Congress passed the Fair Debt Collection Practices Act in the late 70s "to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses."
It's time to update it a bit. I propose the following changes:
1. The statutory penalty for a violation is $1,000, actual damages, court costs, and attorney's fees. Pushing the costs of enforcement (attorney's fees and costs) onto the collectors was a compromise: collectors would dodge comprehensive federal oversight and regulation but would have to pay the cost of private enforcement. But! The $1,000 statutory penalty cap has not changed since 1977. The value of the dollar has changed greatly since 1977. According to the Bureau of Labor Statistics, $1,000 in 1977 is worth $3,859.36 in 2012 dollars. I'm not an unreasonable man, and I see the value of compromise. Raise the cap in 1692k to $2,500.00 and we'll call it even.
2. The FDCPA prohibits "false, deceptive, or misleading representation[s]." Is it deceptive to try and collect a debt that is passed its statute of limitations (that can no longer be enforced) without telling the consumer as much? It depends on the federal circuit! Outstanding circuit splits create inconsistent enforcement, which is bad. Trying to collect an expired debt from someone without telling them its expired is bad. Congress should add the following language to 1692e: "The following conduct is a violation of this section . . . Attempting to collect any debt that has passed its statute of limitation without disclosing that it has passed its statute of limitation in each communication with the consumer."
3. "Debt collector" is defined too narrowly in 1692a. Currently it is "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." Change "the principal purpose" to "a substantial purpose" to cover collection activities conducted by companies that frequently collect debts but that engage in other activities too. Why should their other activities somehow exclude them from liability for their collection?
More to come.
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