Protecting Arizona Consumers from Unfair Debt Collection Practices

Laws protect Arizona consumers from unfair practices by debt collectors. The Fair Debt Collection Practices Act is one of them. A bill collector that breaks this federal law – before, during, or after your bankruptcy – can be punished with injunctions, damage awards, and other penalties.

If a debt collector violated the bankruptcy court’s discharge order, for example, you could recover actual damages, punitive damages, attorneys’ fees, and court costs! Speak with a bankruptcy lawyer in Phoenix,AZ to seek compensation for that sort of violation.

Consumer Protection Law Prohibits Abuse By Debt Collectors

The Fair Debt Collection Practices Act (FDCPA) has been around for a long time, since 1978. The FDCPA protects consumers like you from debt collectors who use abusive, deceptive, or unfair tactics to collect money.

Did a debt collector violate the FDCPA before you filed for bankruptcy protection? During bankruptcy proceedings? After the discharge? Taking that debt collector to court may be the only feasible course of action.

Requirements for an FDCPA Claim

There are four simple requirements to an FDCPA claim against a debt collector:

  1. You, the injured party, must be a consumer. The statute defines “consumer” as the person owing the debt, his or her spouse, the parent of a minor owing the debt, as well as the guardian, executor, or administrator.
  2. The obligation must be a consumer debt. For example, you took a loan to buy the family car or charged food and clothing to a credit card. You must also be in default on that debt, meaning it’s past due.
  3. The communication must have come from a debt collector. A debt collector is in the business of collecting on defaulted consumer debts owed to others. A creditor is not a debt collector UNLESS collecting its own consumer debts under a different name.
  4. The debt collector’s communication must have violated the FDCPA in some way.

Obvious or sneaky, threatening or syrupy, unfair demands for payment must be dealt with. Never believe the incessant calls and nasty letters were “just an honest mistake.” The law holds all debt collectors to higher standards.

What Communications Violate the FDCPA?

Be ready to spot violations of the FDCPA. Here are some debt collection activities and practices that violate consumer protection law:

  • Making false, deceptive, or misleading communications;
  • Threatening physical violence, damage to property, or to your reputation;
  • Using symbols or stationary implying the correspondence is from the government;
  • Unfairly attempting to collect on a debt (deceiving, misleading, or lying);
  • Calling you late at night or at odd hours;
  • Knowing you are represented by counsel, but failing to communicate with your lawyer;
  • Contacting you at work when told not to;
  • Continuing to contact you after being notified in writing not to;
  • Using obscene or profane language or abusive words;
  • Telephoning repeatedly to annoy, abuse, or harass you;
  • Implying you will be arrested or imprisoned for nonpayment;
  • Threatening garnishment of your wages or attachment and sale of your property;
  • Collecting more than what is lawfully owed (including interest, fees, charges, or incidental expenses); or
  • Taking or threatening to take your property as “collateral” when no legally enforceable security interest exists.

As a consumer, you have important rights. Talk to a lawyer about enforcing them.

Only Defense to FDCPA Violation

The only defense to wrongful debt collection is showing the violation was not intentional and was a bona fide error. That’s despite maintaining procedures reasonably adopted to avoid just such an error. Otherwise, when an unlawful act occurred – intentionally or unintentionally – the debt collector should be held strictly liable. What does that mean for you? Keep reading!

Damage Awards, Injunctions, and Other Remedies

If you have been treated unlawfully by a collections agency and want to do something about it, then you must file a lawsuit. That’s how you put a stop to it and seek damages. Take a closer look.

The consumer files a civil lawsuit against the debt collector alleging one or more FDCPA violations. If the consumer wins the case, then the court issues an injunction against the debt collector, ending all communications by letter, phone, or email. But that’s not all. The court can order the debt collector to:

  • Pay Money Damages: This is for any actual harm caused. For example, damages resulting from physical or emotional distress, lost wages, or wrongful garnishment.
  • Pay Punitive Damages: Punish the debt collector with up to $1,000 in punitive damages.
  • Pay Attorney’s Fees and Court Costs: Recover the reasonable attorney’s fees and court costs spent in bringing the lawsuit and litigating it.

What About Your Family Member or Co-Worker?

Wrongful collections and unlawful communications by debt collectors can cause problems for anyone residing or working with the debtor. The ill effects aren’t restricted to the person whose name is on the credit card. Someone negatively affected by the debt collector’s actions may have an FDCPA legal claim, too. This could be your spouse or child, or a co-worker who shares an office with you.

Timing Your FDCPA Claim

Let’s talk about the timing of an FDCPA claim against a debt collector. First, if the claim arose before you filed for bankruptcy, then the claim is part of the bankruptcy estate administered by the trustee. (List the lawsuit as a contingent, unliquidated claim on Schedule B.)

Second, if the claim arose during the bankruptcy proceedings, then all damages awarded remain your property. Still another FDCPA violation could occur after the bankruptcy discharge. Consult an experienced bankruptcy lawyer with Allegiant Law Group about recovering damages, attorney’s fees, and court costs.

Arizona Fair Debt Collection Practices Act

In Arizona, debt collection agencies are financial enterprises licensed by the Dept. of Financial Institutions. State law makes some unlawful debt collection practices a Class 1 misdemeanor.

A collection agency convicted of violating the Arizona Fair Debt Collection Practices Act will lose the license to practice here and suffer criminal sanctions. Penalties include up to six months in jail, fines, and years of probation. ARS § 32-1056.

What is a collection agency?

“(a) All persons engaged directly or indirectly in soliciting claims for collection or in collection of claims owed, due or asserted to be owed or due.

(b) Any person who, in the process of collecting debts occurring in the operation of his own business, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts.”

ARS § 32-1001(2)

How do collection agencies violate Arizona law? By doing any of the following:

  • Conducting business as a collection agency without a license.
  • Directly or indirectly aiding, abetting, or receiving compensation from an unlicensed person.
  • Advertising a claim for sale or threatening to advertise a claim as a way of enforcing payment.
  • Failing to render account and payment to the client (or creditor owed the money) for whom collection was made within 30 days from the last day of the month following collection.
  • Failing to deposit collected money in a bank and failing to keep it there until remitted to clients (or creditors).
  • Failing to keep records of the money collected and remitted.
  • Aiding or abetting, directly or indirectly, any person or organization in violating Arizona’s fair debt collection law.

See ARS § 32-1055.

Are you or a family member being victimized by a someone violating Arizona law? You could contact the Arizona Attorney General’s Office. Or call us and arrange to meet with one of our bankruptcy lawyers. Get the help you need.