Can I Sue A Debt Collector In Small Claims Court

Can I sue a debt collector in small claims court?

Yes, you can take legal action against a debt collector or a debt collection agency if they engage in abusive, deceptive, or unfair practices.

A debt collector is typically someone who purchases a debt from a creditor who has been unable to collect from a consumer, often at a significantly reduced amount compared to the consumer’s actual debt.

Subsequently, the debt collector pursues the consumer for the full debt amount. In essence, debt collection agencies have a vested interest in your debt, and their profitability hinges on aggressive collection efforts.

This strong incentive to be assertive in their tactics can, at times, result in them crossing the boundaries of legality. In such cases, you have the legal option to file a lawsuit.

Can I Sue A Debt Collector In Small Claims Court

  • The process can feel overwhelming with frequent calls and demanding letters.
  • The constant communication can lead to anxiety and discomfort.
  • Phone calls and mail may become sources of dread.
  • You have protection through the federal Fair Debt Collection Practices Act (FDCPA).
  • Debt collectors and collection agencies must follow strict rules when pursuing debts.
  • State laws may also provide additional remedies for you.

What Is The Fair Debt Collection Practices Act (FDCPA)?

  • Congress recognized that many debt collectors engaged in harmful practices, which could lead to personal bankruptcies, marital issues, job losses, and invasions of consumer privacy.
  • Consequently, they passed the FDCPA to curb such behavior.
  • The FDCPA specifically targets debt collectors and debt collection agencies involved in the collection of consumer debts, which encompass various types such as mortgage payments, credit card debt, medical bills, student loans, homeowners’ association dues, dishonored checks, residential rent, and water/sewer bills.
  • It’s essential to note that the statute does NOT pertain to taxes, business debts, or child support obligations.
  • Additionally, it doesn’t prevent a creditor from attempting to collect its own debt; its focus is primarily on regulating third-party debt collectors and debt collection agencies.

 Expected Behavior of Debt Collectors

Can I sue a debt collector in small claims court? When Legal Action Is Not an Option, the FDCPA mandates that debt collectors must:

  1. Clearly identify themselves as debt collectors.
  2. Disclose during the first communication with you that the information they gather is intended for debt collection.
  3. Specify the name and address of the creditor to whom you owe the debt.
  4. Inform you about your right to dispute the debt within 30 days (referred to as a “Section 1692g Notice” by lawyers).
  5. Furnish validation of the debt upon request.

Prohibited Actions by Debt Collectors

The FDCPA explicitly forbids debt collectors from engaging in various harassing activities, including:

  1. Making phone calls outside the hours of 8:00 a.m. to 9:00 p.m.
  2. Using offensive language or swearing during communications.
  3. Providing false information or lying to you.
  4. Falsely claiming to be a lawyer.
  5. Continuing to contact you after receiving a written request within 30 days of initial contact to cease communication, dispute the debt, or request debt validation.
  6. Excessively calling and causing your phone to constantly ring.
  7. Contacting you at your workplace, even if you or your employer has requested them not to.
  8. Sending postcards as a means of communication.
  9. Reaching out to anyone other than your attorney if you have one.
  10. Adding your name to a “bad debt” list.
  11. Threatening to report false information to a credit reporting agency.
  12. Threatening legal action without the genuine intent or right to do so.
  13. Threatening repossession of property without the genuine intent or right to do so.

Reasons to Take Legal Action:

Consumers who opt to file lawsuits against debt collectors and debt collection agencies frequently raise the following claims:

  1. Improper communications, such as calling outside permissible hours, contacting you at work despite your request not to, and reaching out directly when you have legal representation.
  2. Harassment or abuse, including threats of violence, use of profane language, listing your name as someone who doesn’t pay their bills, repetitive harassing calls, and attempting to coerce payment by advertising the debt for sale.
  3. False or misleading representations, such as misrepresenting their identity or providing inaccurate debt details.
  4. Unfair practices, such as threatening to cash a postdated check prematurely, claiming an intent to repossess property without justification, and making collect calls that result in unnecessary charges.
  5. Improper or incomplete disclosures, like failing to inform the consumer of their right to dispute the debt, concealing the creditor’s identity, and neglecting to mention that the debt must be disputed within thirty days, or it is presumed valid.
  6. Improper payment processing, such as not applying a payment as instructed or applying it to a disputed debt.

Common Defenses Raised by Debt Collectors in a Lawsuit:

  1. Sophistication and Risk Mitigation: Debt collection agencies typically employ practices aimed at minimizing legal exposure, including robust compliance management systems and stringent record-keeping for purchased debts.
  2. Challenging Liability: When facing a lawsuit, debt collectors may argue that the consumer cannot prove a violation of the statute, placing the burden of proof on the consumer.
  3. “Bona Fide” Error: Debt collectors might claim that any errors made were “bona fide” or made in good faith, potentially seeking to excuse their actions.
  4. Reasonable Procedures: Debt collectors could assert that they have implemented reasonable procedures to prevent errors, which may involve elements such as compliance training, audits, document disposal protocols, and regular software updates and training.
  5. Statute of Limitations: Debt collectors may argue that the consumer filed the claim too late, highlighting that there is a one-year limitation period from the date of the alleged violation to bring a lawsuit.

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