Protecting Consumers in Debt Collection Litigation and Arbitration:A Roundtable Discussion
Everyone should commend the FTC for continuing these roundtables as they are much needed since Federal as well as State Laws need to be completely overhauled. We need to remind those in charge that laws need to be revised not only to reflect inflationary considerations but to also consider the fact that we have modern day technology that did not exist when many of these laws were created, regarding the collection of debt. A couple of credit card statements should not be sufficient validation of debt? Unfortunately not revisiting old laws in order to make necessary changes are the main factor giving the debt collection industry the upper hand, specifically during litigation of a debt against a consumer. The debt collection industry is totally out of control and as our economy worsens it will continue to spin out of control until the powers that be step in and do something about it. "Unjust Enrichment" - why should a collection agency be able to purchase, for example, a $20k debt for merely a $100.00 and then attempt to collect the entire amount, including being able to receive a Judgment for the entire amount. Is this really fair to any consumer? Maybe we could change the law to only allow the Judgment for the amount the collection agency paid for the debt and the collection agency must prove to the Court what it paid. Also once debt is sold off from the original creditor, a consumer no longer has the option of dealing with the original directly. Again, is this fair to the consumer? One thing not mentioned in the FTC of course is an establishment of some sort of laws related to collection of small business debts. Many, many people are losing small businesses daily and because there is nothing in place to try to protect them as well, it is basically a free for all for collection agencies. Of course some savvy attorneys could attack in return but most require payment up front for services related to this type of scenario and if you are already not able to pay bills you certainly cannot afford this option. 1.) Make the practice of selling debts like yo-yos to be tossed around repeatedly illegal. There is often no clear chain of title to a debt not to mention records are destroyed by the original creditor - so why even allow this practice of selling debts to go on to begin with? 2.) Also hold the original creditor to the FDCPA - I actually had a Chase rep talk to my husband about a debt I could no longer pay and his statement was "Lisa should get a job in McDonald's and pay this debt" - nice, heh? Believe it or not that was one of the nicer calls. 3.) If debt enters litigation it should only be allowed to be done by the original creditor - no third party debt collector should be allowed to file suit. It is obviously overwhelming our Court systems and California has the right idea by not allowing this at all. Can you imagine how much worse the situation is going to get when more and more people are defaulting? Something definitely needs to be done soon. 4.) Validation of debt needs to be very, very specific. I actually have a notarized affidavit from LHR that states Bank of America destroys all records after a certain amount of months. So why is anyone trying to collect something that no longer exists on paper? 5.) Establish collection laws regarding business debts. 6.) Stop the robocalls from collection agencies and original creditors also. Create a law that states they must call from a real identifiable number as very few of them call from a recognizable number in order to trick the consumer into answering.