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Court affords consumers more rights in debt collection case

The U.S. 6th Circuit Court of Appeals recently decided a case that could afford consumers more rights in debt collection cases under the Fair Debt Collection Practices Act (FDCPA).

The FDCPA is a set of laws that provides consumers with protections from abusive debt collection practices. One portion of the FDCPA requires debt collectors to verify the legitimacy of a debt before the consumer is required to pay it.

For years, the “verification” standard was quite low. In a 1999 decision by 4th Circuit Court of Appeals, the court ruled that verifying a debt under the FDCPA “involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed.”

Essentially, that meant the debt collector just had to believe that the debt was real based on the original creditor’s word and then put it into writing. No other proof was needed.

However, last month the 6th Circuit Court of Appeals ruled that debt collectors must provide a more substantial “verification” of the debt that is supposedly owed.

“The verification provision must be interpreted to provide the consumer with notice of how and when the debt was originally incurred or other sufficient notice from which the consumer could sufficiently dispute the payment obligation,” the court held.

What this means is that debt collectors could stand to make a lot less money by purchasing outstanding debts for mere pennies on the dollar, and consumers have more ammunition when fighting off debt collectors.

Although the state of Wisconsin does not fall under the 6th Circuit Court’s jurisdiction, the case may still influence decisions made here.

For more information about your rights when facing debt collectors talk to an experienced bankruptcy lawyer in your area.

Source: Consumer Affairs, “Court gives consumers stronger protection from debt collectors,” Mark Huffman, Aug. 4, 2014

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