But why wouldn't it be a mockery of the system to allow the attorney to make 500% of your damages for their fee? They could even get 1000% How is that fair?
The FDCPA statutory award is in the nature of a fine. It is designed to punish the offender and deter him from repeating the violation. It has no relation to the fee an attorney will charge you. Actually, it's a good deal, because the other side pays for your lawyer.
Is it fair? Yes, considering the attorney spent seven years in college to be able to represent you. You only alternative is to represent yourself, and be prepared to argue your case in front of a federal judge. You'll still only get 1,000 at the end if you prevail. Most pro se litigants are ill prepared to argue in federal court. The standard is much higher.
In state cases, the attorney must submit an affidavit and proof that his fees are reasonable. I'm not sure if federal court requires this, but I assure you an attorney cannot just submit some huge bill and expect that a judge will approve it.