Cartwright Introduces Legislation to Protect Consumers from Abusive Debt Collection Practices

Press Release

Last week, U.S. Representative Matt Cartwright introduced the Fair Debt Collections Practices Clarifications Act, legislation that would amend the Fair Debt Collection Practices Act (FDCPA) to protect consumers from abusive debt collection practices.

Signed into law by President Jimmy Carter in 1977, FDCPA creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. Despite these protections, the Federal Trade Commission (FTC) receives more complaints about the debt collection industry than any other specific industry.

In February 2013, the U.S. Supreme Court, in a 7-2 decision, ruled that that a debt collector who prevails in an FDCPA case can be awarded costs at the discretion of a district court even when the suit wasn't brought in bad faith.

"Due to the Supreme Court's unfortunate decision, consumers, particularly those who are economically vulnerable, may choose to forego legal action when subjected to abusive and illegal debt collection practices given the potential high costs of losing a suit" said Rep. Cartwright. "My legislation would correct the Court's decision and restore the original intent of the FDCPA."

The bill would amend the FDCPA so that costs are only available to a winning defendant when the plaintiff brings a suit in bad faith or for the purpose of harassment. Approximately 30 million Americans have debt under collection, with average unpaid debt around $1,500. Complaints to the FTC about debt collectors skyrocketed from 13,962 in 2000 to 142,743 in 2011.

The following organizations have endorsed the bill: the American Association for Justice, Americans for Financial Reform, Public Citizen, the National Association of Consumer Advocates, and the National Consumer Law Center.

"Complaints of illegal and abusive debt collection practices continue to swarm the consumer protection agencies. Congressman Cartwright's bill would help to ensure that consumers harmed by abusive debt collection tactics are not deterred from seeking redress under the Fair debt Collection Practices Act," said Christine Hines, consumer and civil justice counsel at Public Citizen, Congress Watch division.

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