In 2011, a record number of consumers decided to sue debt collectors for Fair Debt Collection Practices Act (FDCPA) violations. Yet, FDCPA debt collection lawsuits pale in comparison to the record number of FDCPA complaints. The following explains the various grounds for filing debt collection lawsuits.

The weak economy, which has forced more consumer debt defaults, has sparked more aggressive debt collection activity. But, by December 15, 2011 consumers had filed 11,359 FDCPA lawsuits, surpassing 2010′s record of 10,914 lawsuits, according to WebRecon LLC. Despite this precedent, consumers have filed a disproportionately higher volume of FDCPA complaints.

Although the 2011 report isn’t out yet, the Federal Trade Commission (FTC) may announce another record year of complaints on debt collectors. In 2010, the FTC, which protects consumers against the abuses of third-party debt collectors, received a record 108,997 complaints, representing a 19% increase over 2009, which held the previous record of 88,326 complaints.

The above statistics are no phenomenon to the FTC, which receives more consumer complaints about the collection industry than any other industry. But, why were 88% more collection debt collector complaints filed than actual lawsuits in 2010?

According to WebRecon LLC, “A significant percentage of consumer litigation is initiated by the same consumers over and over again, and screening them out of the general population can reduce lawsuits by as much as a third.” Thus, the heightened rate of collection lawsuits is arguably attributed to more “informed” consumers. Apparently, more people that are being educated about their rights are filing collection lawsuits.

FDCPA Prohibitions that Trigger a Collection Lawsuit

The FDCPA, which prohibits false, deceptive or unfair debt collection tactics, allows you to sue a company that attempts to collect a debt on behalf of the original creditor. This law allows you to take legal action for a variety of reasons, including if the company:

- Threatens illegal actions or actions that they have no intention of taking;
- Misrepresents itself as a law firm or that its collectors are attorneys;
- Calls consumers before 8 a.m. or after 9 p.m., or at their workplace;
- Uses obscene or profane language, or harasses consumers with repeated phone calls;
- Misrepresents that a debtor will be arrested or have property seized if he/she doesn’t pay;
- Makes false statements to collect a debt or obtain information about a consumer;
- Communicates with a consumer after receiving written notice that the consumer refuses to pay or wants the collector to stop calling;
- Withdraws funds from consumers’ bank accounts or charge their credit cards without their consent;
- Deposits or threatens to deposit postdated checks before the date on the check;
- Asks a third party for a consumer’s location information more than once without the third party’s consent or a reasonable belief that the person’s earlier response was wrong or incomplete and that the person now has correct location information;
- Reveals to third parties that a consumer owes a debt.

Having a basic understanding of the law, you’ll know how to catch collectors violating your rights and what evidence to bring to court if you decide to file a lawsuit.

What Relief You Can Get If a Debt Collector Breaks The Law

If your rights were violated by a collector, the FDCPA entitles you to recover a maximum award for damages of $1000 per violation. Statutory damages are per action (lawsuit). Plus, they may have to pay your attorney’s fees and court costs as well as post-judgment interest. Legally, you have the right to sue a collector in state or federal court within one year from the date the law was violated.

With some assistance, it’s not that difficult to file your own small claims lawsuit. You can also seek a free case evaluation from a consumer debt collection rights attorney. Many work under a “no recovery/no fee” contingency. This helps you avoid out of pocket costs and the attorney only gets paid when you get paid.

You can obtain a list of the top attorneys that sue debt collectors by calling Debt Free League at 1-800-213-9968. As professional debt arbitrator, we can also help you fight collection agencies to reach massive debt settlements.

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  1. Jason Born says:

    Its time that people educate themselves and understand their rights!

    Stop The Harassment!

  2. Chris Romans says:

    This is some great information, and by and large is very useful in this hard economic time. With so many people out of jobs and getting into debt, it is no wonder that the amount of complaints and the extent to which debt collectors are going after people. It is hard to really take sides on a personal level, as the people in debt should have not get into debt in the first place (but in this time, it is easy to understand why it happens); and debt collectors are entitled to get their money, but of course not through illegal means.

    The major reason I would probably not sue for something like this is the amount of time and energy it takes to go through a lawsuit. I have known people who have been to court, and spent a good year or two just working on getting their rightfully earned back pay from a job they were fired from. Additionally, the cost of a lawyer (even if they only get paid after you get paid) can be pretty high, potentially even leading to the lawyer getting between 50 to 75 percent of your earnings from the court case (if not more). Assuming you are awarded $1,000 dollars in damages, after all the fees you make about $250 dollars. Ultimately, I think the goal of lawsuits like this are more about telling companies they can not use dirty tactics to get money; and for that these lawsuits are most important.

    Really interesting and useful content though. I think with the right information people would definitely be more prone to sue for sure!

    • admin says:

      Chris, you are right to say that about attorneys. But, keep in mind that not all attorney fees work the same. For the most part, most legal fees are about one third of the judgment award. But, generally on FDCPA lawsuits, I’d like to reiterate that numerous attorneys work on a “no recovery – no fee” contingency.

      Some legal rights attorneys allow you to keep 100% of the actual FDCPA damage award and only charge for their attorney fees, which are included with the judgement award, meaning that the losing party (“debt collector”) would be paying all of the legal fees pursuant to the collection lawsuit.

      In closing, don’t be too concerned about hiring an attorney if your consumer rights are being violated. At the very least, the collection harassment will cease and you’ll gain some peace of mind.

      • Chris Romans says:

        I certainly would agree that that if things are so bad and you genuinely feel like you are being harassed, then going to court may just be a necessary step. Even if you can’t make much money from the court case, the peace of mind is one thing many people really need. I suppose the next step from being aware of this is just about finding the right person who would be willing to sacrifice the time and energy to go through the court battle.

        When it comes to illegal debt collection, I am wondering if it is possible for multiple people to form a lawsuit against a given debt collection agency as one unit? I can’t remember the term for this, but I would imagine something like this making a bigger impact. Not to mention, it would be more comfortable to sue a big company if you have more people on your side. I especially am asking this because I know illegal debt collection tactics are pretty common, so finding even 100 people to sue a company at once probably would not be too difficult of a task. Any thoughts on this?

        • admin says:

          Unfortunately, there are ambulance chasers in every neck of the woods. Attorneys will always find reasons to file even the most frivolous lawsuits. Plus, now there seems to be more legal profits to reap in the FDCPA violations arena.

          Frankly, based on the degree and recklessness of unscrupulous debt collectors, it would be fairly easy for law firms to chase after class action lawsuits. Just, last year there were several private class action lawsuits against Midland Funding LLC, and related entities Encore Capital Group, Inc. and Midland Credit Management, Inc.

          The San Diego collection agency was accused violating the FDCPA, which prohibits deceptive, unfair, and abusive practices and similar state statutes. I suspect that in light of the record increase in FDCPA violations and lawsuits, more class actions follow. It’s an inevitable consequence.

  3. FDCPA says:

    I quote “The weak economy has forced more consumers to default on their debts. It has also sparked more aggressive debt collection.” True, but the FDCPA protects the consumers more than they’d know off. A lot of debt collectors bank on the fact that consumers are not aware of their rights and even collect on debts that have been payed, delinquent debts that have way over passed the statute of limitations etc.,
    The number of violations have increased over the years and being in the know of their FDCPA rights would further benefit the consumer.

    • admin says:

      Yes indeed, the number of FDCPA lawsuits are creeping up. I’m sure 2011 and 2012 will also be record years. based on the disproportionate number of yearly FDCPA complaints on collection agencies, consumers are still far from reaching the tip of the iceberg; more will definitely sue debt collectors.

  4. Amy Loren says:

    Do you think the increase in lawsuits is a result of desperation, unemployment, and the general economic depression that has hit the United States (and on a larger scale the world to a good degree)?

    It’s hard for me to really gauge what these statistics mean, hopefully you can weigh in with your professional opinion on why you think these statistics have climbed so high. It would be very interesting.

    • admin says:

      The spike in collection lawsuits is definitely attributed the spike in unemployment and our recent recession. However, I might also add that valuable online information from sources like the Debt Free League Blog is creating more consumer awareness about the shady practices of debt collectors.

  5. Tony Lee says:

    There are many false statements with FDCPA Infact things like Contact your employer about the debt, Attach your wages when unlawful or not intended-this includes threats and even File or threaten to file criminal bad check charges. These are all really bad for the economy, so staying away from stuff like that is the best choice.

  6. Charlene says:

    I think it shows an increase in consumer awareness that they are no longer accepting these illegal behaviors. I’m sure that sites like yours have a lot to do with that.

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