In my evil and twisted mind, I came up with the following. For many CAs, the occasional FDCPA law suit is just a "cost of doing business" (however sloppily they do it). Many contracts include the cost of collection as part of the money they can recover if the borrower defaults on the loan. SO... If the CA screws up and pays on an FDCPA suit, could the CA just add that settlement cost (as well as legal costs) on to the debt as a "collection cost" when they later go to court and file suit for the debt? (I hope none of them are reading this and get any ideas)... My guess is that they are separate issues so that couldn't be done. The collection costs that relate to the contract are those that were agreed to between the CA and the OC for the purpose of collecting on this debt. If the CA incurs additional costs on its own, then that's too bad for the CA and they lose money on that particular deal. The CA can't go and add whatever it wants on to the debt. (I've seen cases overturned on appeal for excessive and disallowed "expenses"). Anyway, just pondering this morning.
Some interesting pondering, but a CA could not add the "cost" of an FDCPA suit to a debt (directly). A company cannot include the cost of their own neglignce or ineptness as a "cost". The "costs" would be those accrued in the "normal" scope of business, i.e. mailing costs, court filing costs, attorney fees, copies, etc. "Damages" paid would ned up coming right out of the profit margin, hence some of the activity many are doing to "avoid liability". These kinds of costs come under the "avoidable expenses" category. Where you review for mistakes you made, and evaluate how to avoid in the future. However, based upon the size of the industry, and the amounts in question, right now it is probably perceived as a "low cost of business", but perhaps growing....the more suits that are brought, and the more won, will erode profits, and thus it becomes cost effective to take measures to fight harder or change processes. No doubt we are on the edge of a "new era" in the debt/credit arena. I think the costs of suits will drive out some of the marginal CA businesses, and those that adapt to a new enviornment will continue.
$1,000 damage limit It seems to me that with all the fuss (noise?) Congress has made over predatory lending, that maybe now is the time to update the 1974 limit of $1,000 damages to, say, $10,000? Maybe, that would get their attention? Maybe it's time to write congress?
How lucky! I just found out that one of my state's Senators is on the Senate Commerce Committee (http://commerce.senate.gov/public/index.cfm?FuseAction=About.Members) Time to fire up the ol' letter writing machine!
I just checked here: http://woodrow.mpls.frb.fed.us/rese...larAmount=1000&yearto=2008007&result=+4168.36 and it says that $1,000 in 1974 would be $4168.36 so maybe $5,000 would be equitable, but I still think $10,000 would send a better message. i.e. "Obey the law!"
I just sent my senator a letter asking to raise the statutory limit of the FDCPA to $10,000. I also saw this recently: http://articles.moneycentral.msn.com/Banking/YourCreditRating/SleazyCreditCardTacticsUnderFire.aspx I hope they adopt the new credit card statement format show here: http://www.federalreserve.gov/DCCA/RegulationZ/20070523/g18g.pdf that would shine a spotlight on some of the places the credit card companies are getting their mulit-trillion dollar profits. If you want to do something about it, you can comment on the changes here: http://www.federalreserve.gov/newsevents/press/bcreg/20070523a.htm but hurry, the comment period ends Oct. 12, 2007!. Even if this is simply a symbolic gesture or if you just send an "atta-boy!" letter, it'll still help counter the massive lobbying campaign the banks are using. If there's a lot of money to be made, you can bet there'll be a lot of lobbyists out there to keep it flowing (out of your pockets). Make your voice heard!
