Current debt substantiation requirements all suffer from the same significant shortcoming in that they fail to address the often symbiotic relationship between first-line creditors, collectors, reporting agencies, consumer data clearinghouses, buyers of bad debt, and others industry players. Each has a vested profit motive in the "validation" of debt. Without appropriate disincentive--i.e., enforcement of rules and stiff penalties for non-compliance--corners are cut and quid pro quo-type behaviors begin to surface. Consumers hold few cards and have to play against a stacked deck. The validation process should involve more than merely inquiring with the creditor about the validity of the debt or the identity of the debtor, and failure to observe all the necessary steps--in the sunshine, no less--should have severe consequences. The best deterrent would be putting the power back in the hands of the (truly-wronged) consumer through the inclusion of "private attorney general" style enforcement mechanism. Awarding attorneys' fees and damages, with the ability to elect either actual or meaningful statutory damages (similar to the scheme introduced by Congress into the copyright statutes), would create serious disincentives for anyone involved in unscrupulous validation practices.
cmd07
1
Current debt substantiation requirements all suffer from the same significant shortcoming in that they fail to address the often symbiotic relationship between first-line creditors, collectors, reporting agencies, consumer data clearinghouses, buyers of bad debt, and others industry players. Each has a vested profit motive in the "validation" of debt. Without appropriate disincentive--i.e., enforcement of rules and stiff penalties for non-compliance--corners are cut and quid pro quo-type behaviors begin to surface. Consumers hold few cards and have to play against a stacked deck. The validation process should involve more than merely inquiring with the creditor about the validity of the debt or the identity of the debtor, and failure to observe all the necessary steps--in the sunshine, no less--should have severe consequences. The best deterrent would be putting the power back in the hands of the (truly-wronged) consumer through the inclusion of "private attorney general" style enforcement mechanism. Awarding attorneys' fees and damages, with the ability to elect either actual or meaningful statutory damages (similar to the scheme introduced by Congress into the copyright statutes), would create serious disincentives for anyone involved in unscrupulous validation practices.
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