Last week, the Supreme Court ruled that debt collectors can’t use a “bona fide error” defense to avoid being sued for misinterpreting the Fair Debt Collections Practices Act (FDCPA). In other words, if a debt collection agency makes a demand that’s in violation of the Act, it can’t say it didn’t know any better. Well, it can, but you can go right ahead and sue.
Collection agencies don’t like this ruling because they say the FDCPA contains vague language that can easily be misinterpreted. In a New York Times article about the ruling, debt collectors say websites like debtorboards.com just show people how to abuse the fuzzy language of the FDCPA to avoid paying debt they legitimately owe. But the founder of the site, former bill collector Steven Katz (who was not involved in the Supreme Court case), says he started the site after a collection agency damaged his credit history with a “bogus bill,” and that he’s only teaching consumers that they can use the law “as both a shield and a sword” against sketchy collectors.
“Learning How to Fight the Collector” [NYTimes]