Consumers awarded damages of $500,000 in FDCPA lawsuit

The Fair Debt Collection Practices Act (FDCPA) carries a maximum statutory penalty of $1,000 regardless of the number of violations committed or the egregiousness of the violations.  Given those mild remedies, clients often ask us whether an FDCPA case is even worth pursuing.  A jury verdict in the 2009 case of Fausto v. Credigy Services Corporation, 5:07-CV-05658-JW (N.D. Cal. Apr. 21, 2009), confirms the potential damages which may accrue when debt collectors blatantly ignore the mandates of the FDCPA.

Under the FDCPA, consumer plaintiffs may recover a statutory award, actual damages, costs, and attorney’s fees when bringing a successful action.  Plaintiffs may also pursue state law tort claims, such as invasion of privacy and intentional infliction of emotional distress, which allow for a recovery of punitive damages.

In Fausto, a federal jury awarded the consumer plaintiffs $500,000 in damages, including $100,000 in actual damages and $400,000 in punitive damages, to compensate them for the debt collector’s misconduct.  The plaintiffs were also awarded their attorney’s fees and costs in pursuing the action.  While the damages award in Fausto is not typical (as the evidence showed over 90 threatening calls and a failure to heed cease and desist letters), the verdict certainly sends a strong message that abusive and harassing debt collection tactics will not be tolerated.