When a debt collector violates your rights by engaging in unfair debt collection practices you can sue it to stop the harassment or abuse and, in many cases, recover monetary damages under the FDCPA from the abusive collector. Although debt relief is not an available remedy under the Fair Debt Collection Practices Act (FDCPA), four kinds of monetary damages may be available to consumers who successfully sue abusive debt collectors for unfair debt collections.
FDCPA Statutory Damages for Unfair Debt Collection
Statutory damages are available in FDCPA unfair debt collection cases though the amount is limited to no more than $1000. That amount is the total available regardless of the amount of violations at issue. Although I cannot explain why the upper limit for statutory damages is so low, their purpose is to encourage consumers to sue debt collectors even when there are no actual damages. In awarding statutory damages the courts will consider the nature, frequency, and persistence of the noncompliance with the FDCPA and whether or not the collector intended to commit the acts that violated the FDCPA.
FDCPA Actual Damages for Abusive Debt Collection
Actual damages may also be awarded in FDCPA litigation. Actual damages in unfair debt collection cases consist of monetary damages incurred as a result of the abusive collection activity. This can include attorney’s fees incurred to defend an improper debt collection lawsuit or other tangible monetary loss. Actual damages can also include damages for emotional harm or harm to your reputation. This includes sleeplessness, nausea, anxiety, embarrassment, shame, and depression caused by the unfair debt collection abuse.
Punitive Damages for Debt Collection Abuse
Punitive damages may be available in abusive or unfair debt collection litigation but are challenging to obtain. The reason is because several courts have refused to award punitive damages solely under the statute, despite the lack of evidence in the FDCPA that Congress meant to preclude punitive damages. The best practice is to include state law claims in your complaint that allow an award of punitive damages. To support an award of punitive damages, you will also need to demonstrate actual damages and that the collector acted with an unusually high level of malice or recklessness.
Attorney’s Fees for Debt Collection Abuse
Consumers who successfully sue under the FDCPA for abusive or unfair debt collection practices are entitled to a mandatory award of the attorney’s fees incurred in the action. This is a powerful incentive to hire an attorney rather than sue a collector on your own. Most consumer law attorneys will take these cases on a contingency basis so you will generally pay nothing if you lose your case. In addition to the value of this requirement in discussing settlement, there is also a great amount of personal satisfaction in making a debt collector pay your legal fees.
Debt Relief in Debt Collection Lawsuits
Relief for the underlying debt is not considered actual damages and therefore is not an available remedy under the FDCPA. This means that even if you successfully sue a collection agency you will still normally remain liable for the underlying debt. Even so, forgiveness of the debt is a viable option to consider when negotiating settlement of an FDCPA case. Doing so will prevent the collection agency from selling your debt to reignite collection efforts by someone else.
Many consumer law firms will tell you that there are only two kinds of damages available under the FDCPA for abusive or unfair debt collection practices; namely actual and statutory damages. This is because punitive damages are difficult to obtain and attorney’s fees are not strictly considered damages. Nonetheless, both are recoverable under the FDCPA and both should be pursued if your case merits doing so.