When a debt goes to collections, it may mean that a collection agency has purchased the debt from a creditor, such as a credit card company or bank. A person’s debt is purchased for a fraction of the value of the debt itself for as little as 3-10 cents on the dollar. The collection agency stands to make an enormous profit off of that debt, which is still owed even though it is no longer owned by the original creditor. The debt can continue to grow while it is in the hands of the collection agency. Interest and fees can still apply to a person’s debt, although you may not be warned of such from the collection agency. If you have received communications from a debt collection agency about your debt, it is possible that the amount you owe is actually higher than what is stated. As of May 2016, this may be illegal under the Fair Debt Collections Practices Act, or FDCPA.
In Avila v. Riexinger, plaintiffs Annmarie Avila and Sara Elrod both received notices from Riexinger & Associates, a Georgia-based collection agency trying to collect on their debt. These notices stated each plaintiff’s “current balance” as if it were a static figure. The balance stated in the notices did not reflect any interest the balance had accrued or any fees that may make the amount larger. Nowhere in the notice were the plaintiffs warned that they would incur late fees for not paying by a certain deadline.
The bottom of the notice, a perforated section that allowed for the plaintiffs to mail back a check with their credit card information, also failed to warn plaintiffs that due to accruing interest and fees the amount could be different from what was truly owed. To the plaintiffs, it was implied that the “current balance” was static and would be sufficient to satisfy the debt. They believed that if they paid the amount shown in the statement the debt would go away. In reality, Avila’s debt had been accruing interest every day at a rate of 500% per year. She alleged this was true because the defendant had tried to collect it from her.
According to Section 1692(e) of the FDCPA, debt collectors are not allowed to use false, deceptive, or misleading representation or means to collect on any debt. Avila and Elrod filed a complaint against Riexinger for falsely representing the amount of the debt. The United States Court of Appeals for the Second Circuit held that Riexinger’s collection letters, by failing to disclose that the amount owed could increase over time, violated 1692g(a) of the FDCPA.
Our firm has successfully sued debt collectors under the same theory and collected thousands in damages for our clients because of such abusive, misleading and deceptive conduct. If you believe a collection agency is purposely misrepresenting the debt you owe, you have the right to fight back. Most debt buyers do not expect debtors to exercise their rights under the FDCPA, which is why many attempt to get away with breaking the law. A headstrong FDCPA lawyer in Fort Lauderdale like Attorney Jibrael S. Hindi and his associates can evaluate your situation and determine if you have a case. It is possible to sue the collection agency and be compensated for their wrongdoing. At The Law Offices of Jibrael S. Hindi, you don’t pay us a dime until YOU get paid! Call 1-844-JIBRAEL or contact us online today for a free consultation.