The Fair Debt Collection Practices Act (FDCPA) has been around since 1977. The FDCPA is a federal law that applies to every state. In other words, everyone is protected by the FDCPA. The FDCPA is essentially a laundry list of what debt collectors can and cannot do while collecting a debt, as well as things debt collectors must do while collecting a debt.
- Damages: if a collection agency violates any section of the FDCPA, the consumer is entitled to damages up to $1,000.00. Additional damages are warranted in cases where the collector’s collection activities were so egregious the consumer suffered emotional distress. 99% of cases do not involve emotional distress damages.
- Attorney’s fees: The FDCPA has a fee-shift provision. This means, the collection agency pays the consumer’s attorney’s fees and costs.
- Debt that is covered by the FDCPA: only consumer debt, such as personal, family, and household debts. For example, money you owe on a personal credit card, an auto loan, a medical bill, or a utility bill. The FDCPA does not cover debts you incurred to run a business, or debts regarding unpaid taxes, or traffic tickets.
- The FDCPA only applies to 3rd-party debt collectors: the FDCPA defines a debt collector as any person who regularly collects, or attempts to collect, consumer debts for another person or institution. In short, only third-party debt collectors are bound by the FDCPA. That is, original creditors, such as credit card companies and banks are not bound by the FDCPA.