The federal Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from making false claims about a debt, leading a federal judge to rule that two debt collection companies violated that law and would have to stand trial to determine the damages owed as a result of their failure to acknowledge a debtor’s dispute.
Under the FDCPA, a debtor may dispute the validity of a debt, and if the debtor does so, the debt collector must notify anyone to whom it communicates information about the debt that the debt is disputed. In Thomas v. LVNV Funding, the debtor sent a dispute letter near the end of the period when the debt collectors (LVNV Funding and Resurgent Capital Services) filed reports with credit reporting agencies. The dispute was received on February 1, 2021, but not “processed” until after a monthly report was sent to a credit reporting agency; as a result, the monthly report failed to note that the debtor disputed the amount of the debt.
The federal court noted that the debt collector’s policies were set up to “tolerate the risk of violating” federal law,” and found that the debt collectors had violated the FDCPA. The court went on to later hold that the debtor could introduce evidence of those policies and procedures at trial to help determine what damages were owed.
Proving a violation of debt collection laws can help a debtor eliminate a debt and recover damages for out-of-pocket costs and emotional distress. LawtonCates recovers hundreds of thousands of dollars from debt collectors every year.
If you or someone you know are having credit or debt collection problems, contact LawtonCates, S.C., to set up a free consultation with our consumer protection lawyers.