The New York Times has an excellent article on the problem with debt collection lawsuits. The article starts with this:
“The same problems that plagued the foreclosure process — and prompted a multibillion-dollar settlement with big banks — are now emerging in the debt collection practices of credit card companies.”
Of course, those of us in the trenches who are defending consumers know that this is not an issue that is “now emerging.” This is an issue that has been going on for a long time. Debt collectors have no paperwork that supports their claim that the consumer owes money. Why not?
When a debt collector gets a new case, whether its a debt buyer who is buying junk debt or a collector who is collecting on behalf of the original creditor, the collector gets a CD with a ton of information, some of which is correct and some of which is incorrect. There is no supporting paperwork, however. There are no credit card statements, no receipts. There is nothing. So they cannot actually prove anything at the time they get the file.
How bad is it? I am filing a motion to set aside a default judgment on a case. The debt collector had the client “served” on an address that does not exist. Further, when they asked for the judgment, they included paperwork that showed the address of my client, an address my client has been at for over 20 yeras. But no one seemed to care or check to see if my client was properly served.
Of course, getting a judgment when they know they have not properly served a lawsuit is a violation of the FDCPA (Fair Debt Collection Practices Act) and California’s Rosenthal Act. Unfortunately, most debt collectors just consider this the cost of doing business since so few people fight them.
If you get a letter from a debt collector be it an attorney like Frederick J. Hanna or Erica Brachfeld, or a company like Equable Ascent Financial or Financial Recovery or Vital Recovery, you should immediately talk to an attorney. Make sure you know your rights. And if they file a lawsuit, don’t assume you owe the debt. Talk to a lawyer and see if you can fight it.