WHAT IS THE FAIR DEBT COLLECTION PRACTICES ACT?

In 1968, Congress passed the Federal Fair Debt Collection Practices Act to:

·         eliminate abusive debt collection practices by debt collectors,

·         to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and

·         to promote consistent State action to protect consumers against debt collection abuses.

The purpose of the Federal Fair Debt Collection Practices Act is to protect consumers from a host of unfair, harassing, and deceptive debt collection practices.  The Federal Fair Debt Collection Practices Act seeks to protect debtors from abuse since there was abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs and to invasions of individual privacy.  Designed “to have a broad remedial scope,” the Federal Fair Debt Collection Practices Act protects consumers -- natural persons obligated to pay any debt by creating debt collection rules and prohibiting objectionable debt collection practices.   The Federal Fair Debt Collection Practices Act prohibits debt collectors from committing various acts, including using “any false, deceptive, or misleading representation or means in connection with the collection of any debt” and using “unfair or unconscionable means to collect or attempt to collect any debt.”   The Federal Fair Debt Collection Practices Act is a strict liability statute.  Therefore, to recover damages, a consumer need not show intentional, fraudulent, or knowing violations of the Federal Fair Debt Collection Practices Act.  The debt collector's state of mind is only important in the damage award analysis once a violation has been proven or as part of a debt collector's affirmative defenses to a lawsuit.   Since it is a consumer protection law, the Federal Fair Debt Collection Practices Act is "liberally construed in favor of consumers to effect its purpose.”

WHAT IS A “DEBT” UNDER THE FEDERAL FAIR DEBT COLLECTION PRACTICES ACT?

The Federal Fair Debt Collection Practices Act defines “debt” as any obligation on the part of a consumer to pay money "arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment." For example, rent – money paid periodically to use or occupy property – is a “debt” under the Federal Fair Debt Collection Practices Act. 

WHO IS A CREDITOR UNDER THE FEDERAL FAIR DEBT COLLECTION PRACTICES ACT?

Under the Federal Fair Debt Collection Practices Act, the word "creditor" is defined as

any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.

TO WHOM DOES THE FEDERAL FAIR DEBT COLLECTION PRACTICES ACT APPLY?

The FDCPA defines “debt collector” as “any person . . . who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”  Under the FDCPA, the definition of the term "debt collector" points primarily to two types of independent debt collectors: (1) people who use any instrumentality of interstate commerce or the mails in any business the primary purpose of which is the collection of debts; and (2) people who regularly collect or attempt to collect, directly or indirectly, debts owed to another.   Generally speaking, any person who regularly collects or attempts to collect, directly or indirectly, debts owned or due or claimed to be owed or due another is a "debt collector" under the Federal Fair Debt Collection Practices Act.  Individual employees, partners, or corporate officers fitting within the law’s definition of "debt collector" and who actively and personally violate the Federal Fair Debt Collection Practices Act, may be held jointly and severally liable along with the debt collection agency for whom they work.  A debt collection company must generally answers for its employees' or agent's violations of the Federal Fair Debt Collection Practices Act.  

The Federal Fair Debt Collection Practices Act applies only to independent debt collectors; it does not generally apply to bill creditors collecting their own debts from consumers.   For example, if a bank collects their own bills, the Federal Fair Debt Collection Practices Act does not apply to that activity.  In one case, a bank made harassing telephone calls in trying to collect a VISA account but since the bank was attempting collection for itself and not for others, it was not responsible for violating the Federal Fair Debt Collection Practices Act.  On the other hand, if a bank hires a collection agency or attorney to collect their bills and that collection agency or collection attorney violate fail to follow Federal Fair Debt Collection Practices Act, the collection agency or collection attorney may be responsible for the bill.   Litigating attorneys who regularly attempt to collect debts are subject to the Federal Fair Debt Collection Practices Act.  Many attorneys violate the Federal Fair Debt Collection Practices Act.   A law firm or attorney that regularly files summary dispossess actions for nonpayment of rent is a debt collector under the FDCPA.

WHAT RIGHTS DO THE FEDERAL FAIR DEBT COLLECTION PRACTICES ACT PROVIDE TO DEBTORS?

Below is a discussion of some of the rights provided consumers and restrictions imposed on debt collectors under the Federal Fair Debt Collection Practices Act:

Communications With Debtors Regulated -- the Federal Fair Debt Collection Practices Act regulates the manner and time within which a debt collector may communicate with a consumer for the collection of a debt as to the collection of a debt prior to the institution of an action against the consumer debtor.  The Federal Fair Debt Collection Practices Act defines a “communication” as the conveying of information regarding a debt directly or indirectly to any person though any medium.

Misrepresentations Forbidden -- Under the Federal Fair Debt Collection Practices Act, a debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.

Collection of Unauthorized Debts Forbidden – It is an unfair or unconscionable collection practice for a debt collector to collect any amount, including any interest, fee, charge, or expense incidental to the principal obligation, unless that amount is expressly authorized by the agreement creating the debt or permitted by law.

Disclosures Required – The debt collector’s first communication to the debtor must have an initial warning that the debt collector:  (1) is in fact a debt collector; and (2) that any information the debt collector obtains shall be used to collect the debt (often called the "mini-Miranda" warning).  Within five days after the debt collector’s "initial communication," the debt collector must give notice to the debtor that includes certain details about the debt, notice that the debtor has a 30-day period to dispute the debt, inquire about the original creditor and/or obtain a copy of a judgment issued against the consumer.   More specifically, the consumer must be provided with the following information:

·         the amount of the debt;

·         the name of the creditor to whom the debt is owed;

·         a statement that unless the consumer, within 30 days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

·         a statement that if the consumer notifies the debt collector in writing within the 30-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

·         a statement that, upon the consumer's written request within the 30-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

Notice of Dispute Period -- The Federal Fair Debt Collection Practices Act establishes a 30 day dispute period within which a consumer may question the validity of a debt.   The debt collector must send the consumer debtor a written notice containing a statement that unless the consumer debtor, within 30 days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the collector will assume the debt is valid. That period begins after the consumer debtor receives an appropriate communication, often the initial communication, from the debt collector.   This notice must state that, if the consumer debtor timely notifies the debt collector in writing that the debt is disputed, in whole in or in part, the debt collector must obtain verification of the debt or a copy of a judgment against the consumer debtor and that the debt collector must mail a copy of such verification or judgment to the consumer debtor.  If the consumer debtor provides timely notice that the debt is disputed, the debt collector must If the consumer debtor disputes the debt in writing within the 30 day timeframe, the debt collector “shall cease collection” until the debt collector mails the consumer debtor verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor.   Therefore, the Federal Fair Debt Collection Practices Act allows a consumer to temporarily halt debt collection by disputing the debt but also permit a debt collector to resume collection efforts by verifying the debt.   Under the Federal Fair Debt Collection Practices Act, the summons and complaint cannot trigger a debt collector’s notice obligations.   The Superior Court of New Jersey analyzes a debt collector's actions under the "least-sophisticated debtor" standard.  Under this objective standard, the question isn’t whether the consumer debtor is actually deceived or misled but instead, whether an unsophisticated consumer would have been mislead.  For, Congress intended the Federal Fair Debt Collection Practices Act to protect all consumers, whether gullible or shrewd.  The Federal Fair Debt Collection Practices Act thereby ensures the protection of all consumers, even the naive and the trusting, against deceptive debt collection practices and protects debt collectors against liability for bizarre or idiosyncratic interpretations of collection notices.  The “least sophisticated consumer” is presumed to possess a rudimentary amount of information about the world and a willingness to carefully read a collection notice.

Limits to where certain debt collection lawsuits may be filed -- To further the goal of protecting consumers, the Federal Fair Debt Collection Practices Act provides that, with the exception of actions concerning real estate, debt collectors must file collection lawsuits where the consumer debtor lives or where the contract creating the debt was signed.  This provision of the Federal Fair Debt Collection Practices Act seeks to minimize the perceived imbalance of power between debtors and creditors by requiring lawsuits for consumer debt actions to be filed in a location convenient to the consumer debtor.

HOW DO I PROVE THAT A DEBT COLLECTOR VIOLATED THE FEDRAL FAIR DEBT COLLECTION PRACTICES ACT.

To establish a violation of the Federal Fair Debt Collection Practices Act, a consumer must prove, at a minimum, the following:

·         the claimant is:

o    any natural person who is harmed by violations of the FDCPA; or

o    when the claim is for making a communication in connection with debt collection, a "consumer" as defined by the Federal Fair Debt Collection Practices Act; or

o    when the claim is for the debt collector’s failure to provide the consumer with the "mini-Miranda" warning, a "consumer" as defined by the Federal Fair Debt Collection Practices Act; and

·         the "debt" comes from  a transaction entered primarily for personal, family, or household purposes;

·         the party collecting the debt is a "debt collector" within the meaning of the Federal Fair Debt Collection Practices Act;

·         the debt collector violated, either by an act or by an omission, a section of the Federal Fair Debt Collection Practices Act.

WHAT TYPE OF DAMAGES CAN A CONSUMER RECOVER UNDER THE FEDERAL FAIR DEBT COLLECTION PRACTICES ACT?

Debt collectors violating the Federal Fair Debt Collection Practices Act is liable for actual damages, plus costs and reasonable attorney's fees, as well as any other damages not exceeding $1,000 found appropriate by a trial court. Because the Act imposes strict liability, a consumer need not show intentional conduct by the debt collector to be entitled to damages. However, a debt collector may escape liability if it can demonstrate by a preponderance of the evidence that the Federal Fair Debt Collection Practices Act violation was unintentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

CAN I HANDLE A FEDERAL FAIR DEBT COLLECTION PRACTICES ACT CASE MYSELF?

Some people can and do successfully handle cases themselves, from filing the first paperwork to the court’s final decision on the appeal.  The court normally has forms available on the worldwide web.  However, neither court forms, websites nor advice from court personnel are good substitutes for a competent attorney’s legal services.  Each case has its own particular legal issues and therefore, its own challenges.   If you can afford an attorney, it is best to have the attorney perform the steps necessary to take an appeal.  Cases require those involved in the appeal (or their attorneys, if they are represented) to file strict deadlines and rules and failure to do so could result in fines or having the appeal dismissed temporarily or forever.  The following are additional reasons to use an attorney to handle part or all of your case:

·         court fees often change

·         court rules often change

·         court employees cannot give you “free” legal advice and a judge may refuse to let you claim that you were right in taking an action (or in deciding not to take action) because you relied on advice from such employees

·         court forms available on websites may not cover every situation you may face in court

·         each case has its own particular legal issues and therefore, its own challenges

·         it is very common for people to file inadequate or incorrect complaints that result in the complaints or answers to complaints being rejected by the court or being dismissed by the court after filing and before or after trial because of procedural deficiencies   

·         it is not uncommon for judges to get very frustrated by an unrepresented party’s lack of preparation or ignorance of the facts or law of the case. 

·         a court has the power to punish unprepared parties or parties who make mistakes, such as by throwing their case out of court or limiting what they can present at trial. 

·         New Jersey has many published cases, laws, regulations, court rules and rules of evidence that are very tricky and that can be used to prevent you from doing much of what you want to do at trial. 

·         it is very common for courts to refuse to allow a party to use or refer to documents or items at trial that the person themselves never prepared.  Often parties stumble into court with a video, photograph, bill or affidavit or other form of written statement, thinking they are going to use it as proof that they lost money or that they are not responsible for someone else’s damages, only to have a judge tell the parties that it is not going to even consider such items or documents. 

·         without the proper preparation, items and documents may never be considered by the court.  Also, if there are any legal issues to be dealt with at trial, you must be prepared to argue them, which may require you to refer to court rules, evidence rules, laws, regulations or published cases. 

·         you cannot show up at court expecting the judge hearing your case to explain court rules, evidence rules, court procedure or the details of the law that applies to your case.  The judge hearing your case is not permitted to give you legal advice.

It is important to remember that even if you have an attorney, you could lose your case.  Hiring an attorney to handle part or all of your case does not guarantee your success.  However, it may provide the assistance you need to win your case, to settle your case or to avoid certain mistakes.

DOES THE LAW OFFICE OF PAUL DEPETRIS HAVE EXPERIENCE HANDLING DEBT COLLECTION CASES?

Yes.  Paul DePetris has performed the following tasks:

·         represented both plaintiffs and defendants in debt collection cases across New Jersey, from Bergen County to Cumberland County, including representations of individuals, small businesses and large corporations, including banks and credit card companies.

·         prepared and filed many collection complaints

·         tried nonjury trials in the Superior Court of New Jersey, Special Civil Part

·         tried jury trials in the Superior Court of New Jersey, Special Civil Part and Law Division, Civil Part

·         mediated debt collection cases

·         served as a voluntary court mediator for the Superior Court of New Jersey, Special Civil Part, Burlington County, where he successfully assisted parties to lawsuits to settle their cases before they went to trial

·         argued motions in the Superior Court of New Jersey, Special Civil Part and Law Division, Civil Part

·         handled Superior Court of New Jersey, Special Civil Part proof hearings and Law Division, Civil Part proof hearings

·         handled default judgment motions and motions to vacate default judgments in Superior Court of New Jersey, Special Civil Part proof hearings and Law Division, Civil Part

·         handled Superior Court of New Jersey, Special Civil Part and and Law Division, Civil Part post judgment collection proceedings

·         prepared served information subpoenas.

·         prepared and argued motions to enforce litigant’s rights.

·         prepared and argued motions to turnover funds levied.

·         argued motions for wage executions.

Mr. DePetris has appeared before the Superior Court of New Jersey in the following counties:

 Mr. DePetris has also appeared in federal courts - the District of New Jersey in Camden, Trenton and Newark and in the Eastern District of Pennsylvania.

WHAT IF I DON’T HAVE ENOUGH MONEY TO HIRE AN ATTORNEY TO HANDLE MY CASE FROM BEGINNING TO END?

In many situations, the Law Office of Paul DePetris offers alternatives to handling debt collection cases for an hourly fee, such as by offering to prepare the court paperwork for you or helping you handle your claim by yourself.  Such flexible methods may allow you to keep the amount legal fees you spend on your case to a fixed sum, while providing you the help you need to handle your case.  For a no cost phone consultation about what the Firm might be able to do for you, call or write an email to Mr. DePetris at consumerlaw@newjerseylemon.com.