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Is it $1000.00 per violation? Not according to this.


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It May be Easy, But it's Not Going to Make Anyone Rich

by Ron Sargis, CAC Legal Counsel

Collector's Ink, November 2001

Recently, I had two consumer attorneys question my inerpretation of the FDCPA. This was on a fairly fundamental FDCPA question, something that we haven’t argued seriously with any consumer attorneys for a number of years. After getting over the shock of a consumer attorney questioning my opinion (as if that doesn’t happen every day), I realized that this well could be the situation where a whole new generation of consumer attorneys were addressing some of these issues for the first time.

The issue raised was whether the FDCPA statutory damages were computed at (up to) $1,000.00 per alleged violation or a maximum of $1,000.00 irrespective of the number of violations. As many of you recall, for years we have been teaching in the CAC legal schools that it was a maximum of $1,000.00 irrespective of the number of violations (unless the matter is brought as a class action). This issue has been established for so long, that I was surprised when these consumer attorneys said that they could "find no authority" for that proposition. Neither attorney struck me as being the type to make wild statements contrary to the law, so I went back to double check on this point.

Anytime a debt collector is trying to interpret the FDCPA, the place to start is with the FDCPA itself. We look to the plain language of the statute. Section 813(a)(2)(B) of the FDCPA [15 USC 1692k] states:

813 Civil liability

(a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title with respect to any person is liable to such person in an amount equal to the sum of+...

(2)(A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000; or [balance of paragraph relates to class actions]

On its face, this section says that in any "action" the court may allow the additional damages [commonly called the "statutory damages"] of up to $1,000.00. In both common parlance and legal terminology, an action refers to a lawsuit, not individual allegations in the lawsuit. There are also legal principals that prevent a plaintiff from splitting causes of actions. That principle requires a plaintiff to bring all of his or her claims arising out of the same facts or circumstances in one action, not multiple lawsuits.

On its face, the statute appears to state that the maximum amount of statutory damages is $1,000.00 in the entire action. Though the consumer attorney said they had not seen any authority for such an interpretation of the FDCPA, running a search of the federal cases quickly turned up several published decisions interpreting this language. All of the decisions are consistent with the plain language of the statute. To provide the agencies and their counsel with something more than "my opinion" of what the cases say, I have included pertinent quotes from the cases.

In Wright v. Finance Service of Norwalk, 22 F.3d 647 (6th Cir. 1994), the Sixth Circuit Court of Appeals throughly addressed the issue. This analysis is cited to in most of the other cases, irrespective in which Circuit the court is situated.

In this case, we find that the language of the statute is reasonably plain. The words of 15 U.S.C. § 1692k(a)(2)(A) simply state that damages, above and beyond all actual damages, may not exceed $1,000 "in the case of any action by an individual." Congress certainly knows how to write statutes that make each separate violation subject to a separate penalty, or even that make each separate day of a violation a separate offense subject to a separate penalty... Thus, even were we to need to consult legislative history, this absence of an intent contrary to the plain meaning of the words indicates that Congress intended to limit "other damages" to $1,000 per proceeding, not to $1,000 per violation.

Other sections of the FDCPA support this conclusion. For example, the statute provides, in part, that "n determining the amount of liability in any action [under § 1692k(a)(2)(A) ] ... the court shall consider, among other relevant factors ..., the frequency and persistence of noncompliance...." 15 U.S.C. § 1692k(B)(1). The provision requiring courts to consider "frequency and persistence of noncompliance" in "any action" suggests that Congress envisioned situations such as this case, namely where repeated violations are the subject of a single proceeding...

Consequently, the terms of the statute indicate that Wright’s recovery for additional damages is limited to $1,000 per proceeding. All the courts publishing opinions on this issue have reached a similar result. See Harper v. Better Business Servs., Inc., 961 F.2d 1561 (11th Cir.1992); Beattie v. D.M. Collections, Inc., 764 F.Supp. 925 (D.Del.1991); Donahue v. NFS, Inc., 781 F.Supp. 188 (W.D.N.Y.1991); Whatley v. Universal Collection Bureau, Inc., supra; Harvey v. United Adjusters, 509 F.Supp. 1218 (D.Or.1981)...

Accordingly, we hold that 15 U.S.C. § 1692k(a)(2)(A) limits a plaintiff’s additional damages to $1,000 "per proceeding" rather than "per violation." Such a limitation may, at first blush, seem to minimize the deterrent value of this statute in preventing debt collection abuses; we observe, however, that other provisions of the statute allow a plaintiff to recover all actual damages (§ 1692k(a)(1)), costs (§ 1692k(a)(3)), and attorney’s fees (ibid.). This is sufficient deterrence that we should not lightly assume that Congress misstated its intent in the clear language of § 1692k(a)(2)(A).

Other published decisions holding that the consumer plaintiff is entitled to a maximum of $1,000.00 in statutory damages for the case, not per each violation, include the following cases.

Harper v. Better Business Services, Inc., 961 F.2d 1561 (11th Cir. 1992):

But when the language of a statute is so clear, that text must control unless there is a clearly expressed legislative intent to the contrary. [citations omitted]... Accordingly, we hold that the district court properly limited Harper’s additional damages award to $1,000 under the language of the FDCPA.

Broadnax v. Greene Credit Service, 106 F.3d 400 (6th Cir. 1997) [unpublished opinion]:

Section 1692k(a)(2)(A) provides that a person violating the FDCPA is liable for, "in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000." 15 U.S.C. § 1692k(a)(2)(A) (emphasis added). Statutory damages are thus limited to $1,000 per action, not per violation.

Powell v. Computer Credit, Inc., 975 F.Supp. 1034, (SD OH 1997):

A civil cause of action is authorized for violations of the FDCPA. 15 U.S.C. § 1692k(a) provides for actual damages, statutory damages not exceeding $1000, and attorney’s fees and costs. Statutory damages are limited to $1000 per proceeding, not per violation.

White v. Bruck, 927 F.Supp., 1168 (WD Wis 1996). Long citation to cases holding that $1,000.00 in total statutory damages is maximum which consumer plaintiff may recover for entire action.

Harvey v. United Adjusters, 509 F.Supp. 1218 (D. Or 1981):

t appears that the intent of Congress is that in an aggravated case of persistent and repeated illegal practices, the full $1,000 should be awarded; in other cases the Court has discretion to award any amount less than that or nothing at all in addition to actual damages.

McDaniel v. Asset Retrieval of Flordia,1996 WL 7001

(E.D.La 1996):

FN1. Plaintiff suggests that the Court may award statutory damages of $1,000 per violation. The Court finds that the proper statutory interpretation of Section 1692k(a)(2) is $1,000 per proceeding.

The Seventh Circuit Court of Appeals referenced the maximum statutory damages in its recent decision, Crabill v. Trans Union LLC, 259 F.3d 662 (7th Cir. 2001). In this case the plaintiff consumer alleged that the debt collector had committed multiple violations of the FDCPA, filing the action in his individual capacity and as a class action. After the case was filed and class certification denied, Trans Union made a $1,000.00 full statutory damages settlement offer, plus reasonable costs and attorneys fees as awarded by the court.

It appears, that while the consumer and consumer attorney may want to assert that the statutory damages should be multiplied by the violations, the courts which have addressed the issue have held to the contrary. When taken in light of the FDCPA and the intended impact on both consumers and debt collectors, such an interpretation makes sense. While it is easy to create and establish a violation of the FDCPA, the statutory damages are not intended to "punish" the debt collector. The "punishment" to the agency occurs in a number of ways: paying the consumer’s attorneys fees, class action liability, or administrative action taken by the FTC.

Rather, the statutory damages recognize that many of the FDCPA violations do not cause any significant damages to a consumer, so a modest amount of money may be ordered to be paid irrespective of damages. This allows the consumer and consumer’s attorney to reasonably handle the case to assuage the minor damages. There is no intention to allow the debtor to get rich or turn an FDCPA violation into a payday. ••

This article is provided for informational purposes only and not as legal advice by the author, Hefner, Stark & Marois, LLP, or the California Association of Collectors, Inc. With respect to the topic of this article, any person or agency with specific legal questions must to consult with the counsel of their choice.

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Well good article in a legal sense - pity this attorney is on the debt collectors payroll!

Okay, so I would interpret this to mean that consumers who are being harrassed relentlessly by debt collectors need to go apply for a home mortgage/refinance. Lets see, declined mortgagte on $175,000 house - okay, statuatory damages of $1,000 + actual damages @ $175,000 = $185,000 - works for me! 8)

Michael

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Does this mean that you guys didn't read the "Please Read Before Posting" section..........

http://www.debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=6727

Shame on you!! :x:x

Since I have been reading here for almost a year ago I didn't even think there would be anything new in the "Please Read Before Posting", especially something from just a week or so ago. And since I have been posting for six months now, it is too late to read it. :p Maybe we need a section "Please Read Me Now, Updated Weekly, If you don't know this information I will kick your butt and send CAs after you" type forum. :)

And really now, clicking on a link can be a lot of work.

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In my case, I get asked this question a lot. And never really seen the link that swede had on here. I did read the old boards read me first, don't think that was there, if it was I missed it. Or is was not something I had to deal with yet. I do so many searches for things, when I find them, I want to post them jic they are helpful to all.

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Sis,

Unless I missed it on the old board too, I think it is new. The date of the posting is August 19, 2003. Although with all of the problems we had with threads missing and the like it may have been there before the date indicates.

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Unless I missed it on the old board too, I think it is new. The date of the posting is August 19, 2003. Although with all of the problems we had with threads missing and the like it may have been there before the date indicates.

Oh dudes, settle down, I'm just messin with you..... ;) The link here is new, as of last week, it was somewhere on the old forum, can't remember where and maybe it's gone.

I think we'll put up a "Resources" forum instead of weekly updates, I don't think any of us has time for the weekly, unless you want to volunteer... ;)

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Unless I missed it on the old board too, I think it is new. The date of the posting is August 19, 2003. Although with all of the problems we had with threads missing and the like it may have been there before the date indicates.

Oh dudes, settle down, I'm just messin with you..... ;) The link here is new, as of last week, it was somewhere on the old forum, can't remember where and maybe it's gone.

I think we'll put up a "Resources" forum instead of weekly updates, I don't think any of us has time for the weekly, unless you want to volunteer... ;)

No, I know you were just giving us a hard time. That is why I posted what I did in the post before the one you quoted. ;)

Good idea on the "Resources" forum.

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Hey Sis! Excellent post. Thanks for the information. Luckily this only applies to the FDCPA and not the FCRA. It is definitely good to have this information backed up with so much case law.

I must have missed something...I seem to have learned (somehow) that actions under the FCRA were also limited to $1,000 per action. Is this not correct?

....KK

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I guess no one has lexis:

HN1 The Fair Debt Collection Practices Act, 15 U.S.C.S. § 1692 et seq., caps the liability of a debt collector to $ 1,000 plus fees and costs in an action maintained by an individual. 15 U.S.C.S. § 1692k.

I think that was the point of this thread....

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