Fair Debt Collection Practices Act under the Consumer Credit Protection Act

The FDCPA was initiated in 1978 as a statute of law under the CCPA. Congress passed it as a law to protect and safeguard the consumers from any harassment by debt collectors. It is often reported that the consumers are more harassed by the collection agencies when a certain creditor hires or sells off the account to an outside third party. They start receiving harassing phone calls at home, place of work as well as their cell phones. Many people get furious by such extreme illegal collection tactics and file for bankruptcy. The congress had to take actions and that’s why the FDCPA laws came into effect. The biggest advantage of the FDCPA is that it allows consumers to dispute the validity of the debt and get all the required information from the collection agency when they try to recover money by false and misleading information. This was not possible before the FDCPA laws came into effect.

Debt collectors pretend to show themselves as “Factoring company” or “collection agency” so that they can create the scare among consumers and immune themselves from the FDCPA rules. A debt collector is a very normal person hired by the original creditor to recover the payments from the consumer when a certain account is past due. They don’t have any special powers and the consumers don’t need to be scared of them. Debt collectors will usually use two communication methods when they are collecting on a past debt. They will try to reach the consumer either by mail or phone.
  • FDCPA laws apply on the following types of debts:
- Auto loans
- Medical care debts
- Mortgages
- Credit card debt
- Retail business loans
  • The FDCPA does NOT apply to the following types of debts:
- Agricultural or farming debts
- Business debts

If a collection agency is violating the FDCPA laws repeatedly, you can sue them by pressing charges and get compensated up to the extent of damages. You can take legal actions against them within 1 year from the date they started doing the harassment. If you are able to prove that the debt collector has violated the laws, you will get the following compensation:

1) Cost of actual damages
2) Attorney fees and costs incurred by the debtor.
3) Additional damages of 1% of debtor's net worth, for a maximum of $500,000.

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