Bill seeks to bolster consumer protections by countering SCOTUS decision

In hopes of further strengthening consumer protections, new legislation was recently introduced in the House that seeks to directly offset a U.S. Supreme Court decision by amending the Fair Debt Collections Practices Act (FDCPA) – the Act that protects individuals from harassing debt collectors.

Specifically, last year the Supreme Court rendered a decision in Marx v. General Revenue Corp. that addressed the issue of whether a defendant in an FDCPA lawsuit – such as a debt collector – may be entitled to an award of costs if it prevails. Unfortunately, for victims of creditor harassment, the Court determined that prevailing defendants can be awarded costs at the discretion of the district court, regardless of whether there is proof that the suit was brought to harass or in bad faith.

Sadly, while the FDCPA is typically one of the best lines of defense against unscrupulous debt collectors, it is believed that this particular Supreme Court decision may ultimately have a “chilling effect” on individual consumers seeking recourse through the FDCPA.

Indeed, in a recent press release, Rep. Matt Cartwright – the sponsor of the proposed legislation – was quoted as saying, “Due to the Supreme Court’s unfortunate decision, consumers, particularly those who are economically vulnerable, may choose to forego legal action when subjected to abusive and illegal debt collection practices given the potential high costs of losing a suit.”

In no uncertain terms, the new legislation would, if passed, only allow courts to award costs to a prevailing defendant if the action was initially brought in bad faith and for the purpose of harassment, and in no other circumstances. According to Cartwright, the proposed amendment is essential to not only rectify the Supreme Court’s decision but also to restore the intent of the FDCPA.

Legal guidance may be needed

In today’s world, consumers need all the help they can get when dealing with ruthless debt collectors. In fact, complaints against debt collection agencies continue to remain high despite the protections afforded under the law. And, while it remains to be seen if the recently introduced legislation will gain significant support, its introduction is an important step towards strengthening the laws that protect consumers from merciless creditors.

Many individuals have found that the counsel of a debt defense attorney to be extremely helpful when dealing with mounting debt. Consequently, if you are currently buried under insurmountable debt, it is often best to consult with a knowledgeable attorney who can help eradicate creditor harassment and assist with efforts to reduce, or even eliminate, debt.