We want to give you the text of the FDCPA and our analysis of this important piece of consumer protection litigation which is one of the primary weapons we have to fight back against abusive debt collectors to make them stop abusing us.
This will be a series of posts and the format will be our analysis and then we'll put the actual text of the particular section we are discussing below. We hope you will find this helpful and we look forward to hearing from you.
Updated 3-12-10 -- Here is Section 1692a which covers the definitions used in the FDCPA.
Section 1692 is the opening section of the law and it gives the reasons and the rationale for why Congress decided, over 30 years ago, that it was necessary to "federalize" debt collection which up until that time was solely and simply a matter of state law. This is a critically important part of the FDCPA as it gives us actual Congressional findings related to the problem of abusive debt collectors.
Subsection (a) tells us that Congress found "abundant evidence" that debt collectors around the nation were using "abusive, deceptive, and unfair debt collection practices" and it says that this was being done by "many debt collectors."
Often when we sue abusive collection agencies, debt buyers, or collection lawyers, they claim that the industry has no problems and they certainly have no problems. Congress found, however, that the problem was so bad that this law was needed.
The next argument from collectors is that "OK so we broke the law - but abusive debt collection tactics don't really hurt anyone." Well, Congress disagrees because it says that these abusive, deceptive and unfair tactics "contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy."
That is a very serious list of problems that often result from illegal debt collection.
Bankruptcies are often condemned by businesses (until they need to file - then that's somehow different) but many bankruptcy lawyers recognize that the primary reason people show up in their office to file bankruptcy is because of abusive debt collection tactics.
Everyone recognizes the value of marriage and the stability of families but do we recognize that abusive debt collectors contribute to homes being shattered and divorces being filed? All debt collectors deny this but Congress found "abundant evidence" that the pressures that can result from illegal debt collection can destroy marriages. Hardly "technical" violations like the debt collectors like to say....
We believe people who have the ability should work, right? Debt collectors like to talk about "dead beats who don't work" but they refuse to take responsibility for destroying people's lives by causing debtors to lose their jobs. Collectors know, especially in this economy, that if they can threaten someone's job, that person is much more likely to pay even debts that they don't owe. Congress found that the "abusive, deceptive, and unfair debt collection practices" contributes "to the loss of jobs." Again, this is not sounding like a minor matter, is it?
Do you value your privacy? Do companies value their privacy? Sure. We have security measures (locks on doors, companies have badges to get access to the building, etc) to protect our privacy. For someone to go through our file cabinet at home is a horrible invasion of privacy. Or for someone to post our medical records on the internet would be an invasion of our privacy. But Congress found that the "abusive, deceptive, and unfair debt collection practices" contributes "to invasions of individual privacy. This is often done through the rampant problem of illegal third party contacts.
So when debt collectors dismiss violations of this federal law as "no big deal" remember that Congress said that these violations result in:
1. Personal bankruptcies;
2. Marital instability;
3. Loss of jobs; and
4. Invasions of personal privacy.
OK, well why did Congress have to step in? Why not just allow the state laws to protect consumers around the country? Because in subsection (b) Congress found "Existing laws and procedures for redressing these injuries are inadequate to protect consumers." So, the FDCPA is absolutely necessary to prevent abuses that result in those four negative effects (bankruptcies, marital instability, loss of jobs, and invasions of privacy) as the existing state laws (including Alabama) were and are inadequate.
Well, collectors will say (with a straight face somehow) that if they are not allowed to abuse consumers then they will not be able to collect debts and the whole economy will come crashing down. Is this true?
Subsection (c) says "No" as Congress found "Means other than misrepresentations or other abusive debt collection practices are available for the effective collection of debts."
Congress is saying "Look, you can collect debts. You can be very effective in collecting debts. But there are ways to do this without abusing consumers and lying to consumers."
In what business do you have leaders of companies and the industry saying "Well, we know we break the law but we sure hope that you understand we do this because we have to. Those pesky laws just get in our way and we certainly don't want federal judges holding us to the highest law in this land. That would be unfair!" This kind of attitude is in part the reason why our economy is in the mess that it is in - mortgage companies couldn't be bothered to follow the law and now they want to be able to foreclose on consumers even though they are breaking the law.
Debt collectors then will say this is not worthy of federal court as it is a minor dispute between a consumer and a collection agency. But Congress found that abusive debt collection activites "directly affect interstate commerce." This is one of the major requirements often in place for deciding whether Congress can pass a law on the subject. Since abusive debt collection affects the country, Congress can regulate it.
Finally, these abusive debt collectors say it is unfair that private citizens can sue them for violating the FDCPA and all this does is get consumers money and puts money in the pockets of consumer lawyers.
It is true that consumers can recover damages. And it is true that consumer lawyers can be paid attorney fees by the abusive debt collectors.
But it is critical to understand that Congress had two purposes in mind in passing the FDCPA: Stop abusive collection and make sure that honorable law abiding collectors were not at a competitive disadvantage to the abusive collectors.
Let's look at these.
First, by regulating abusive conduct and allowing not only the government but also private citizens to file suit against abusive collectors, this does begin the process of eliminating abusive collection tactics. When collectors start having to spend money for their illegal conduct, they will evaluate whether it is wise to continue to break the law. When they are sued often enough and hard enough and long enough, they will become compliant out of their own self interest.
Second, and this is fascinating, Congress wanted to make sure that honorable collectors were not going to lose in the marketplace to abusive collectors. "[T]o insure that those debt collectors who refrain from using abusive collection practices are not competitively disadvantaged." We want law abiding collection agencies to not be at a disadvantage to cheating collection agencies.
Years ago I received an odd call from a collection attorney who was furious with his competition. The law requires that when a debt collector starts collecting against a consumer that the collector notify the consumer that the consumer has "30 days" to dispute the validity of the debt. [Note you can always dispute the debt - there are just some special things that happen if this is done within the first 30 days].
A competitor stole his collection client by promising to only give consumers "14 days" to dispute. So, the client (a large hospital) switched to this aggressive and abusive collector. This is exactly what Congress meant when it said it did not want law abiding collectors to be at a competitive disadvantage. Imagine if an abusive collector threatened to kill debtor's children - the collection rate would sky rocket for that abusive collector and that is unfair for the collectors who play within the rules.
We have quoted from the text but here is the full version of Section 1692 which is entitled "Congressional Findings And Declaration Of Purpose":
(a) Abusive practices
There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.
(b) Inadequacy of laws
Existing laws and procedures for redressing these injuries are inadequate to protect consumers.
(c) Available non-abusive collection methods
Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts.
(d) Interstate commerce
Abusive debt collection practices are carried on to a substantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate commerce.
(e) Purposes
It is the purpose of this subchapter 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.
In closing this section, if you have any questions or concerns about your rights related to abusive debt collectors, and if you live in Alabama, please feel free to call us at 205-879-2447 or contact us through our website. If you live outside of Alabama, we suggest you look for a local consumer lawyer at the National Association of Consumer Advocates website.
We wish you the best....
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