Junk Debt Buyers of Credit Card Debt and Some of Their Collection Law Firms Make the News for Their Excesses

Here is an Alabama attorney explaining the reality of [credit card] debt buyer lawsuits.

In this New York Times feature article, here is an in-depth look at just how sleazy credit card debt junk debt buyers truly are, Paper Boys – Inside the Dark, Labyrinthine and Extremely Lucrative World of Consumer Debt Collection.

The CFPB alleges that the firm operates “like a factory,” producing hundreds of thousands of debt collection lawsuits against consumers on behalf of its clients, mainly major credit card-issuing banks and debt buyers. Between 2009 and 2013 the firm filed more than 350,000 debt collection lawsuits in Georgia alone. The Georgia suits are the focus of the CFPB’s action.

According to cnbc.com, “The debt buyers find it very lucrative to file a lot of lawsuits at once, without doing a lot of work,” said Margo Saunders, staff attorney with the National Consumer Law Center. “They’re making so much money by violating the law, there’s little reason for them to comply.”

[Inside ARM is THE debt collection industry trade publication. ]Inside ARM – A U.S. District Judge last week ruled that a debt collection law firm violated the Fair Debt Collection Practices Act (FDCPA) by not conducting a “meaningful review” of a collection action filed against a consumer. The judge used reasoning from the landmark case Lesher, decided three years ago.

Inside ARM – The Consumer Financial Protection Bureau (CFPB) Monday said it has filed a lawsuit against a debt collection law firm and its three principal partners alleging that the firm was a “lawsuit mill” that churned out debt collection actions and violated the FDCPA en masse.Inside ARM – A U.S. District Judge last week ruled that a debt collection law firm violated the Fair Debt Collection Practices Act (FDCPA) by not conducting a “meaningful review” of a collection action filed against a consumer. The judge used reasoning from the landmark case Lesher, decided three years ago.

... and how to deal with [credit card] debt buyer lawsuits.

 Midland Funding Caught with Its Hand in the Cookie Jar [from the Washington Post]

Leoncio Paz took on one of the country’s biggest debt collectors — and won.

The case was pretty cut and dry: Midland Funding sued Paz for $5,216 on an old credit card debt. Paz, 48, said the amount was more than he owed. But rather than accept the charges, as so many others do, the maintenance man from Alexandria, Va., contacted a legal aid attorney.

That attorney figured out that the amount Midland sought in its sworn affidavit included all sorts of fees that the company lacked the documentation to collect. And when Paz challenged the case on those grounds,

Midland dropped the suit.

Credit card debt is the most common type of defaulted debt [junk debt buyers] buy, but they also snap up portfolios of student loans, medical debt, utility bills, tax liens, car loans and mortgages, according to the Center for Responsible Lending.

The three largest publicly traded debt buyers — Encore, Asta Funding and Portfolio Recovery Associates — spent more than $1.2 billion last year to buy portfolios of debt worth more than $85 billion, according to regulatory filings.

Encore, which owns the debt of one in five Americans, accounted for most of that spending. The company said it files lawsuits in fewer than 5 percent of the open accounts in its total portfolio.

Read this blog about consumers who successfully resisting collection attorneys.

 

 

Related Post

Leave a Reply

Your email address will not be published.