Criticism of FDCPA Consumer Rights

Criticisms of the FDCPA

By consumer groups

Some consumer groups argue that the FDCPA does not go far enough, and does not provide sufficient deterrence against unscrupulous collection agencies. Consumer groups have complained that the maximum statutory damages contained in the original 1977 version of the law has not kept up with inflation. According to the inflation calculator at the Bureau of Labor Statistics' website, that same penalty would be the equivalent of $3,505.86 by 2008 standards.

Many debt collectors, and the consumer rights attorneys who sue them for violations of the FDCPA rely heavily on the definitive legal treatise on the FDCPA produced by the National Consumer Law Center.

By the credit industry

Conversely, many in the credit industry and some courts have taken the stance that the FDCPA has often been used to file frivolous lawsuits and seek damages for minor technical violations and has, at times, seriously impeded their ability to collect valid debts.^[28] Given the strict liability nature of the FDCPA, the collections industry and the insurance companies who provide liability coverage for them have repeatedly lobbied Congress to relax provisions of the law to reduce their civil exposure for these "hyper-technical" violations. ^[29]

The FTC Report

For its part, the Federal Trade Commission (FTC) produces an annual report to Congress of its findings with respect to its FDCPA enforcement activities. This report details consumer complaints to the FTC about alleged debt collector violations of the FDCPA. The 2008 report indicated that the FTC received 70,951 consumer complaints about third party debt collectors in 2007, which is an increase from the 69,249 received in 2006. The FTC receives more complaints about debt collectors than about any other specific industry, though the number of complaints represent a small percentage of the overall number of contacts by debt collectors with consumers.^[30]