FDCPA Prohibits a Debt Collector From Threatening Legal Action if There is No Intent to File Suit
Many debt collectors will falsely suggest or imply that legal action is imminent if a debtor does not pay a debt immediately. Occasionally the debt collector has authority to bring a law suit, but in most instances it is just a threat --- a false threat --- and one intended to scare a debtor into paying a debt which is otherwise not collectible.
The Fair Debt Collection Practices Act or FDCPA prohibits use of false threats to collect debt. This includes false threats of legal action when none is intended, or where the collection agency of law firm does not have authority to bring legal action.
Federal Law Suit Filed Against Arizona Law Firm Ryan Rapp & Underwood, PLC for Falsely Threatening Legal Action
My law firm recently filed suit in the U.S. District Court for the District of Arizona against the Arizona law firm of Ryan Rapp & Underwood, PLC for doing just this. It sent an Arizona debtor a letter threatening legal action (“This is not to be construed to mean that my client will not bring legal action to collect this indebtedness in the meantime.”) for a debt which was well past the applicable Arizona statute of limitations (repossession in or before June 2010). This initial threat was reinforced in the same letter with another threat of legal action (“If you fail to comply with this demand, further legal action may be instituted.”); and yet another (“In the event suit is filed, we will seek to recover attorneys' fees, interest, and court costs as well as the outstanding principal balance due and owing.”)
What to Do if you receive a letter threatening legal action
If you receive a letter from a collection lawyer or collection agency threatening or suggesting legal action is imminent, you should contact an attorney who practices in the area of FDCPA law. He or she can evaluate the letter and the facts surrounding the debt, and determine if the threat is real or likely to be false. If the threat is real, the attorney can assist you in determining which avenue would be best to resolve the debt. If the threat is false, this attorney can assist you in taking a claim against the colleciton lawyer or collection agency under the FDCPA for money damages.