the Business

 

3rd Party Debt Collectors are part of a $100 billion per year industry.  They exist for no reason other than to purchase consumer debt which others have already deemed uncollectible, and then try to succeed in collecting where others have failed.  

Debt buyers pay pennies on the dollar for this charged off debt, and then seek to collect, through hundreds of thousands of lawsuits, the full face value of the debt.  The emergence and vitality of this industry presents several legal, ethical and economic issues which merit...debate.  Peter A. Holland, Esquire (Maryland School of Law)

Nathalie Martin of Credit Slips recounts some of the recommendations Holland makes:

1. READ the complaint and supporting documents very carefully.

  • Is the named plaintiff the same party named in the documents supporting the debt?

  • Is there any chain of title tying the plaintiff to the debt?

  • Is the debt collector licensed in your state?

  • Is the contract for the debt even attached to the complaint?

  • How is the debt supported by evidence?

  • If there is some document attached to prove the debt, can you read it?

    • Was it generated after the fact?

    • By whom?

    • Has the statute of limitations run?

2. Know the elements of an “account stated” cause of action.

  • These include the establishment of a debtor-credit relationship,

  • an agreement by the debtor and creditor as to the amount due, and

  • an agreement by the debtor to pay the amount allegedly due.

3. Carefully scrutinize the affidavit. Here comes the fun.

  • Google your affiant.

    • Many people who have signed these affidavits have admitted under oath to singing thousands of these in one day, and many have signatures on Google that will not match the ones in your affidavit.

  • Look at your state’s affidavit rules.

    • Of course these rules will require affiants to have personal knowledge and likely yours will likely not qualify as evidence.

    • If the affidavit says this is true “to the best of my knowledge”

      • the affiant is admitting to not knowing the real facts; and

      • the affidavit can be stricken from the evidence.

4. Master the relevant rules of evidence. No personal knowledge, no recovery. No proof of debt, no recovery.

5. Tell the judge why this matters. Many of these debtors do not owe these debts.

And there’s lots more, like investigating whether the plaintiff had a checkered history (felons on staff? violations of the Fair Debt Collections Practices Act? FTC fines? evidence of past use of fraudulent affidavits?) and putting the judge on notice of any findings.

Holland concludes:  Allowing debt buyers to run roughshod over consumers and the courts is a denial of due process. It enriched junk-debt buyers at the expense of consumers, legitimate creditors, and our judicial system…Trying and winning these cases will have the systemic impact of helping restore a sense of justice and fairness which lies trapped beneath the heavy weight of the junk-debt buyer.

 

 

RESOLVE:  The One Hundred Billion Dollar PROBLEM in court is "robo-signing" and "lack of proof" in debt buyer cases.  Recent years have seen the rise of a "new industry" which has clogged the dockets of courts throughout the county.  It is known as the "debt buyer" industry.  Currently this market has manifested itself in the FANNIE AND FREDDIE "NON-PERFORMING" DEBT SALES to the likes of Goldman Sachs.  

Under basic common-law principles, a “CREDITOR CLAIMANT” must establish TITLE to a DEBT in order to have STANDING TO SUE and prevail on that claim.