Civil Liability of Debt Collectors

Should the case go to trial, the number of violations as well as the seriousness will impact the number of damages the consumer may recover. Generally, the more severe the conduct of the debt collector the higher the potential damages. As experienced litigators, we have accumulated a significant amount of law-changing cases; many resulting in significant damages-including actual damages for emotional distress on top of statutory damages.

Actual and Statutory Damages

Under § 813(a)(1) of the FDCPA, there is not limit on the amount a consumer can be awarded in actual damages. When a consumer requests actual damages, it is their burden to prove the damages alleged. There must be a reasonable connection between the debt collector’s conduct and the emotional and/or monetary damages alleged. Actual damages in FDCPA actions can include:

• Money illegally collected from the consumer;
• Unlawful collection charges or interest;
• Lost wages or other monetary losses; and
• Damages that result from emotional distress.

When a consumer alleges emotional distress and wishes to recover, courts require a showing of “sufficient proof.” Courts differ on what constitutes sufficient proof. Some have held that a consumer’s testimony is sufficient while other courts require evidence beyond the consumer’s testimony to recover for damages due to emotional distress under the FDCPA.

Under § 813(a)(2)(A) of the FDCPA, a debt collector cannot be liable for statutory damages that exceed $1,000. Statutory damages are easier to prove and a violation is deemed “strict liability”. In other words, any violation of the list of infractions renders the offender liable. Many of these violations are “technical” violations (failure to leave a proper voicemail with required disclosures; calling too often; calling the workplace after being told not to; calling the third party and disclosing the nature of the call; calling before 8:00 a.m. or after 9:00 p.m.; threatening court or legal action without proper intent; threatening wage garnishment; etc.).

If based on these factors the court determines that the violation was less severe then courts may award the consumer less than the statutory limit. Most courts have consistently held that consumers cannot receive more than $1,000 in statutory damages per action whether or not there are multiple violations under the FDCPA. However, some courts have awarded statutory damages of $1,000 per violation.

Court Costs and Attorney’s Fees

A consumer is only entitled to court costs and reasonable attorney’s fees if they prevail under FDCPA § 813(a)(3). One very important factor in determining whether a consumer’s action was successful is if, and to what extent, the consumer recovers actual or statutory damages. Courts have found that jury verdicts awarding damages as little as $100.00 deem the plaintiff to have “prevailed” and is thus entitled to attorneys’ fees. However, if there was no recovery then the consumer is not entitled to court costs and attorney’s fees. Most firms, however, absorb this risk and do not charge their client’s attorney’s fees when they lose a case.