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Bogus FDCPA Lawsuits on the Decline

31-Jan-2013

The total number of lawsuits filed in federal district courts by consumers seeking damages under the Fair Debt Collection Practices Act (FDCPA) declined nearly seven percent in 2012 after years of steady growth. This was somewhat expected as the attorney driven “attack the credit industry” mentality couldn’t possibly last. That all lenders and such are evil and positioned only to prey on innocents was doing damage to a long running and vital part of the financial markets and industry as well.
There was a little less than 11,500 FDCPA lawsuits against debt collection and related companies were filed in 2012, according to data from WebRecon LLC. In 2011, there were 12,300 such lawsuits filed.
FDCPA cases filed in 2012 had been tracking lower than 2011 for most of the year. But around mid-year, it became apparent that 2012 could see a year-over-year decline. It was a significant development because it reversed a years-long trend in FDCPA case growth. It seemed like finally, all the bogus lawsuits were being weeded out and this helps the legitimate lawsuits get the quality time they need to be resolved justly.
Since WebRecon started tracking cases claiming FDCPA violations in district courts, year over year growth in lawsuits has been strong. From 2006 to 2009, FDCPA cases jumped nearly 150 percent as consumers became more marketed to about the possibility of easy lawsuit money to be had with the slightest complaint or violation with any type of debt collection or related company, and the courts became more lax in what they accepted as credible motive and proof of evidence. From 2008 to 2009, the year-over-year growth rate peaked at 54 percent. But after 2009, the rate of growth slowed, with FDCPA cases up only 8.6 percent in 2011 compared to 2010.


 


As FDCPA cases have declined, lawsuits targeting the ARM industry claiming violations of other consumer statutes have increased. In 2012, cases claiming a violation of the Fair Credit Reporting Act (FCRA) were up 17 percent from 2011; cases claiming violations of the Telephone Consumer Protection Act (TCPA) were up nearly 34 percent.

The volume of FDCPA dwarfs those of FCRA and TCPA cases combined, but the rise in TCPA suits has caused concern among debt collectors.
In 2012, there were 2,249 FCRA suits filed and 1,101 TCPA claims made in court.

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