! Those whose alleged debts are past the date of enforcement (or statute of limitations) are well positioned to send debt validation notices to debt collectors. In other words, if the debt you’re claimed to owe is so old that the collector is prohibited from suing you to collect it (time-barred debt), then you would be wise to send a debt validation letter to the collector ASAP!
Check this link for more information about State-level statutes regarding time-barred debt: https://www.thebalance.com/state-by-state-list-of-statute-of-limitations-on-debt-960881
Know that if anyone sends you a collection letter, the law entitles you to ask them to validate the debt, which they must do prior to continuing to attempt to collect. Why would you pay a debt that the collector cannot validate you owe? We at BWBCN have demanded debt validation on debts that were still within the statute of limitations and the action taken by the debt collectors was not to sue us, but to make a meager attempt to validate the debt. Our journey related to holding debt collectors accountable has been comical at times, nerve-wrecking at others, but it’s always been a powerful source of education and, in many instances, a very attractive settlement in our favor😁. You can learn more about our experiences on the member forum where we share stories that will likely be of great help to you.
California’s legislature has prohibited debt buyers from making any written statement to a debtor in an attempt to collect a consumer debt unless the debt buyer possesses a host of information. It also defines the term “debt buyer”. Check out this link for more information about the California Debt Buying Practices Act.
As it relates to individual actions (lawsuits), a consumer whose been violated vis a vis this Act, is entitled to:
(1) Actual damages sustained by that person as a result of the violation, including, but not limited to, the amount of any judgment obtained by the debt buyer as a result of a time-barred suit to collect a debt from that person.
(2) Statutory damages in an amount as the court may allow, which shall not be less than one hundred dollars ($100) nor greater than one thousand dollars ($1,000).
In the case of any successful action to enforce liability under this section, the court shall award costs of the action, together with reasonable attorney’s fees as determined by the court
Recovery in an action brought under the Rosenthal Fair Debt Collection Practices Act (Title 1.6C (commencing with Section 1788 )) or the federal Fair Debt Collection Practices Act ( 15 U.S.C. Sec. 1692 et seq. ) shall preclude recovery for the same acts in an action brought under this title.
Statutory damages are predetermined payments established by law to compensate for certain violations committed by another party (i.e. original creditors, debt collectors and debt buyers).
Although debt over 30 days is considered delinquent, we are primarily talking about accounts that are still outstanding after 180 days. At this point, a company or department that specializes in collecting payment for delinquent accounts will contact you about the alleged debt and attempt to collect the payment.