Old Consumer Protection Law Leads To Rise In Lucrative Lawsuits Against Debt Collectors

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A recent article in the Wall Street Journal discussed how an old law that was recently reinterpreted by the FTC has allowed debtors to file suit to stop debt collection abuse. Those who face harassment by these collectors are increasingly turning to lawsuits to stop the endless phone calls, and are increasingly finding themselves being rewarded financially for their trouble.


Cell Phone Keypad Charlotte Bankruptcy Lawyer North Carolina Debt Collection AttorneyIn one case profiled by the author of the Wall Street Journal piece, a woman named Heather Nelson won $571,000 after suing Santander Consumer USA, an especially abusive debt collector. In that case, Nelson’s attorney noted how Santander called her cellphone 1,026 times and left 116 prerecorded messages, all in an attempt to collect an old debt.


The lawsuit is representative of dozens of others that have taken place in recent years, all of whom are based on a law that was passed several decades ago but which has recently come into more popular use. The law is the Telephone Consumer Protection Act and it was passed in 1991 by legislators who attempted to end unwanted and expensive telemarketing calls to people’s cellphones. Much has changed since 1991 and cell phone calls have become much cheaper, with some people using mobile phones as their exclusive means of communication. 

Despite these changes, the law remains in place and it has proven to be a useful way of extracting money from overly aggressive debt collectors. The TCPA specifically prevents the use of prerecorded calls to residential landlines without prior consent, something that eventually led to the creation of the Do Not Call list. The law also says that calls or messages sent to cellphones, faxes or other such paid services require express consent even for live calls that are done through the use of an auto-dialer.


The law says that except for cases of emergency, any company that uses an auto-dialer to call a cellphone without prior consent faces a fine of between $500 and $1,500 per call. Experts say filing claims under the TCPA is often easier than under the Fair Debt Collection Practices Act, legislation that contains far more loopholes for debt collectors to slip through.


A 2008 ruling by the FTC said that debt collectors ought to be subject to the confines of the TCPA, a ruling that led to an explosion in cases filed under the Act, with 350 cases having been filed since 2011 alone. Debt collectors have complained about the rise in litigation, saying that they often have no choice but to use auto-dialers given how many calls must be made every day. Thankfully, the law remains in place and consumers who are harassed by debt collectors have yet another avenue of stopping the abusive behavior.


If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.



“Curbs on Cellphone Calls Pay Off for Lawyers,” by Ryan Knutson, published at WSJ.com.

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