Debt collection isn’t always a “pretty” business, and if you owe money – or if a company thinks you owe it money – they can get pretty rough. The law is practical, in general, and recognizes the importance of businesses getting paid. But there are limits. You have rights against rogue debt collectors.
Most of these rights can be found in the Fair Debt Collections Practices Act. We talk a lot on this site about defending yourself from collections suits. And this defense can often take the form of making counterclaims, as well. But what if you want to sue them? Can you do so? and why would you? This video explores those questions a little bit.
Be Aggressive: Sue the Debt Collector
There are a lot of reasons you might want to sue the debt collector. Doing so allows you to choose the time and court of the suit. Also, because debt collectors frequently sell the (your) debt, the one currently bugging you might not want or be prepared to sue you. Filing suit means you catch them unprepared, and they will be more likely to settle with you and cancel your debt. The Debt Defense System will guide you through the process.
It is easier to sue a debt collector than an original creditor for debt law violations. You have a fairly clear, broad set of rights against debt collectors under the Fair Debt Collection Practices Act (FDCPA). In general, they are required to be fair with you, and this means they must inform you of certain of your rights (like verification, for example), must not deceive or attempt to deceive you, cannot harass you beyond certain limits, and in general must treat you with fundamental fairness. If they violate any of these rules, you’ll have a claim against them under the FDCPA.
It’s a little different with original creditors. Businesses that have a relationship with you other than simply as collectors are somewhat vulnerable to getting bad reputations – they are “accountable to the market.” That puts certain natural limits on their actions as to how roughly they can treat you. Therefore, the FDCPA does not need to give you as many rights against them. Still, there are limits, and behaviors so extreme as to be “outrageous” will give you a right against original creditors.
So a critical distinction will be whether the company is a debt collector within the meaning of the law or not. That used to be easier to prove than it is now. If the company bugging you owns the debt it’s bugging you about, you will need to allege and prove that its “principal business” is debt collection. If it can show that it does other things (like lending or servicing accounts, or possibly even it it’s a subsidiary of another company that does other things), it may not be a debt collector. The biggest debt collectors are probably still within the FDCPA, but some others may not be.