FDCPA Debt Collector Liability and Penalties 2 — Questions and Answers
Question 1: Which government agency has primary rulemaking authority over the FDCPA for non-bank debt collectors?
- Consumer Financial Protection Bureau (CFPB) (Correct answer)
- Federal Trade Commission (FTC)
- Office of the Comptroller of the Currency (OCC)
- Federal Reserve Board
Correct answer: Consumer Financial Protection Bureau (CFPB)
The Dodd-Frank Act transferred primary FDCPA rulemaking authority for non-bank entities to the CFPB.
Question 2: Can individual employees of a debt collection company be personally liable for FDCPA violations?
- Yes, individuals who materially participate in violations can be personally liable (Correct answer)
- No, only the collection company as an entity can be sued
- Yes, but only supervisors and managers
- No, personal liability requires a separate tort claim
Correct answer: Yes, individuals who materially participate in violations can be personally liable
Courts have held that individuals who actively participate in FDCPA violations may be sued personally alongside the collection company.
Question 3: A debt collector violates the FDCPA. The collector's defense is that it relied in good faith on FTC guidance. Is this a valid defense?
- Yes, relying on FTC formal guidance can serve as a defense (Correct answer)
- No, ignorance of the law is never a defense under the FDCPA
- Yes, any government guidance eliminates liability
- No, only court decisions can serve as a defense
Correct answer: Yes, relying on FTC formal guidance can serve as a defense
The FDCPA provides a defense when a violation results from reliance on official FTC advisory opinions or formal guidance.
Question 4: What type of damages can a consumer recover under the FDCPA beyond statutory and actual damages?
- Attorney's fees and court costs (Correct answer)
- Punitive damages up to $10,000
- Treble damages on actual losses
- Consequential damages for business losses
Correct answer: Attorney's fees and court costs
In addition to actual and statutory damages, the FDCPA authorizes recovery of the consumer's reasonable attorney's fees and court costs.
Question 5: A debt collector commits multiple FDCPA violations in a single collection letter. How many separate lawsuits can the consumer file?
- One lawsuit covering all violations in the letter (Correct answer)
- One per violation contained in the letter
- Unlimited suits as long as filed within one year
- One per type of violation regardless of frequency
Correct answer: One lawsuit covering all violations in the letter
Multiple violations arising from a single communication are generally treated as one cause of action in a single lawsuit, not separate suits.
Question 6: Under the FDCPA, actual damages can include which of the following?
- Out-of-pocket losses and emotional distress (Correct answer)
- Loss of future earning potential
- Punitive awards for egregious conduct
- Statutory penalties under state law
Correct answer: Out-of-pocket losses and emotional distress
Actual damages under the FDCPA may include out-of-pocket expenses and proven emotional distress caused by the collector's illegal conduct.
FDCPA Debt Collector Liability and Penalties 2
Which government agency has primary rulemaking authority over the FDCPA for non-bank debt collectors?