Damages for FDCPA Violations

If a bill collector violates the Fair Debt Collection Practices

Act, you might be able to sue and recover money and other
damages.
By Linda Thompson, Contributing Author

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The Fair Debt Collection Practices Act (FDCPA) protects debtors from harassment by debt
collectors. If a collector has violated the FDCPA, you can sue the collector in court.

The FDCPA provides a range of damages for successful FDCPA lawsuits, including monetary
damages, attorneys' fees, and more. Read on to learn what types of damages you can get in a
FDCPA lawsuit.

Damages and Remedies Available in FDCPA Lawsuits

The FDCPA is violated when debt collectors take certain actions. (To learn what constitutes a
violation of the FDCPA and what collectors are covered by the Act, see Illegal Debt Collection
Practices.)

If a debt collector violates the FDCPA and you sue the collector in court, you might be able to
recover the following types of damages. (15 U.S. Code § 1692k).

Monetary Remedies

These types of money damages might be available:

Damages for Physical Distress

Some debtors suffer actual physical damage from the barrage of debt collection calls and letters,
including stress-related heart problems, migraine headaches, skin rashes, and so forth. Any
health concerns should be first addressed with a qualified doctor, and then the debtor should
contact an attorney to document all such health concerns. If the health problems can be linked to
the FDCPA violations, the debtor might be able to recover the costs of treatment and other
damages against the debt collector.
Damages for Emotional Distress

Relentless telephone calls and collection letters cause real stress and can affect a debtor’s
emotional well-being. The debtor’s marriage and other relationships might suffer. Also, calls to a
debtor’s coworkers and family members can be an incredible invasion of privacy. All of these
occurrences should be documented and discussed with an attorney. The offending debt collector
might be held liable for this distress and the debtor might be able to recover against the debt
collector.

Lost Wages Recovered

Debtors might face problems at work because debt collectors call and disrupt the debtor’s
productivity, as well as the productivity of debtor’s coworkers. When debtor collectors violate
the FDCPA through calls to the debtor’s employer, the debtor might be able to recover lost
wages.

Wage Garnishment Recovery

If a paycheck has been garnished by a debt collector that has violated the FDCPA, it might be
possible for the debtor to recover these funds.

Statutory Damages of $1,000

Above and beyond what the consumer might collect for losses related to lost wages,
psychological distress, and the like, the FDCPA allows a consumer to recover damages up to
$1,000 from the collector. Because the FDCPA says that the consumer can recover “up to
$1,000,” the amount awarded could be less.

The court can award these damages if the consumer proves the collector violated the FDCPA,
but the consumer does not have to prove that the violation caused any harm. This $1,000 is per
lawsuit—not per violation—so if the creditor violates the FDCPA once or multiple times, the
consumer still only collects up to $1,000.

Attorneys' Fees and Costs

In cases where the debtor successfully proves that a FDCPA violation occurred, the court may
allow recovery of attorneys' fees and costs. This recovery is especially important because
without this reimbursement, debtors might not be able to afford to bring FDCPA actions against
unscrupulous debt collectors.

Statute of Limitations for FDCPA Lawsuits

Under the FDCPA, lawsuits alleging violations of the FDCPA must be brought “within one year
from the date on which the violation occurs.” (15 U.S.C. § 1692k(d)). In the case of Rotkiske v.
Klemm, 589 U.S. ___ (2019), the U.S. Supreme Court clarified that the one-year statute of
limitations for an FDCPA violation begins to run when the alleged violation occurs, not when the
offense is discovered, absent the application of an equitable doctrine. (To learn more about the
statute of limitations for FDCPA actions and get details about the Rotkiske case, read What Is the
Statute of Limitations for an FDCPA Case?)

Injunctive Remedies

In addition to awarding a debtor monetary damages, a court can also order the debt collector to
cease certain activities—this is called injunctive relief. For example, the court can require that:

The Debt Collector Stop Calling

The FDCPA can be used to stop calls to the debtor’s home, work, family, friends, neighbors, and
other associates. When debtors receive dozens of calls each day from relentless debt collectors,
the end of those calls might be the greatest relief of all.

The Debt Collector Stop Sending Letters

Letters from debt collectors can be nearly as aggravating as telephone calls. Enforcement of the
FDCPA against overly aggressive debt collectors can stop the daily flood of collection letters.

Third Parties May Also Sue

Family members of the debtor, the receptionist at debtor’s work, debtor’s neighbors, and other
persons who have been burdened by a debt collector’s phone calls and letters may also sue the
debt collector under the FDCPA. As with any FDCPA claim, these persons will need to prove
that the FDCPA was violated and that they suffered damages from that violation.

***

Sue the Debt Collector in State Court

The consumer may bring a lawsuit against the debt collector in state court. In the lawsuit, you
must prove that the debt collector violated the FDCPA. If successful, you may be able to collect
$1,000 in statutory damages, and possibly more if you suffered harm from the violations. (To
learn more about the amount and type of damages you can collect in a FDCPA lawsuit, see
Damages for FDCPA Violations.)

In these lawsuits the consumer is almost always represented by an attorney. The amount of
money that the consumer sues for includes the consumer’s attorney fees and costs. Suing in state
court is almost always the most time consuming and lengthy of all remedies, but a successful
lawsuit can award the consumer the highest monetary damages.

Statute of Limitations for FDCPA Lawsuits

Under the FDCPA, lawsuits alleging violations of the FDCPA must be brought “within one year
from the date on which the violation occurs.” (15 U.S.C. § 1692k(d)). In the case of Rotkiske v.
Klemm, 589 U.S. ___ (2019), the U.S. Supreme Court clarified that the one-year statute of
limitations for an FDCPA violation begins to run when the alleged violation occurs, not when the
offense is discovered, absent the application of an equitable doctrine. (To learn more about the
statute of limitations for FDCPA actions and get details about the Rotkiske case, read What Is the
Statute of Limitations for an FDCPA Case?)

Sue the Creditor in Small Claims Court

Small claims courts may be a better option for consumers who do not want to hire an attorney or
spend the time required for a full-blown state court lawsuit. Small claims courts allow
individuals to argue their case without an attorney and through an expedited process. These
courts typically offer the consumer one shortened hearing in order to argue the case to a judge.

Usually, you file a simple court document to start the case. Hearings are usually held less than
two months after the lawsuit is filed. At the hearing the judge may issue a ruling on the spot or
take the case "under submission" and mail you the ruling at a later date. (Learn more about small
claims court, including how to bring an action, in our Small Claims Court topic area.)

The disadvantage of using small claims courts is that Small Claims Courts limit the amount of
damages that you can get. (To learn the limit in your state, see 50-State Chart of Small Claims
Court Dollar Limits.)

Report the Action to a Government Agency

The Federal Trade Commission (FTC) is charged with overseeing debt collector actions and
ensuring that the FDCPA is not violated. Consumers can contact the FTC with FDCPA concerns.
You can file an online complaint using the FTC's Complaint Assistant at
www.ftccomplaintassistant.gov.

Consumers may also contact the Consumer Financial Protection Bureau (CFPB). The CFPB
takes consumer complaints, passes those complaints along to the creditor, and then works with
the consumer and creditor to find a solution to the problem. You can submit an online complaint
with the CFPB at www.consumerfinance.gov/complaint.

Report the Action to the State Attorney General

In addition to violating the FDCPA, the debt collector may also be violating state laws. The
consumer may want to contact the state Attorney General’s office in order to receive guidance on
a possible FDCPA lawsuit and for any possible state law actions against the debt collector. Many
of these offices also receive complaints against debt collectors—if it gets enough against one
collector, it might prosecute on behalf of the state. To find your state's office, see State
Consumer Protection Offices.
Use the Violation as Leverage in Debt Settlement
Negotiations
If you are trying to settle debt and the collector violates the FDCPA, you can use the violation as
leverage to settle the debt. This often works because collectors know that a FDCPA lawsuit can
be costly to defend and may result in a judgment against them.

How much leverage you get from the threat of a FDCPA lawsuit depends on the strength of your
case. If you have strong facts proving a violation (multiple letters, records of multiple phone
calls, testimony of coworkers who received phone calls, etc.), you will have much more leverage
in debt settlement negotiations. (To learn more about negotiating with debt collectors, see
Negotiating With Collectors on Unsecured Debts.)

Common Defenses and Counterclaims in

Debt Collection Lawsuits
Whether you are an original creditor or debt buyer (also called third party collector), you may
sue a consumer on an unpaid debt. Parsippany debt collection lawyers understand that your goal
as a creditor is to secure a swift judgment and then pursue post-judgment remedies to collect the
judgment from liquidation of the debtor’s assets if the debtor does not voluntarily pay. The good
news is that often, the intimidation and embarrassment of a lawsuit forces the debtor to settle the
lawsuit and pay the debt owed. This article is intended to assist those who need help
understanding the common defenses and counterclaims in debt collection lawsuits.

Most Debtors Will Not Defend When Sued

Most Americans choose not to defend debt collection lawsuits due to a mistaken belief that since
they incurred the debt, there is not much that can be done to prevent the creditor from winning
the monetary judgment. Accordingly, few people hire a lawyer to represent them in these
lawsuits. Some debtors may try to defend the lawsuit themselves by answering the complaint and
appearing at a hearing.

However, for the most part, the creditor’s lawyer usually has an easy road to victory when the
defendant does not answer the complaint. After the time for responding to the complaint passes,
the debtor will be in default. The creditor can then generally obtain a default judgment.

What Happens When the Debtor Defends the Lawsuit?

Even though debt collection lawsuits are generally successful, before proceeding, you may want
to assess the likelihood that the debtor will raise a defense or counterclaim.
Some Possible Defenses

A defendant debtor may have viable defenses to a debt collection lawsuit even if he or she
incurred the debt. By choosing to answer and defend a debt collection lawsuit, a defendant
debtor can take advantage of various defenses and counterclaims, which may result in a
settlement for less than the amount owed or even dismissal of the suit.

One of these defenses is statute of limitations. Statutes of limitations are designed to give time
limit to creditor actions, i.e., they cut off the right to sue to collect the debt after some period of
time has passed, depending on the state and the type of debt. State statutes of limitation on
consumer collection actions are, generally, from 3 to 6 years. Many consumers do not know that
making a written promise to pay or making a partial payment on the debt (no matter how small)
may reset the clock on the creditor’s ability to take legal action. The statute of limitation is an
affirmative defense which must be pleaded, and the burden of proving that the statute has expired
is on the party asserting it, i.e., the debtor.

When the creditor is a debt buyer, it has no first-hand knowledge of the consumer’s payment or
nonpayment of the debt; it has only the second-hand knowledge based on the records of its
predecessors. Because the burden of proof rests on the debt buyer, the defendant debtor can
force the debt buyer to prove that the debtor owed the debt, as well as demand proof of the
account agreement and its terms. In her answer to the complaint, the defendant might say
something like this:

Defendant admits that she has had more than one account with XYZ in the past, but since
Plaintiff’s complaint is unverified and does not even reference an account number, Defendant
can’t tell if the account is even one of her accounts, and Defendant denies the allegations of
Paragraph ___ of the Complaint. Defendant demands verification of the debt and strict proof of
the terms of the alleged account at specific times, including the time Plaintiff alleges it went into
default, the complete terms of the account agreement and the owner of the account at that time,
and proof of any charges, credits, offsets, and payments on said account, including fees and
interest charged before and after the account was charged off. Defendant reserves the right to
plead further once proof of these matters has been produced.

The debtor can then demand proof that the debt buyer has the right to sue on an account:

Plaintiff has no standing to sue. Plaintiff is a ‘debt buyer’ and has not proved it is the lawful
owner of the account sued upon as alleged. Defendant requests a copy of the assignment or other
writing with the alleged account number and other evidence proving that an account owed by
Defendant was assigned to Plaintiff. If the debt has been assigned more than once, then
Defendant requests that Plaintiff produce each assignment or other writing evidencing transfer of
ownership to establish an unbroken chain of ownership.

Some Possible Counterclaims by a Debtor

Debt collection cases can give rise to numerous counterclaims, including claims under the Fair
Debt Collection Practices Act (FDCPA) and the Fair Credit Report Act (FCRA), as well as state
consumer protection laws. In attempting to collect a debt, you have to stay within the boundaries
of state and federal laws regulating debt collection practices.

FDCPA (15 U.S.C. §1692) is a federal statute enacted mainly for the purpose of eliminating
abusive debt collection practices by debt collectors. FDCPA is a popular counterclaim in debt
collection lawsuits because it is a strict liability statute; the debtor only needs to show a
violation, even if unintentional, to be entitled to damages. It is also a remedial statute, which
means the courts construe it liberally in favor of the consumer.

FDCPA defines many debt collection practices that are unlawful. Some instances of such
prohibited practices are contacting the debtor at any unusual time or place; reaching out to the
debtor directly if the creditor knows that debtor is represented by an attorney; contacting the
debtor at his or her place of employment; communicating about the debt with third parties; and
engaging in any conduct, the natural consequence of which is to harass, oppress or abuse the
consumer. In addition, creditors are prohibited from using false, deceptive or misleading
representations or means in connection with the collection of a debt.

Under FCRA, debt collectors and original creditors can be held liable as “furnishers” under 15
U.S.C. §1681s-2(b). When a consumer disputes a certain debt with a credit reporting agency,
and the credit agency then forwards this dispute to the furnisher (creditor), there are certain
duties that the furnisher must comply with. Some of these duties are to conduct investigation,
review all the relevant information provided by the credit agency, and report the results to the
credit reporting agency. Debt collectors who do nothing to investigate a consumer’s dispute may
be subject to FCRA violations.

Ref

The Court in Patterson v. Peterson Enterprises, Inc., No. 2:18-cv-161-RMP (E.D. Wash. Oct.
23, 2018) recently denied a motion to dismiss seeking dismissal of a Fair Debt Collection
Practices Act (“FDCPA”) claim due to the consumer plaintiff’s assertions that counterclaims in a
previous collections lawsuit indicated that a debt was being disputed. The Court ran with the
plaintiff’s theory. A copy of the opinion can be found here.

Plaintiff Latalia Patterson alleges in her complaint that her child’s medical providers failed to
properly bill her insurance and, as a result, medical accounts went unpaid, there was a default,
and the medical account were transferred to Valley Empire Collection, after which a collections
lawsuit ensued. Patterson also alleges that Valley Empire “failed to report the medical accounts
as disputed after Patterson’s opposition to the debt collection lawsuit.” Additionally, as alleged
in the complaint, the “failure to report the credit accounts as disputed violates the [FDCPA], 15
U.S.C. § 1692 et seq.,” as well as other state laws.

In citing Turner v. Cook, 362 F.3d 1219, 1227–28 (9th Cir. 2004) and Heejon Chung v. U.S.
Bank, N.A., 250 F. Supp. 3d 658, 680 (D. Haw. 2017), the Court noted that “a plaintiff alleges an
FDCPA claim by alleging: (1) the plaintiff is a consumer; (2) the debt involved meets the
definition of debt in the FDCPA; (3) the defendant is a debt collector; and (4) the defendant
committed an act prohibited by the FDCPA.” The Court held that Patterson easily satisfied the
first three elements of an FDCPA claim. However, the fourth element—that Valley Empire
“committed an act prohibited by the FDCPA”—warranted additional analysis, in addition to a
determination as to whether the debt collector’s “failure to communicate with credit reporting
agencies [concerning Patterson’s dispute] was material.”

First, with respect to the fourth element of a FDCPA claim, the Court found:

Ms. Patterson alleges that Valley Empire failed to report [her] dispute of the amount due on the
medical account to credit reporting agencies in violation of section 1692e(8). She alleges to have
disputed the account by denying liability on the account in her answer to Valley Empire’s debt
collection lawsuit and her opposition to Valley Empire’s summary judgment
motion. Id. Therefore, Ms. Patterson has alleged that she disputed the credit account, and that
Valley Empire failed to tell credit reporting agencies that the account was disputed.

Second, with respect to the materiality of Valley Empire’s alleged failure to communicate
Patterson’s dispute vis-à-vis her response in the collections lawsuit, the Court reasoned:

Here, Ms. Patterson alleges that Valley Empire elected to report the unpaid medical accounts to
credit reporting agencies. Because Valley Empire elected to report the medical account, if
Valley Empire did not disclose that the account was disputed, that failure to disclose would be
material. Ms. Patterson’s complaint therefore alleges that Valley Empire failed to report the
credit account as disputed, and that such a failure would be material under section 1692e. Thus,
Ms. Patterson’s complaint sufficiently states a FDCPA claim.

At the very least, the Patterson decision sends a clear signal that debt collectors, when defending
themselves (and positioned to make a motion to dismiss), need to consider the entire relationship
and history of their interactions with their consumers, the debts at issue, and all collection efforts,
including previous lawsuits.

NOTE: If you assert either of the service defenses, you only have 60 days after filing
the answer to ask the court to dismiss the case because of improper service, or you
waive that defense.

Affirmative Defenses

• Plaintiff does not allege a debt collector’s license in the complaint. Again, this
only applies where the plaintiff is not the original creditor. If the complaint
does not list a DCA license number, you can assert this defense.
• statute of Limitations (the time has passed to sue on this debt). Most debt
collection, including credit card debt, cell phone debt and hospital debt is
based on a claim of a breach of contract. The statute of limitations for breach
of contract varies depending on where the plaintiff’s business is based, but is
never longer than six years if you are sued in New York. The time is generally
computed from the date of the first missed payment. If it has been more than
 two or three years since your last payment, you should probably allege this
defense.
• the debt was discharged in bankruptcy. If you received a discharge of debts in
bankruptcy after you incurred the debt, you do not owe the money and can
allege this defense.
• The collateral (property) was not sold at a commercially reasonable price.
This defense is primarily available in secured loans, such as auto loans,
where the secured item, such as the car, was repossessed and sold at
auction at less than a fair market value (which is quite often the case). The
lender may be suing you for the amount owed minus the amount owed at
auction. Equitable Defenses
• Unjust enrichment (the amount demanded is excessive compared with the
original debt).This defense is available when interest and penalty fees may
have increased the amount of the debt beyond what is reasonable. This is
also available if the plaintiff has waited for years after the default, allowing
interest to increase the amount of the debt significantly during that time.
•Violation of the duty of good faith and fair dealing. This defense is available if
the plaintiff has acted in bad faith in its interactions with you.
•Unconscionability (the contract is unfair). This defense alleges that even if
you did enter a contract with the plaintiff, that contract was unfair and should
not be enforced by the court.
• Laches (plaintiff has excessively delayed in bringing the lawsuit to my
disadvantage). This defense is available if a significant amount of time has
passed from the time of alleged default to the time the case was filed. It could
mean that the delay makes it harder to prove that you paid, or that the
passage of time has allowed interest to increase unfairly. This defense is
often alleged alongside a statute of limitations defense.
• Defendant is in the military. This defense is available if the defendant is an
active member of the armed forces.