How To Sue Creditors For FDCPA Violations

Last Updated: Dec 07, 2022

The FDCPA generally only applies to debt collectors, not creditors

If your rights have been violated, you may be entitled to compensation

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If you have a debt in default, you will probably receive communications from debt collectors looking to retrieve the money you owe. Debt collection agencies must follow strict guidelines due to the FDCPA. Creditors are a little different and do not always have to follow the FDCPA guidelines.

What Is The Difference Between A Creditor And A Debt Collector?

Put simply, the creditor is the person or entity that extended you credit in the first place (in other words, your original lender). Creditors typically don’t collect their own debts. Debt collectors are third-party companies who are hired by creditors and/or lenders to collect debts.

Debt collectors must follow strict guidelines under the FDCPA when collecting debts. Creditors typically do not collect debts, but in some cases they may do so. If a creditor collects its own debts, the creditor may need to comply with the FDCPA.

When Can You Sue Creditors For Violating The FDCPA?

To sue a creditor for violating the FDCPA, they must have:

  • Posed as a third-party debt collection agency 
  • Used a different name than the creditor’s company name when trying to collect debts
  • Been dishonest about who they are

Creditors rarely collect their own debts, but when they do, any of the above actions would be in violation of the FDCPA.

How To Sue Creditors For An FDCPA Violation?

If you find a creditor is in violation of the rules and regulations of the FDCPA, you can pursue legal action. Be sure to have solid proof and hire legal counsel.

There are a multitude of ways you can take legal action:

  1. Sue them in state or federal court for damages.
  2. Sue them in small claims court (typically quicker and requires less legal counsel).
  3. Report them to the FTC or CFPB (Consumer Financial Protection Bureau).
  4. In some cases, you may want to report them to the Attorney General. Typically this is when you believe they have violated one or more state laws in addition to violating FDCPA.
  5. Use the violations as leverage to settle your debt with the creditor. (This can be very effective and will land you with fewer legal fees and more cleared debt if done right.)

The best action to take will vary based on you and your situation. In any case, seeking legal counsel, such as a consumer protection attorney, will help you discover the right moves to make.

Bottom Line

It's important to know the difference between debt collectors and creditors. Both are held to the standards set by the FDCPA, though. If a creditor is found violating the rules of the FDCPA, you may be entitled to compensation.

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