Common FDCPA Violations From a Plaintiff's Perspective

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August 09, 2018

1. Collecting Attorney Fees When Not Authorized By Contract
Ex: C gets medical treatment from North Hospital. C signs a contract with North Hospital and agrees to pay the hospital's attorney fees. North Hospital refers to C to Dr. Smith and no contract is signed between C and Dr. Smith. C doesn't pay Dr. Smith's bill, and Dr. Smith assigns the debt to ABC collections, who demands that C pay $450 in attorney fees. Can Dr. Smith "piggyback" off North Hospital's contract for attorney fees? Probably not, and violates 1692f(1).

2. Overinflating the Amount of Attorney Fees
Ex: ABC Collections demands $450 in attorney fees from C either via phone, letter or in the lawsuit itself. In deposition, the attorney for ABC testifies that he doesn't know what his hourly rate is, doesn't have billing records, and the only work any attorney ever did on the file was to sign the summons and complaint. If true, this will violate the FDCPA. See e.g. Account Brokers of Larimer County, Inc. v. Golden, Larimer District Court, 12cv1429 (court holding that if Plaintiff's allegations are true, it would violate FDCPA).

3. Collecting Court Costs When No Lawsuit is Filed
Ex: ABC Collections has C served with summons and complaint, but doesn't actually file it with the Court. ABC demands that C pay the $92 filing fee, plus the amount of the debt. This happens a lot - must train collectors that filing fee is not collectable unless lawsuit is actually filed first. Colorado is one of only states that allows "serve first, file later" method.

4. Never Filing Lawsuit
Ex: ABC Collections has C served with summons and complaint, but then never files it with the Court. C takes off of work to show up on return date and file an answer. Court clerk cannot figure out who C is or why she's at the courthouse. This will probably violate the FDCPA.

5. Using the Wrong Credit Cardholder Agreement
We see this all the time. C had a credit card with U.S. Bank, N.A. and ABC debt buying attaches a credit cardholder agreement from U.S. Bank of Kentucky, a totally separate company, and more importantly, not the company who extended credit. Some banks also have multiple cards, each card has its own agreement. Why do we care? The interest rates, late fees, and over the limit fees may be different, which means the debt collector has probably violated 1692e(2) and 1692f(1) by seeking the wrong amounts.

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6. False Affidavits Filed in Collection Cases
Ex: C is an identity theft victim. ABC debt buyer buys a credit card account from USA Bank, which was opened and used by the identity thief, not C. ABC's employee signs an affidavit swearing to personal knowledge that C opened the account, used the account and has no defenses to the amount of the debt.

If not perjury, this will violate the FDCPA so long as C can prove that the thief used the money for personal, family, or household purposes.

One district court has held that it may be a FDCPA violation where a debt collector sues a debtor in bad faith, or where the debt collector “knew or should have known” that the affidavits supporting the lawsuit were false or that the affiant “lacked personal knowledge” of the matters to which he or she attested. Williams v. Javitch, Block & Rathbone, LLP, 480 F.Supp.2d 1016, 1022 (S.D.Ohio 2007).

Delawder v. Platimum Fin. Serv. Corp., 443 F.Supp.2d 942 (S.D.Ohio 2005) (an affidavit attached to the debt collector's complaint misrepresented the amount of the debt collector's claim) Simmons v. Portfolio Recovery Associates, LLC, 2012 WL 222935 *5 (E.D. Tenn. 2012) (the affidavit by PRA contains false statements made without personal knowledge.)

7. Voicemails
Best Practice: Don't Leave Them!
Consider the following message: "We're calling for Mr. Jones about an important business matter, please call us back at 1-800-555-5555." This message will violate 1692e(11) for not disclosing call is from a debt collector.

The alternative example: Bill Jones is hosting a party at his house and he has the type of answering machine that plays out loud as the caller is leaving a message. ABC Collections calls and leaves the following message on Bill Jones voicemail: "This message is for Bill Jones ... by listening to this message, you acknowledge that you are Bill Jones. There will now be a 3 second pause ... Bill Jones, this is ABC collections calling to collect $935 on your USA bank card. this is a debt collector. please call us back."

This message will likely violate 1692c(b). by disclosing to third parties. If a 3rd party hears this message, even if the 3rd party does not hang up after the 3 second pause, Courts are finding this message to be a violation.

Courts routinely reject debt collector's "between a rock and a hard place" arguments: The Court is aware that this ruling will make it difficult, though perhaps not impossible, for debt collectors to comply with all of §§ 16992c(b), 1692d(6), and 1692e(11) at once in a message left on the consumer's voice mail. However, we ... find no reason that a debt collector has an entitlement to use this particular method of communication. Debt collectors have other methods to reach debtors including postal mail, in-person contact, and speaking directly by telephone. Leahey v. Franklin Collection Service, Inc., 756 F.Supp.2d 1322 (N.D.Ala.,2010).

8. Not Sending the Notice Required Under 1692g
Some debt buyers simply sue the consumer without sending a letter or calling first. The summons and complaint is not considered the "initial communication". 1692g(d). However, if the consumer calls the debt buyer upon receiving the summons and complaint, the phone call will be the "initial communication" triggering the disclosure requirements under 1692g(a). A surprising number of collection agencies do not retain a copy of the notice required by 1692g(a) that they allegedly sent to the consumer. This will likely create an issue of fact if the actual notice sent is unable to be produced.

9. Process Servers - Generally
As long as a process server is just serving someone with papers, they are not a "debt collector" under the FDCPA. 15 U.S.C. § 1692a(6)(D). However, if the process server does things like try to set the person up on a payment plan, requests employment information, or tries to arrange a phone call between the collection agency and the debtor, they might transform from being a process server to a "debt collector". Flamm v. Sarner & Assoc. P.C., No. 02 Civ. 4302(LAR), 2002 WL 31618443, at *5 (E.D.Pa. Nov. 6, 2002). This will create a whipsaw of FDCPA disclosure violations under 1692e(11) and 1692g, among other violations for the abusive conduct.

Also, simply because a process server is not subject to the FDCPA does not mean a process server is not subject to other causes of action, such as RICO, invasion of privacy, and extreme and outrageous conduct.

There might be vicarious liability for the collection agency, especially if the collection agency knew of the process server's conduct or requested the process behave in a certain manner. See Sykes v. Mel Harris and Associates, LLC, 757 F.Supp.2d 413 (S.D.N.Y. 2011) (allowing RICO and FDCPA claims to go forward against process server and vicarious liability against debt collector)

10. Possible Process Server Violations
Sewer Service - signing an affidavit saying you served the person when you actually did not. "Failing to serve process and perjuring affidavits of service also violates the FDCPA." Spiegel v. Judicial Attorney Servs., Inc., No. 09 C 7163, 2011 WL 382809, at *1 (N.D.Ill. Feb.1, 2011). The Court also held that the process server exemption did not apply because the process server never actually served the consumer.

We routinely see cases where the affidavit says the consumer was served, but the description is way off, i.e. the description says the person served is white, but the consumer is black, or vice versa, or the age is listed as 25 and consumer is 70. Or the affidavit says the consumer was served at his residence, when the consumer was actually incarcerated or on vacation at the time. Pretending to be a police officer or law enforcement and telling the consumer they will be arrested if they don't set up a payment arrangement with the collector.

Going to the neighbors and telling them that the consumer is a debt beat who doesn't pay their bills. Banging on the door for hours and screaming obscenities. (extreme and outrageous conduct). Using profanity when serving, coupled with a demand for payment, i.e. "you better call the attorneys and set up a payment plan you stupid bit*$" (this statement could make you a debt collector, or could be extreme and outrageous conduct).

11. Credit Reporting Violations
Most common violation is failing to mark the credit report as disputed. 15 U.S.C. § 1692e(8). Note that the consumer could notify the collection agency that the debt is disputed in a number of unconventional ways, i.e. by filing an answer to the lawsuit or via phone call rather than written letter.

12. Collecting Wrong Amount of Post-Judgment Interest
Shepherd v. Liberty Acquisitions, LLC, 2012 WL 2708518 (D.Colo.,2012) (collecting 23.9% in post-judgment interest when the cardholder agreement did not state any percentage at all).

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