A sudden increase in FDCPA lawsuit filing against unfair practices of debt collection has been noted in recent times. Over 850 different debt collection agencies and creditors were named in about 950 distinct consumer statute lawsuits in May 2010. And the figures are estimated to shoot up even higher by the end of 2010.
Most of the consumer complaints relate to FDCPA violations and harassment inflicted by the creditors and the collection agencies. Some of the common charges that consumers repeatedly bring against creditors and debt collectors are use of abusive language, threats of violence or of sending debtors to jail, third-party disclosure etc. Among other things there are attempted forced payment on time-bound debts, debts discharged in bankruptcy and debts not owed by the individual contacted.
The statistics seem shocking indeed! More shocking is the fact that despite the “stringent” provisions established by the FDCPA and the other creditor harassment laws set forth by the individual state governments, debt collection agencies grab every scope for advancing illegal collection practices. Illegal collections continue to grow with leaps and bounds. At least the soaring figures of lawsuit filings speak so!
One of the very probable reasons behind this is perhaps the archaic nature of the FDCPA. Many consumer complaints are related to violations of FDCPA provisions that are not significantly different today than when they were enacted in 1977.
The FDCPA was enacted way before the emergence of cell phones, e-mail and auto dialers. Therefore, it remains unclear as to how and whether the law is applicable in cases of collection abuse that involve such technological innovations. As such the FDCPA laws prohibit the creditors/debt collectors from repeatedly contacting debtors for payment procurement, and also from placing calls without meaningful disclosure of the callers’ identities.
However, the concept of auto-dialing and cell phones have added a brand new dimension to these debt collection processes. In fact, emergence of information technology has more boldly underlined the FDCPA loopholes. Usage of cell phones, e-mails, auto-dialing have led to excessive and redundant communication initiated by the debt collector for the purpose of debt procurement. In some cases, the creditors even go to the extent of imposing a per call charge on the debtor’s cell phone number. All of these often amount to acute harassment and compel thousands of debtors to lodge complain with the Federal Trade Commission. But the dubious overtones of the FDCPA leave the debtors baffled in such cases with legal twists.
Illegal debt collection also sprouts from the debt collectors’ ignorance. Often the original creditors are found to sell off the “written off” accounts to the collection agencies without informing the debt collector about the real nature of the account. It leaves most debt collectors into a maze of ignorance even about the legitimacy of the debt. And it further results in attempts of collecting debts which are legally not subject to collection.
Lack of up-gradation has thus proven the most gaping crack in the law. And the worst part is that the fissure has developed into a great escape route for debt collectors indulging in con collection activities.
Various consumer advocacy groups opine that it is imperative to upgrade the FDCPA provisions in compliance with the temporal and technological progress. Besides, tougher enforcement procedures and stricter penalties for law violation also need to be implemented right now, in the interest of the consumers.
But most importantly, consumers too need to be aware of the host of rights that protects them under the state and federal law. After all, a legally conscious and responsible consumer can make the law implementation procedure all the more easy and can effectively keep the rising collection agency abuses at bay.