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The debt collector may just be liable to you for statutory damages of up to $1,000, plus any actual damages suffered, plus attorney fees!
Deceptive debt collection
letters and forms - Section 812
Collection letters and dunning notices. Section
812 prohibits any party from designing and furnishing forms, knowing they are,
or will be used to deceive a consumer into believing that someone other than
the creditor is collecting the debt. This section of the FDCPA imposes civil
liability on parties who supply illegal collection letters and forms.
- False collection/dunning letters
- Who this section applies to
- Misleading/False pre-collection
letters.
- When selling collection forms does not violate
this provision
- When debt collection letters do NOT violate this
section
- Liability for violating this section
- Sample Debt Collection
Letter
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1. False collection/dunning letters
This section prohibits the practice of selling to creditors
dunning letters that falsely imply that a debt collector is participating in
collection of the debt, when in fact only the creditor is collecting.
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2. Who this section applies to.
This section applies to anyone who designs, complies, or
furnishes the forms prohibited by this section.
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3. Misleading/False pre-collection letters.
A form seller may not furnish a creditor with
(1) a letter on a collector's letterhead to be used when the
collector is not involved in collecting the creditor's debts, or
(2) a letter indicating "copy to (the collector)" if the
collector is not participating in collecting the creditor's debt.
A form seller may not avoid liability by including a statement
in the text of a form letter that the sender has not yet been assigned the
account for collection, if the communication as a whole, using the collector's
letterhead, represents otherwise.
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4. When selling collection forms does not violate this
provision
A party does not violate this provision unless he knows or
should have known that his form letter will be used to mislead consumers into
believing that someone other than the creditor is involved in collecting the
debt.
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5. When Debt Collection letters do NOT violate this
section
A debt collector that uses letters as his only collection tool
does not violate this section, merely because he charges a flat rate per
letter, if he is meaningfully "participating in the collection of a debt." The
consumer is not misled in such cases, as he would be in the case of a party who
supplied the creditor with form letters and provided little or no additional
service in the collection process. The performance of other tasks associated
with collection (e.g., handling verification requests, negotiating payment
arrangements, keeping individual records) is evidence that such a party is
"participating in the collection."
Up 6. Liability for
violating this section
Any person who violates this section shall be
liable to the same extent and in the same manner as a debt collector is liable
under section 813 for
failure to comply with a provision of this title.
Some debt collectors use official-looking forms
that appear to be from a court, police agency, State or Federal agency and so
forth to intimidate consumers.
This practice is strictly prohibited!
If a consumer discovers a debt collector using
such illegal tactics, they may be able to sue the collector in civil court for
substantial damages. See (civil
liability - section 13)
Sample Debt Collection Letter
|
404 Liberty Street
Trenton NJ, 08650
August 16, 2002
Creditor: McKorner Furniture
$2700
Account Number.
123456789
Dear Mr. Nopay
As of today you have not voluntarily responded to our
efforts to collect the overdue payments on the above account. Therefore we must
advise you that we have prepared a lawsuit which will be filed against you in
exactly 7 days from the date of this letter if we have not heard from you
within that time frame.
We must also advise you that we fully intend to pursue
garnishment of wages, liens against property, and the attachment of all
financial assets and that the cost of these actions, the lawsuit and any
statutory interest charges will be added to the amount owed
above.
Sincerely,
Bill A. Collector |
Can you spot the FDCPA violation in the above
letter?
Deceptive Statements or Threats are Common FDCPA Violations:
The federal Fair Debt Collection Practices Act (FDCPA) provides
that "[a] debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any debt. .". 15
U.S.C. 1692e.
Yet deceptive threats are among the most common
violations of the FDCPA!
In the above letter there are four specific violations:
- It's illegal (considered deceptive) to threaten a lawsuit in
seven days when the suit will not (or cannot) be filed for several
weeks;
- No lawsuit was actually intended at the time it was threatened
(in other words bluffing);
- The threat of garnishment without mentioning exemptions that
protect wages and other property from seizure; and
- Suggesting that the loss of all property was inevitable.
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