What the FDCPA is and to Whom It Applies
Are you being contacted by a debt collector? Whether you are behind on payments, or a creditor wrongly thinks you are, you have rights under the Fair Debt Collection Practices Act (FDCPA). Enforced by the Federal Trade Commission, the FDCPA prohibits third-party debt collectors from using particular kinds of collection practices, such as abusive, unfair, or deceptive collection conduct. The Texas Debt Collection Act is similar in many ways to the FDCPA and applies to anyone trying to collect a consumer debt.
Debt collectors may be contacting you about a credit card debt, a car loan, medical bill, mortgage, or any other debt you may have. The FDCPA covers all personal or household debts, but it does not apply to business debts.
Who Are Debt Collectors?
Under the FDCPA, a debt collector is someone, other than the original creditor, who regularly collects unpaid debts. A debt collector could be a lawyer, collection agency, or a company that buys debts and tries to collect them. The FDCPA does not apply to original creditors seeking to collect on their own accounts. But, as mentioned above, many of the protections provided by the FDCPA are also provided by the Texas Debt Collection Act, which does apply to original creditors.
Some examples of debt collectors include:
- Advantage Assets
- Arrow Financial Services, LLC
- Asta Funding Inc.
- B-Line, LLC
- Bluebonnet Financial Assets
- Bureaus Investment Group
- CACH, LLC
- Dan Young
- Ecast Settlement Corp.
- Encore Capital Group
- Equable Ascent Financial
- Global Acceptance Credit Company
- Midland Funding
- NCO Portfolio Management Inc.
- Portfolio Recovery Associates, LLC
- Sherman Financial Group, LLC
- Unifund CCR Partners
A few examples of original creditors are:
- Ally Financial
- American Express
- Bank of America
- Capital One Bank
- Discover Bank
- FIA Card Services
- Ford Motor Credit
- JPMorgan Chase
- Target National Bank
Enforcement of the FDCPA
FDCPA violations are fairly widespread and largely go unreported. If you know your rights, you can fight back when debt collectors violate them. You can sue violators in state or federal court, individually or as part of a class action. You may also file a complaint with the Federal Trade Commission (FTC).
As of February, the FTC brought or resolved seven large debt collection cases within the last year. Four of those involved companies who allegedly used deceptive or abusive collection practices to bully consumers into paying their debts. Three of the seven cases involved collectors who allegedly tried to collect on non-existent debts or debts consumers did not owe to them.
The companies involved in the four cases mentioned include Forensic Case Management Services, Inc./Rumson, Bolling & Associates; Luebke Baker; Goldman Schwartz; and AMG Services, Inc. The alleged activities of these operations are deplorable but unfortunately not uncommon. Just some of the claims include:
- Threatening bodily harm
- Threatening desecration of deceased family members
- Threatening death to pets
- Falsely threatening to garnish wages
- Falsely threatening imprisonment
- Falsely claiming affiliation with law firms
- Using insults
- Charging unauthorized fees
- Masking collector agency identity
Some of these cases continue in litigation, but the FTC has won a $1.1 million dollar judgment and an order banning one collection agency from future debt collection activity.
The other three cases involved American Credit Crunchers, Pro Credit Group, LLC, and Broadway Global Master. In these cases, the defendants allegedly defrauded consumers and collected money that was either not owed or not applied to actual debts. Litigation continues in two of the cases, and the FTC has won a $170,000 judgment in the other.
Additionally, the FTC closed an investigation of RJM Acquisitions, which was collecting on legally unenforceable debt. RJM continues to attempt to collect on the debt, but now the collector discloses to consumers that they cannot be sued on the debt.