Why would the debt collector have to pay my attorney’s fees under the Fair Debt Collection Practices Act (FDCPA)?

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A common question that we get when we’re dealing with a consumer who is suing an abusive debt collector is, Why would the debt collector have to pay my attorney’s fees under the Fair Debt Collection Practices Act?”

This is a fair question.

It comes down to Normal Rule vs Fee Shifting.

When we’re dealing with Fair Debt Collection Practices Act (FDCPA) or Fair Credit Reporting Act (FCRA), sometimes the debt collector will have to pay for your attorney’s fees as compensation for breaking the law.

Normally in a lawsuit, everyone pays for their own attorney’s fees.

[The only exception would be in a car wreck case, where your insurance would pay for that.]

So, why is this significant?

Because debt collectors would have to pay your attorney fees on top of paying their own lawyers.

That gets expensive.

For example.  The lawyers that typically defend debt collectors who are sued are paid around $250 an hour.  So if they spend 300 hours getting a case ready for trial, that’s about $75,000.

My firm’s hourly rate is $400 (really more but we’ll go with $400 right now), so if we spend the same amount of time (300 hours), then our attorney’s fees are $120,000.

[Note:  you don’t pay us $400 an hour — our fee is contingent but the debt collector may have to pay us the hourly rate — that’s a consequence of them breaking the law].

So the debt collector who has been caught breaking the law (FDCPA) must think long and hard about what to do.

Fight?  They could win but if they lose they pay you damages, pay their attorneys, and may have to pay our bill as well.

Settle early to cut down on the costs?

So you see how this rule encourages the debt collectors to work out a settlement speedily, instead of accumulating more and more attorneys fees they will owe.

It doesn’t make them settle, but it does get them to think.

Contact Us.

If you have any questions, you can call us at 1-205-879-2447.

We also have a contact form you can fill out and we will get in touch with you soon.

Have a great day!

-John G. Watts

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