Wednesday, August 12, 2009
A Guide to Federal & State Restraints on Consumer Debt Collection
By: Paul Silvestri
Many of us are often victimized by unscrupulous businesses attempting to collect debt using intimidating guerrilla tactics. Few really know the different consumer protection statutes which exist to protect the public from these unethical and sometimes even threatening business practices. 15 U.S.C. §1692, et sequi known as The Fair Debt Collection Practices Act (“FDCPA”) is the federal law which promotes ethical business practices by debt collectors. The Florida counterpart is Fla. Stat. §559.55, et sequi, more commonly known as The Florida Consumer Collection Practices Act, (FCCPA). These acts establish general standards of prohibited conduct, define and restrict abusive collection acts, and provide specific rights for consumers.
As a result of the rise of information technology, debt collectors have become increasingly sophisticated and deceptive in their practices. Therefore, it is necessary for consumer’s to know their rights.
Validation Rights Concerning Debt
General Notification: Within 5 days after the initial communication from the consumer in connection with the collection of any debt, a debt collector shall, unless the following information contained in the initial communication or the consumer has paid the debt, send the consumer written notice containing – 1) the amount of debt; 2) the name of the creditor to whom the debt is owed; 3) a statement that the consumer has 30 days to contest the validity of the debt and if they fail to do so the debt will be assumed to be valid; 4) A statement that after the consumer contests the validity, the debt collector must produce verification of the debt or a copy of the judgment against the consumer to be delivered to the consumer.
Request for Validation: If consumer disputes the debt within the 30 day window, the collector shall cease collection of the debt until the debt collector verifies the debt to the consumer and provides the name and address of the original creditor.
Representations Concerning Amount of Debt
The FDCPA is violated when any communication is sent to the consumer which does not completely disclose the full amount of the debt. 15 U.S.C. §1692g. Even a statements such as “this amount does not include accrued but unpaid interest, or unpaid late charges” has been held in violation.
False Threats of Lawsuits
The FDCPA contains a general proscription against the use of any false, deceptive or misleading representation or means in connection with the collection of nay debt. 15 U.S.C. §1692e. The misrepresentation or exaggeration of the imminence of a suit on intent or authority to sue constitutes a violation of the FDCPA.
Communication With Third Parties
A debt Collector, with limited exceptions or to effectuate post-judgment judicial remedy, may not communicate in connection with the collection of any consumer debt, with any person other than the consumer, his attorney, a consumer reporting agency, a creditor, the attorney of the creditor, or the attorney of the debt collector.