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No FDCPA Violation Exists If Settlement Offer Fails to Disclose Accruing Interest

The U. S. Court of Appeals for the Second Circuit held that a debt collector did not violate the FDCPA by sending the consumer a settlement offer letter that did not disclose that his balance could increase due to interest and fees.

In Cortez v. Forster & Garbus, LLP, a creditor placed a consumer’s credit card debt with a debt collector for collection. After obtaining a default judgment, the debt collector sent several collection notices to the consumer.

One such notice provided the consumer various settlement options to satisfy the debt at a “substantial discount off the current balance due.” But, the settlement letter did not disclose that interest was continuing to accrue on the debt.

The consumer filed an action against the collection agency accusing it of violating the Fair Debt Collections Practices Act’s [the “FDCPA”] prohibition against false, deceptive, or misleading representations when collecting a debt, 15 U.S.C. § 1692e, for failing to disclose that interest was accruing on the account.

The Court ruled that, though a debt collector is required to disclose that the balance may increase due to interest and fees, the rule did not apply in this case because the settlement proposal clearly stated that acceptance of one of the options would satisfy the debt, and could not mislead the consumer.

The Cortez decision may limit some potential FDCPA lawsuits, but it does not close the door on all FDCPA lawsuits related to settlement offers.

If you believe that an abusive debt collector, creditor, or credit card company has violated your consumer rights, then Diwan Law can help you. Contact us today at 404-635-6883 to speak to an Atlanta consumer rights attorney.

What is a debt collector

What is a Debt Collector?

A “debt collector,” as defined by the Fair Debt Collection Practices Act [“FDCPA”], is a person or a business that regularly collects debts owed to another. Still, this definition does not fully explain what a debt collector is.

Most first-party creditors [credit card company or bank] or lenders will try to collect debts themselves before resorting to writing it off. Typically, past-due accounts won’t be charged off until they’re 120 to 180 days late.

After a consumer defaults on a loan, the account is sent to a third-party debt collector or buyer [hereinafter referred to as “debt collector”]. The debt collector then attempts to collect on the debt, rather than the first-party creditor or lender to whom the debt is originally owed.

The collection agencies and attorneys who collect these debts as part of their regular course of business are considered debt collectors. Also included are businesses that buy past-due debts from creditors or other companies and then try to collect them.

The debt collection market is significant and affects many people. The Consumer Financial Protection Bureau [“CFPB”] states that around one-third of consumers with a credit bureau file reported contact from at least one debt collector.

The FDCPA is the main federal statute regulating the consumer debt collection market. The FDCPA prohibits debt collectors from engaging in certain types of behavior [such as misrepresentation or harassment] when seeking to collect debts from consumers and grants consumers the right to dispute or stop some communications about an alleged debt.

The Fair Debt Collection Practices Act covers personal, family, and household debts, including hospital bills, credit cards, and car loans.

If a debt collector is contacting you, you need to speak to a consumer’s rights lawyer.

Contact Diwan Law at 404-635-6883 for a free case evaluation.

violations of the fdcpa

Common Violations of the Fair Debt Collection Practices Act

Are you being harassed by debt collectors? Contact Diwan Law today at 404-635-6883 to schedule a free consultation to discuss how the Fair Debt Collection Practices Act [FDCPA] can help you.

When you fall behind on your debts, it seems like your creditors will stop at nothing to try to get you to make a payment. Fortunately, Federal law prohibits a wide range of unfair and abusive debt collection activities.

The Fair Debt Collection Practices Act [FDCPA)] protects consumers from harassment and abusive behavior by debt collectors and collection law firms.

If a debt collector violates the FDCPA, consumers may pursue a lawsuit against the collector. If successful, the consumer is entitled to monetary damages, and the debt collector or collection law firm will also be responsible for the customer’s legal fees.

Typical Violations of the FDCPA:

  • Harassment;
  • Verbal abuse;
  • Continuing to call a consumer after the customer has told the debt collector to stop;
  • Writing or calling the consumer after being notified that a lawyer represents the customer;
  • Threatening to report the consumer to the IRS;
  • Threatening to have the consumer arrested if he or she does not pay the debt collector;
  • Threatening to file a lawsuit against the consumer when none is intended;
  • Calling a consumer’s cell phone without permission;
  • Placing personal information on an envelope;
  • Misrepresenting or inflating the amount of the debt;
  • Failing to disclose that the company is a debt collector;
  • Contacting a consumer after 9 pm or before 8 am;
  • Threatening to take legal action, or sue, on a time-barred or “stale” debt.

If you believe a debt collector has violated the FDCPA, you may be able to take legal action and recover monetary damages. Contact Diwan Law at 404-635-6883 for a free case evaluation.

 

Debt Collection Defense: Violations of the FDCPA

Consumer Rights Attorney: Violations of the FDCPA

If you have been one of the many victims of unlawful debt collection practices, then an experienced consumer rights attorney can protect your rights. Contact Diwan Law today at 404-635-6883 to schedule your consultation to discuss these violations of the FDCPA.

Protection from Unlawful Debt Collection Practices

Debt Collection agencies often employ persistent and overly aggressive tactics when attempting to collect outstanding debts. Many of these tactics are against the law.

Consumer protection statutes prohibit such behavior and allow for the recovery of damages and attorney fees.

The Fair Debt Collection Practices Act [“FDCPA”] specifically prevents these abusive debt collection practices.

Violations of the FDCPA

The Fair Debt Collection Practices Act regulates debt collection practices. It prohibits debt collection companies from using abusive, unfair or deceptive practices to collect debts from you.

Examples of the types of consumer debt covered by the FDCPA:

  • Mortgages
  • Credit cards debt
  • Medical debts
  • Car loans

Courts measure violations of the FDCPA by an objective standard called the “least sophisticated consumer” standard. See Jeter v Credit Bureau Inc., 754 F.2d 907, 913 (11th Cir., 1985).

FDCPA Restrictions on communications by debt collectors with Consumers when collecting a debt

  • Time and placedebt collectors may not contact you at an unusual time or place. [Generally speaking, they are prohibited from contacting consumers before 8 a.m. or after 9 p.m.]
  • Harassment- Debt collectors may not harass you over the phone or through any other form of contact.
  • Representation by an attorney- A debt collector may not contact you if a lawyer is representing you.

Examples of FDCPA violations in collections lawsuits

  • Prosecuting a Lawsuit Against A Consumer After the Statute of Limitations Expires

Continuing to prosecute a time-barred claim is a violation of the FDCPA’s prohibition against making false and misleading claims about the debt’s legal status. Fair Debt Collection Practices Act, 15 U.S.C. §1692e.

  • False and Misleading Statements About the Amount Owed

It is a violation of the FDCPA’s to file a lawsuit against a consumer for more than is owed. This action is a direct violation of the FDCPA’s prohibition against false or misleading statements. 15 U.S.C. § 1692e.

If you believe that an abusive debt collector has violated your consumer rights, then Diwan Law can help you. Contact us today at 404-635-6883 to learn more.