American Consumers Use of Credit Cards Started becoming Popular in the 1970s

Interviewer: What does the acronym FDCPA stand for?

Andrew Campbell: That’s the Fair Debt Collections Practices Act.

It was passed in the late 1970’s because Congress saw a number of problems that consumers in the country were facing.

At this time, our country was at the initial beginning stages of building a consumer credit type of culture.

The 1970’s was a time when credit cards became a lot more common.

Initially they were only given to the rich but eventually this expanded to the general population in the early 1980’s.

Obviously, as the number of debts rise in real numbers, the number of defaults—meaning the failure to honor the contract, for example, by not paying a bill when it’s due—also rose.

So, Congress saw that there were a lot of problems with debt collectors.

Congress saw that the states were not regulating them.

The FDCPA Was Created to Protect Consumers from Unfair or Abusive Debt Collectors, Who at the Time, Were Not Being Regulated on the State Level

They felt that the abusive debt collection practices contributed to the number of personal bankruptcies.

It contributed to marital instability. It contributed to loss of jobs and invasions of privacy. That’s why the legislation was passed.

Interviewer: It was an attack on people’s life styles and their ability to function as good citizens of the U.S.

Andrew Campbell: Yes, I think you that is a very good way of saying it.

Everyone needs to pay their bills and do it to the best of their ability. Of course. Imposing standards on what is acceptable is simply a restatement of how people in society believe that everyone should be treated.

The FDCPA is one of the few laws—you really don’t see this much—where it actually has a findings and purpose clause.

Congress had commissioned a study on the debt collection industry.

All the crises I just mentioned—the personal bankruptcies, marital instability, loss of jobs, invasion of privacy—was specifically stated in the statute.

Congress saw that the existing laws and procedures for addressing these injuries are inadequate.

They felt there are other means, other than misrepresentation or other abuses, available for effectively collecting debts.

In other words they recognized that good collectors that followed the law were also the victims of bad debt collectors. Those bad collectors gain a competitive advantage over those that choose to follow the law.

No one should encourage a race to the bottom.

In other words, good debt collectors should really encourage this law being honored, because then it creates an even playing field for them.