Whether an original creditor is selling a debt, or contracting another party to collect on their behalf - they should have liability for the actions taken to collect that debt. I has an original creditor reach out in 2004 about a debt for a former roommate. I told the creditor the person moved and I lost touch with them. Several months later the company had a collection firm send collection letters in my name. That debt in my name was sold to two separate collection firms which I had to take to court to have my credit repaired. I heard nothing about the debt until 7 years later when $10K was seized from a bank account without warning or notice. It was that same debt that was already validated as not belonging to me. I had been ensnared unfairly into the court system and a judgement rendered for failure to appear as a result of court service notice going to an address I never resided at. The original creditor who knew they debt was not belonging to me received no penalties for their original clerical error that spiraled into a battle exceeding 9 years to resolve.
Verification is a joke, it just means that they look at there computer again and say yes you owe the debt. They don't offer any proof that you owe the debt or that you are the actual person that incurred the debt. I had my identity stolen and I didn't even know it. They could not produce a signed credit card receipt to compare my signature.
A separate "summary of rights" should be sent to, and made available, to consumers. We are woefully uninformed and misinformed about our rights as consumers; what avenues of negotiation we can pursue; or even who can assist us.
Furthermore, there should be some laws on the books on when collectors cannot collect e.g. if the original creditor has not made an attempt to collect the debt for an extended period of time, I should not get a collection notice 20 years after the fact.
The agency needs to be careful of new rules that will, though unintended, be harmful to the free market. However, it is important that litigation is monitored to ensure that the system does not allow reward with no risk. A plaintiff in a lawsuit cannot be placed in a situation where it is rewarding to sue with insufficient cause and minimal risk.
Creditors and those following in the process of recovery do not need additional regulation in this area since their efforts are monitored by the CFPB. The CFPB does not need to set standards for the industry, but make it clear that only those documents provided to the court in the original filing will be considered in a CFPB review. If in the course of a CFPB review, it is found that litigation was filed without a successful verification of the facts, the CFPB could award the amount sought by the filing to the defendant of the case and a fine to the CFPB of no less than $2,000 but no more than the amount sought.
This position would motivate the litigant to ensure their facts were correct before any filing took place. This position would allow CFPB to review cases filed no matter how they were adjudicated by the involved court. This review could be conducted at CFPB offices since it only requires the original filings. This review could be initiated simply based on a complaint to the agency's offices. The penalty could be adjustable based on a variety of agency standards.
I would have to take more time to consider when the plaintiff was not the original creditor or a member of the recovery industry, but, again, there must be a risk associated with the reward to stop nuisance suits.
grinwithin
1
Whether an original creditor is selling a debt, or contracting another party to collect on their behalf - they should have liability for the actions taken to collect that debt. I has an original creditor reach out in 2004 about a debt for a former roommate. I told the creditor the person moved and I lost touch with them. Several months later the company had a collection firm send collection letters in my name. That debt in my name was sold to two separate collection firms which I had to take to court to have my credit repaired. I heard nothing about the debt until 7 years later when $10K was seized from a bank account without warning or notice. It was that same debt that was already validated as not belonging to me. I had been ensnared unfairly into the court system and a judgement rendered for failure to appear as a result of court service notice going to an address I never resided at. The original creditor who knew they debt was not belonging to me received no penalties for their original clerical error that spiraled into a battle exceeding 9 years to resolve.
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drose977
2
Verification is a joke, it just means that they look at there computer again and say yes you owe the debt. They don't offer any proof that you owe the debt or that you are the actual person that incurred the debt. I had my identity stolen and I didn't even know it. They could not produce a signed credit card receipt to compare my signature.
View this comment in the discussion thread
Gevian
3
A separate "summary of rights" should be sent to, and made available, to consumers. We are woefully uninformed and misinformed about our rights as consumers; what avenues of negotiation we can pursue; or even who can assist us. Furthermore, there should be some laws on the books on when collectors cannot collect e.g. if the original creditor has not made an attempt to collect the debt for an extended period of time, I should not get a collection notice 20 years after the fact.
View this comment in the discussion thread
LarryS
4
The agency needs to be careful of new rules that will, though unintended, be harmful to the free market. However, it is important that litigation is monitored to ensure that the system does not allow reward with no risk. A plaintiff in a lawsuit cannot be placed in a situation where it is rewarding to sue with insufficient cause and minimal risk. Creditors and those following in the process of recovery do not need additional regulation in this area since their efforts are monitored by the CFPB. The CFPB does not need to set standards for the industry, but make it clear that only those documents provided to the court in the original filing will be considered in a CFPB review. If in the course of a CFPB review, it is found that litigation was filed without a successful verification of the facts, the CFPB could award the amount sought by the filing to the defendant of the case and a fine to the CFPB of no less than $2,000 but no more than the amount sought. This position would motivate the litigant to ensure their facts were correct before any filing took place. This position would allow CFPB to review cases filed no matter how they were adjudicated by the involved court. This review could be conducted at CFPB offices since it only requires the original filings. This review could be initiated simply based on a complaint to the agency's offices. The penalty could be adjustable based on a variety of agency standards. I would have to take more time to consider when the plaintiff was not the original creditor or a member of the recovery industry, but, again, there must be a risk associated with the reward to stop nuisance suits.
View this comment in the discussion thread