Texas Consumer Law & Debtor's Rights Blog

As we are all aware the economic downturn has affected a large number individuals across Texas, and throughout the country.  People have become unemployed and unable to keep up with the bills that are piling up.  Of course once you start to get behind on your payments, consumer debtors start to receive collection notices and calls from creditors.  At some point, the original creditor may sale (assign) an unpaid debt to a third-party debt collector such as Unifund CCR Partners or Equable Ascent Financial, LLC.  The third-party debt collector usually buys a portfolio of unpaid accounts receivables from the creditor for a pennies on the dollar.  Thus, there is a huge profit that can be gained by debt collectors if they are able to collect on these consumer debts.   However, sometimes debt collectors will engage in deceitful and abusive debt collection practices.  Many of these practices are used to harass or scare a  consumer debtor into paying off the debt.  Many consumers are unaware that its unlawful for debt collectors to engage in certain prohibited practices.  Many consumers are unaware that if a debt collector engages in these unlawful practices that the consumer may sue the debt collector and bring a cause of action against the debt collector for unfair or deceptive collection practices, even if the consumer is legally obligated to pay the debt for which the debt collector is trying to collect.  The most effective statute employed by consumers and consumer attorneys against unlawful debt collection practices is the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p.

The FDCPA is the federal unfair debt collections practices act.  Just to note, Texas also has it’s own debt collections act, the Texas Debt Collections Act (TCDA).  A consumer may sue under either the FDCPA or TCDA.  Generally, it is better to bring a cause of action under the FDCPA in federal court.  Although, there may circumstances in which a consumer might want to bring both a cause of action pursuant to the FDCPA and TCDA in state court.

A consumer must file a lawsuit under the provisions of the FDCPA in federal or state court within one (1) year from the date the statute was violated.  An individual consumer that prevails in a FDCPA lawsuit is entitled to recover actual damages, statutory damages up $1,000, plus attorney’s fees and court costs.  A group of consumers may also sue a debt collector pursuant to the FDCPA by bringing a class action lawsuit.  A consumer class that prevails in a FDCPA class action lawsuit may recover damages up to $500,000 or one (1) percent of the debt collector’s net worth, which ever is less.

Under the FDCPA a debt collector is prohibited from engaging in the following:

Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:

• use threats of violence or harm;
• publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
• use obscene or profane language; or
• repeatedly use the phone to annoy someone.

False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:

• falsely claim that they are attorneys or government representatives;
• falsely claim that you have committed a crime;
• falsely represent that they operate or work for a credit reporting company;
• misrepresent the amount you owe;
• indicate that papers they send you are legal forms if they aren’t; or
• indicate that papers they send to you aren’t legal forms if they are.

Debt collectors also are prohibited from saying that:

• you will be arrested if you don’t pay your debt;
• they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
• legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.

Debt collectors may not:

• give false credit information about you to anyone, including a credit reporting company;
• send you anything that looks like an official document from a court or government agency if it isn’t; or
• use a false company name.

Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:

• try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge;
• deposit a post-dated check early;
• take or threaten to take your property unless it can be done legally; or
• contact you by postcard.

Remember that even if a consumer debtor prevails on a FDCPA suit, the debtor may still be oligated to pay the debt if it is legally owed.  It is always best to seek the advice of an attorney with knowledge and experience in the area of consumer law, if you have been sued by a debt collector and/or believe that a debt collector has engaged in a violation of the FDCPA.