The web site Credit Reporting & Debt Collection News claims that Chrystal A. Snow's $8.1 million debt collector judgment is a function of Texas law that would not be possible under the federal Fair Debt Collection Practices Act (FDCPA):
The FDCPA does NOT allow for PUNITIVE damages unless it is a CLASS ACTION.
The lack of punitive damages is a MAJOR flaw in the FDCPA. Debt collectors and debt buyers have NOTHING to worry about in MOST states, with California and Texas being notable exceptions.
The "up to" $1,000 in statutory damages in the FDCPA leaves collectors laughing all the way to their offshore bank accounts.
There's an amazing amount of litigation being pursued in debt collection, both by collectors pursuing unpaid debt and consumers claiming legal violations in how they've been treated.
In January, the Dallas Observer profiled Craig Cunningham, a Dallas man heavily in debt who has made thousands of dollars suing debt collectors:
While most Americans with unpaid bills dread the collector's call, Cunningham sees them as lucrative opportunities. Many collection and credit card companies, intentionally or not, violate little-known consumer rights laws, and Cunningham's favorite pastime is catching them doing so and then suing them. ...
While the FTC gets the bulk of consumer complaints, today more consumers are fighting back with their own lawsuits than ever before. In 2009, nearly 10,000 cases under FDCPA, FCRA or TCPA statutes were filed around the country, mostly in federal courts. That's a 50 percent increase from 2008, and an 83 percent growth from 2007.
A cottage industry has sprung up to counter the flood of cases. Two new companies now offer the credit and collection industries databases of repeat plaintiffs filing under the FDCPA.
Cunningham represents himself in the suits. He's suing one collector for $200,000 over how it pursued a $79.84 Time Warner bill.
It is almost a truism that money-lending companies have been very helpful for everybody that encounters unexpected expenses or financial emergencies. But unfortunately, based from the Federal Trade Commission, 78,838 people made formal complaints about
debt collectors in 2008. Though debtors, I know are well educated of the terms and conditions when lending takes place. At present, whether it is deliberately or not, many collection and/or money lending companies violates small-known consumer rights. I believe so that Cunningham was just fighting for his rights and that in fact, it's a profitable side job.