Sometimes I think it goes without saying that a person who notices a debt collector breaking the law should sue the collector. It does not go without saying, however. It goes with saying. John Skiba, an Arizona consumer attorney and partner of Skiba Law Group, PLC, lays out five basic reasons that consumers should sue collectors who break the law in an article over at JD Supra. His reasons are these:
1. "A Lawsuit Will Make the Abuse Stop"
This is basically true: a collector who gets sued for violating the Fair Debt Collection Practices Act will probably back off collecting on a debt. Sometimes they will even agree to satisfy the debt as a condition of dropping the lawsuit. There are other ways to get abuse to stop (for example, if a collector's calls are obnoxious, write them a letter demanding they stop. They have to.), but a lawsuit is a pretty surefire way to get them to move on.
2. "Statutory Damages up to $1,000"
The FDCPA was passed back in the 70s in lieu of creating a regulatory agency to oversee the collection industry. The CFPB did not exist back then. The idea was that a cottage industry of consumer attorneys would act as private attorneys general, seeking out violations of the FDCPA and suing on them. Instead of paying a fine to an agency, a collector who breaks the law has to pay it to the person they harmed. This fine, which tops out at $1,000 and has not been raised since the 1970s, is nevertheless a big help to someone with consumer debt.
3. "Actual Damages - No Limit"
If the legal violation causes a person actual harm, for example prevents them from qualifying for home financing or causes some amount of measurable psychological harm, the FDCPA lets them sue for it. This restoration, a making-equal-again, is a basic function of civil courts anyway.
4. "Free Lawyer"
The FDCPA requires debt collectors who break the law to pay the person's attorney if they sue them and win. This is really huge, because someone who's 2000 bucks in the hole to a collector likely can't afford an attorney, which is a nasty catch-22 that would otherwise make the FDCPA functionally unenforceable. Any attorney will tell you that it is extremely rare for a law to authorize this. There is actually an "American Rule" that people have to pay their own attorneys, win or lose. The FDCPA is an attractive exception to this.
5. "Costs Paid"
Court is expensive. In Minnesota, it costs $400 to file a lawsuit in federal court. Like attorney's fees, the cost of filing a lawsuit would discourage people from filing against collectors, since debtors in crisis are categorically less likely to be able to afford the fee. The FDCPA covers these costs too.
Bennett Hartz is an associate attorney at Drewes Law, PLLC who specializes in defending against debt collection and foreclosure. He can be reached by email at firstname.lastname@example.org.
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