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Wednesday, January 03, 2007


15 United States Code § 1692, et. seq. is the codification of the Federal Fair Debt Collection Practices Act. It is a law that was passed by Congress in response to the actions of a small minority of disreputable and unethical debt collectors. On its face, it purports to be a law designed to protect the individual consumer. However, as with all things which are birthed from Capital Hill, it is in fact the product of high powered lobbyists. Those lobbyists made sure that the FDCPA was stripped of any and all teeth and what was left is merely an illusion. Unfortunately, most consumers who get into debt trouble are falsely led to believe that the FDCPA is at best a sword to be used against their creditors, and at worst a shield to protect them from their creditors. It is neither; it is an urban legend, an internet myth, a tragic illusion that the FDCPA provides any real substantial protection to a consumer.

15 USC § 1692g(a) sets forth the "validation" requirements in collecting a debt. When any debt collector is attempting to collect a debt, whether a collection agency or an attorney such as myself, begins collection activity, we must validate the debt by providing the information set forth in 1692g(a). The information required by the law is (1) the amount of the debt; (2) the name of the creditor; (3) a statement that the debtor has 30 days to dispute the debt or it will be assumed valid. That is all of the information that is required by 1692g(a). No additional information is required by the law. If a debtor disputes the debt within the 30 day period, 15 USC § 1692g(b) provides for the debt to be verified. This simply means that the debt collector must send a written statement to the debtor with the name and address of the original creditor and the amount of the debt. This is all a verification is. The verification does not require the collector to produce original documents evidencing the debt. In fact, the debt can be verified by a simple sworn affidavit.

The one tiny bit of protection provided by the Act is that once the debtor disputes the debt, the debt collector must cease collection activities until he puts the verification in the mail to the debtor. Again, though, the verification required is extremely simple and extremely easy to prepare or obtain. Therefore, this supposed protection turns out to be an extremely brief pause in the debt collection process.

Unfortunately, just as there are unscrupulous and unethical debt collectors, there are unscrupulous and unethical debt advisers. You can find them at any number of over a thousand websites on the internet. Some of these self-proclaimed gurus will for a small fee teach you how to fend off debt collectors using the FDCPA. There are in fact others who will provide this information for free if you are more diligent in your Google searching. They will provide you with form letters guaranteed (they don't ever tell you what you will get if their guaranteed product does not work like they say it does) to stop debt collectors dead in their tracks. Unfortunately, I have begun to receive evermore of these forms letters obtained off the internet. In my mind, this is an absolutely tragedy because these are desperate people who are being given false hope and who are being led down a path which ends in a worse situation and a larger debt. These form letters tell the debt collector that he must furnish information which is not required by the FDCPA and make hollow and even ludicrous threats, such as reporting to the Federal Trade Commission. Rather than strike fear in the heart of the collector, when I receive one of these form letters hot off the internet, I mark the file for what I call internet attention. This simply means that I know I am dealing with a debtor who has no clue what they are doing or what the law actually is and that this will be an easy debt to collect once I locate assets. Because this person has been given false hope by an internet scam artist, I know I will be wasting my time in attempting to reach a reasonable and amicable solution or settlement of the debt and proceed straight to the quickest possible judgment and collection activity.

What the internet scam artists do not tell consumers is that the FDCPA contains a virtual "get out of jail free" card. 15 USC § 1692(k)(c) provides that in order to punish a debt collector for violation to the FDCPA, you must prove that the violations were intentional and that there will be no punishment whatsoever if the debt collector can show that the violation was unintentional and that the debt collector has in place policies and procedures to provide with compliance with the FDCPA. Therefore, I and the collection agencies I represent maintain meticulously policy and procedural manuals regarding what is and what is not a violation of the FDCPA and I require all of my employees to review and sign off on that manual on a regular basis. I am not saying that my office is perfect and that we do not or have not on occasion unintentionally and purely by mistake violated the FDCPA. I am saying that my staff is well educated on the FDCPA and that we do not engage in an intentional pattern and practice of violation and therefore, no court is going to award a debtor damages for a mistaken violation. Now I know you are saying, "Wait a minute, I have seen recent headlines where debt collection agencies have been slammed by the Federal Government for violations of the FDCPA." You are absolutely correct. Those were cases of completely unscrupulous and unethical agencies which deliberately and intentionally and over a long period of time engaged in actions which are directly prohibited by the Act. What the consumer is not told is that those agencies or collectors are punished by the Federal Government by the imposition of large fines or the revocation or collection licenses and that has absolutely no effect on the validity of the consumer's debt. That debt remains outstanding and will simply be sent to another collection agency for collection.

So, if you are a debtor how should you use the Federal Fair Debt Collection Practices Act? You can take advantage of the anti-harassment provisions and protection provided by the Act. You can tell the collector not to contact you at work if you so desire. You can tell the collector not to contact you at all if you so desire. However, if you refuse all contact with the collector, you should assume that the debt will be forwarded to a collection attorney for suit. You can request a verification which will delay collection of the debt. You can use that time to raise funds to pay off the debt or to contact the collector and attempt to make some arrangement for satisfaction of the debt. If you are being harassed by a collector, repeated phone calls, threats of criminal prosecution, threats of providing information about your debt to your employer or friends or family, etc., you can and should report those violations to your state licensing commission and you can file a lawsuit. However, as with all lawsuits, you will be at a distinct disadvantage since the collection agency will be represented by an attorney. However, if you are not being harassed or if the collector has not intentionally violated the FDCPA, do not threaten to sue them. You will only draw attention to yourself and to your ignorance of the law. The bottom line is that the FDCPA is more myth, than sword or shield.

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