According to this New York Times article, during the current recession, debt collectors in New York have begun to file suits against debtors in record numbers – and often, this occurs without sufficient evidence that the collectors have the right person or the debtor owes the debt. Finally, judges in New York are beginning to strike back at abusive practices by collectors.
Some of the recent egregious collection cases New York courts have dealt with include:
- A debt collection company sued the wrong person, but pursued the case anyway. A Manhattan judge threw the case out.
- In a case against a Long Island woman, she discovered that she had been sued, and a process server claimed it served her in 2004 at an address she hadn’t lived at since 1998. A Nassau County judge said a debt collection firm that obtained the judgment did not provide “a scintilla of evidence” she even owed the debt.
- A Brooklyn judge reprimanded an attorney who claimed she remembered mailing a document to a credit card holder, despite the fact the document had been mailed three and a half years earlier. The document formed the basis of the collection lawsuit.
- A Staten Island judge noted that a credit card company was claiming 28 percent on a balance due, which is illegal under New York law. The company argued that the card was issued by a bank in Utah, which has no usury law. The judge ruled the agreement was not enforceable in New York.
Part of the problem in New York stems from businesses that purchase debts, with lists of names of debtors and amounts due, for pennies on the dollar from credit card companies. They often have no evidence about the debtors. The businesses then filed thousands of lawsuits without evidence to back up their claims.