Wednesday, July 14, 2010
Common Debt Collection Practices Under Florida Law
In a climate where more consumers are struggling to meet their credit obligations, creditors and debt collectors are becoming highly aggressive in their attempts to collect consumer debts. Federal Trade Commission (FTC) complaints are up by fifty percent (50%) in 2009 and are on track to jump an additional thirteen percent (13%) by the end of 2010. Despite increased complaints to the FTC, creditors and debt collectors continue to march over federal and state consumer protection statutes on their way to collecting debts. This article addresses the impact of the Florida Consumer Collection Practices Act (FCCPA), on common consumer collection issues.
Prior to resolving a debt, collection calls are the most common collection issue encountered by consumers. When dealing with credit card accounts or mortgage debts, collection calls begin immediately upon delinquency. The FCCPA provides consumers broad protections and consumer rights. For example, drastically limits the frequency and manner of collection calls. With very few exceptions, creditors are forced to cease communication with the consumer and must communicate strictly with the attorney.
After a debt is resolved and is no longer collectable, consumers may continue to experience collection activities and improper credit reporting. Specifically for struggling homeowners, many turn to a short sale transaction as way to resolve a mortgage debt and avoid a foreclosure. The collection of a short sale deficiency where a lender forgave the mortgage debt is the collection of an illegitimate debt and a violation of the FCCPA. Another common consumer protection issue following completion of a short sale is improper credit reporting. It is a violation of the FCCPA for a creditor to knowingly publish false information about a consumer's creditworthiness. It is not uncommon for completed short sale transactions to be improperly and falsely reported to the various credit reporting bureaus.
Every consumer collection activity that occurs in the state of Florida is subject to the FCCPA. The examples cited above are only a few examples of collection activities that potentially violate Florida law. In addition, there are a number of other collection activities that are improper in the state of Florida. It is also important to note that federal laws may apply in these situations including but not limited to, the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. Enforcement of the FCCPA is left to individuals and private attorneys. When faced with a collection activity, a consumer can maximize their consumer rights and limit collection activity by acting immediately.