Last week, Rep. Matt Cartwright (D-Pa.) introduced the legislation to amend the Fair Debt Collection Practices Act (“FDCPA”) in reaction to the Supreme Court decision Marx v. General Revenue Corp. In this decision the court ruled that regardless of whether an FDCPA lawsuit was brought in bad faith a prevailing debt collector could be awarded costs at the discretion of a district court.
Cartwright said: “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. My legislation would correct the Court’s decision and restore the original intent of the FDCPA.”
According to the new legislature, the FDCPA would be amended so that the costs would be only available to a winning defendant when the plaintiff brings a suit in bad faith or for the purpose of harassment.
Several consumer advocate organizations have endorsed the bill, including the National Association of Consumer Advocates and the American Association for Justice. The bill has been referred to the House Financial Services Committee and Committee on the Judiciary.