Lawsuits citing alleged Fair Debt Collection Practices Act (FDCPA) violations reached an all-time mark in 2009 at 8,287, easily topping the record of 5,188 set a year earlier, according to data from U.S. District Court complaint dockets.
The total includes FDCPA cases either filed in or moved to U.S. District Courts, according to WebRecon LLC, a Grand Rapids, Mich.-based research firm that compiled the data. The number of FDCPA lawsuits in 2006 and 2007 totaled 3,220 and 3,813, respectively.
A review of 2009 FDCPA lawsuits by ACA International, the association representing the nation's collection agencies, revealed the same trend. There may be a number of variables contributing to the rise, according to the association, including a spike in consumer debt as a result of the economic downturn and increased advertising by consumer attorneys over the Internet with respect to pursuing FDCPA claims.
ACA International officials, however, are not convinced a spike in FDCPA-related litigation means there has been a correlating rise in actual FDCPA violations. The litigation statistics do not prove the legitimacy of the alleged claims, nor do they show how many lawsuits were dismissed, according to an official statement from ACA.
"These statistics are of concern to consumers and debt collectors alike. For this reason, ACA International members remain convinced consumers need an easy, user-friendly means to resolve their concerns and disputes," says Rozanne Andersen, ACA's chief executive officer and general counsel. "Debt collectors are in the business of resolving consumer debt issues. Those collectors who violate the law in fact are rogues and not representative of the vast majority of the 125,000 individuals serving this fine industry today."
Other consumer statute lawsuits saw negligible changes in 2009, compared with a year earlier. Fair Credit Reporting Act (FCRA) lawsuits, for example, totaled 1,174, up slightly in 2009 from 1,164 in 2008. The total remains down from a high of 1,347 reached in 2007.
The total of consumer statute lawsuits filed in 2009, which includes FDCPA, FCRA and Telephone Consumer Protection Act actions as well as cases filed citing various state statutes and laws such as the Truth-in-Lending Act and the Gramm-Leach-Bliley Act, reached 10,128. The number of unique plaintiffs named in those cases was 9,697.
The three most active consumer attorneys in 2009 were: Ryan Scott Lee, with Krohn and Moss Ltd. in Los Angeles, representing 441 individuals; Nicholas J. Bontrager, also with Krohn and Moss Ltd., representing 329 individuals; and Todd Michael Friedman, with the Law Offices of Todd M. Friedman P.C. in Beverly Hills, Calif., representing 239 individuals.
Nationally, the FTC received more than 78,000 complaints about third-party debt collectors in 2008 and announced civil judgments of more than $1 million against agencies. The 2008 complaint total, the most recent complete-year figure available, was more than twice that of 2003. No other industry generated more calls. For the first half of 2009, the FTC logged 45,050 complaints, an increase of nearly one-third from the same period in 2008.