FDCPA lawsuit

Cingular Wireless customers in Wisconsin discovered that their past due accounts were suddenly higher than they had been. That's because the company that purchased Cingular's debt, AFNI Inc., had been tacking on a 15% unauthorized collection fee. The customers brought a class action lawsuit against the collection company for violating the Fair Debt Collection Practices Act (FDCPA). Ironically, AFNI claimed that it didn't know that it could charge a 15% collection fee.

The 7th Circuit Court of Appeals ruled against AFNI and reasoned that the company had no right to charge the fees under the FDCPA or under Wisconsin's debt collection laws - and that it should have known that their acts were illegal.

AFNI was a debt buyer

AFNI, Inc., the Bloomington Illinois based debt collection company, was classified as a debt buyer by the court. A debt buyer is someone who purchases bad debt from companies such as Cingular Wireless for pennies on the dollar and then tries to collect what Cingular couldn't. Debt buyers, also known as zombie creditors (because the bad debt never seems to die) often use unethical means to collect debts and may tack on collection fees that many consumers simply pay because they don't know that the FDCPA prohibits it.

FDCPA & you

The FDCPA prohibits debt buyers - any debtor who purchases debt from the original creditor - from charging unauthorized fees. When debt buyers violate the Act, they may be liable to consumers for damages - $1,000 per violation to be exact. The FDCPA also regulates what all debtors cannot do - such as being rude, engaging in harassing behavior or calling others about your debt. If you've been charged for unauthorized collection fees or are being harassed over a debt, contact an experienced debtor's right attorney to discuss your situation and evaluate your options. Consultations with a lawyer are free, without obligation and are strictly confidential.