When alleged debtors are served with state court summonses, they are not always comprehensible to laypersons. I suggest that the CFPB encourage or mandate the use of a standard-form, plain English letter advising defendants in collection lawsuits of the following:
- Any requirements to file papers to avoid default judgment
- The date of any scheduled hearing and procedures for changing the date
- Local and online sources of information for pro se defendants, and possibly local non-profit advice organizations.
- That the debtor may wish to consider bankruptcy if they cannot pay their debts.
Consumer attorneys occasionally advise their clients not to record unlawful communications due to state laws requiring both parties' consent for recording. The CFPB should require that debt collectors subject to the FDCPA impliedly consent to recording by consumers.
When an attorney is a 'Debt Collector' (as per their own documents) and not legally considered a 'Collection Agency' the attorney is not held accountable for consumer protection law violations (both local and federal) within civil court.
This loop hole needs to be addressed.
The attorneys/debt collectors are not monitored by the state bar because it is a collection practice (the attorneys buy old debt and then collect upon that debt in civil court) and the state and federal civil courts are not monitoring the attorneys because it is an attorneys office and not considered a collection agency - even though the attorneys buy old debt then take alleged debtors to civil court.
I personally know of a very large attorney agency in Washington State that even gives classes thru the Washington state bar to other attorneys because it is a easy caseload to win.
There is currently dispute among federal district and circuit courts as to whether a post-default assignee of a debt comes within the creditor exception. The CFPB should issue a rule providing that a post-default assignee is a collector for FDCPA purposes.
I do NOT owe any debt but have a COMMON FIRST and LAST NAME. My Constitutional rights are violated every time a lawyer fails to perform due diligence, per rule 137, BEFORE SIGNING and FILING COURT PAPER against me. The clerks are helpless, the judges & attorney disciplinary do nothing favoring “lawyer zealousness.” I then have to spend time & money, going to court to prove I am NOT the person who owes the debt. I urge the CFPB to create mechanisms for clerks & citizens that make it 1) easier to fix these messes &, 2) to bring sanctions against lawyers & judges for MISUSE OF LEGAL PROCEDURE, ABUSE OF PROCESS, WRONGFUL CIVIL PROCEEDINGS, & MALICIOUS PROSECUTION.
Current validation guidelines do nothing to prevent wrong people from being dragged into court (common first and last name etc.). Debt validation ought to be a continual process, enacted: 1) any time the debt is sold, transferred, reassigned etc. 2) any time the creditor or its agents "lose track of" the debtor 3) any time new information is found and ASSUMED to be the debtors such as a new address, 4) any time a person presents legitimate ID to the clerk that proves they are not the right person (wrong middle initial, wrong birthdate, wrong race, wrong gender, etc.), 5) at each phase of the court process particularly after time lapse, transfer, reassignment 6) any time the debt records or court files concerning the debt records are destroyed (fire, flood etc.), 7) any time a clerk loses or accidently destroys all the court records, 8) any time a discrepancy is known or should have been known, 9) any time an ambiguity exists or (when viewed by a reasonable person would have been found to have existed) in the identity (i.e. common first and last name without middle initial etc.)
More information does not help when lawyers refuse to perform even the most basic due diligence as required before they affix their signature to, and, submit court paper (whichh are legal affidavits) to Clerks. As it stands now, most judges will not hear motions for sanctions under rule 137, and most lawyers will not file motions for sanctions against their colleagues. However, some mechanism has to created to give power back to those wrongly accused of owing debt, such that there are serious consequences for lawyers who recklessly abuse the court process and harm the personal and professional reputations of innocent citizens.
I work in healthcare and believe there should be standardization. I had to be readmitted for a medical problem, the result of a procedure gone bad and ended up with a hospital acquired condition. The result, a $110,000 hospital bill. After insurance, the physician agreed to write-off the balance. The hospital added insult to injury and pursued collections. Government payers do not reimburse for negligence nor is the beneficiary responsible.
Another issue. . . this has happened to me on a couple of occasions. In this instance, I had a MRI, received the insurance EOB and paid the balance. That should have been the end of it. Two plus years later I receive a notice for the balance, which should have been the contractual allowance. When I called the collection agency all they knew was that the MRI business had closed and turned my balance over to them as bad debt. They were able to see both the insurance and my payment. However, since they didn't have the insurance EOB, they suggested that I contact the insurance company and obtain a copy. Why is it the consumers responsibility to chase down information, it feels like I am doing their job. There should be standards for turning over collections to a agency. If the provider is going to send a bill to bad debt, they should have to supply a file the with all the information. In this case, the claim and itemization (1500 and/or UB) the insurance EOB and/or COB and all notes pertaining to the claim. Maybe having to provide all the required documentation would allow the provider review the claim to determine whether the balance is the patient's responsibility.
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.
Definitely abuse with this including calling other people when they have the alleged debtor's number to begin with. Not removing people from the do not call list when they ask to not call again. Answering machine messages that should have removal information before any message script is left by the collector. Currently it's this message is for ________, if you're not __________ please do not listen. Have a toll free number provided up front where the number is removed from calls without further questions.
Consumers should be able to review all encoding and information in e-OSCAR and there should be a comprehensive means to submit corrections and evidence to a dispute.
I agree with Bonzarel. The obvious solution is to ban debt collection calls to cell phones, period. Not everybody has the same options on their mobile plans, and some have strict time/call/texting limits and/or restrictions.
I would also add, any places/cities that have been in a state of emergency or any other emergency like an attack or otherwise dangerous/hostile environment like Newtown, Boston, etc. for an reasonable exemption time (like maybe 45 days).
Text messages, which are illegal and should remain illegal are cost effective for collectors but at the expense of the debtor/alleged debtor and therefore should not be used.
Why should the consumer pay a filing fee at all if the collector is at fault? That could be a hardship on many people. The collection agencies need to follow the rules of doing their validation correctly, and this would not be an issue.
As someone who has dealt for over two years with a rogue collections company putting a debt I don't owe on my credit report, I think these debt buyers should be disallowed by law. Legitimate third parties can operate, but these fly by night businesses who buy for pennies on the dollar without a care as to whether the books are correct should be fined and put out of business. In other words, the regulations should be so tough that they can't afford to stay open. They only wreak havoc on people. I have dealt with an unscrupulous company for two years; my state Attorney General was involved in getting it removed from my credit report with 1 agency, only to have this company report the same to another agency. No collection should be allowed on the credit report until verified 100%. And if the debt is more than 2 years old, the creditor must notify the supposed debtor in writing and allow 30 days for a response--denial, request for proof, payment, etc.--before putting it on the credit report.
The CFPB should absolutely adopt rules concerning substantiation of purported debts and, where a consumer timely disputes the existence or amount of a purported debt, alleged creditors and debt collectors should be prohibited from reporting any adverse information to CRAs about the debt and CRAs should be prohibited from including any adverse information on a consumer's credit report about the debt until after the debt collector or creditor obtains a final non-appealable judgment substantiating that the debt is in fact owed and the amount of the debt. Currently, debt collectors are attempting to collect upon purported debts and reporting negative information to CRAs based solely on assertions by creditors that a debt is owed. Further, the "verification" of a debt is usually nothing more than a piece of paper from the purported creditor stating the amount of the debt that the purported creditor asserts is owed. Even where the consumer has disputed the existence of the purported debt in light of, for example, legitimate legal defenses and counterclaims, the creditor or debt collector often times reports negative information to the CRAs thereby damaging the credit profile of the consumer. Although the FCRA requires that the CRA notate that the debt is disputed by the consumer, the damage to the consumer's credit standing is already complete as potential lenders and/or employers will see the negative information on the credit report and may take adverse action in connection with their lending or employment decisions based solely on the fact that negative information appears on the consumer's credit report. As a result, the threat of negative reporting by debt collectors to the CRAs can be highly coercive, unfair and deceptive in that a consumer may feel forced to pay a purported debt, even if the debt is legitimately and in good faith disputed, to avoid adverse information appearing on their credit report. I have recently personally encountered this exact situation after I became involved in a dispute with a property management company as to whether a lease termination fee was due under the terms of the lease for an apartment that I had vacated prior to the expiration of the lease. The property management company and I disagree as to whether the express terms of the lease require the payment of a lease termination fee. After I refused to pay the property management company for any lease termination fee, the property management company contacted a debt collector and asserted that I owed a debt notwithstanding that I have repeatedly disputed by notice to both the alleged creditor and the debt collector the existence of the debt under the express terms of the lease. The debt collector has proceeded to report negative information to the CRAs which has negative impacted my credit standing even though there exists a legitimate ongoing dispute as to whether the debt even exists in the first place. Further, the debt collector's "verification" of the debt was nothing more than an invoice from the property management company indicating the amount that the property management company asserts is owed. Under circumstances where a consumer timely disputes the existence of a debt or the amount of the debt, creditors and debt collectors should be prohibited from reporting adverse information to CRAs and CRAs should be prohibited from including adverse information on a consumer's credit report about the purported debt until the creditor or debt collector obtains a final non-appeable judgment so as to avoid the highly coercive, unfair and deceptive consequences to consumers. Further, a "verified" or "substantiated" debt should not be deemed to exist until a final non-appealable judgment is obtained under circumstances where the consumer timely disputes the existence or amount of debt. Such a rule would ensure that creditors and debt collectors only pursue litigation for debts they believe actually exist and avoids adverse impacts to consumers prior to the time the debt is verified and substantiated by a final non-appealable order of a court of competent jurisdiction.
josephusmyer
1When alleged debtors are served with state court summonses, they are not always comprehensible to laypersons. I suggest that the CFPB encourage or mandate the use of a standard-form, plain English letter advising defendants in collection lawsuits of the following: - Any requirements to file papers to avoid default judgment - The date of any scheduled hearing and procedures for changing the date - Local and online sources of information for pro se defendants, and possibly local non-profit advice organizations. - That the debtor may wish to consider bankruptcy if they cannot pay their debts.
View this comment in the discussion thread
josephusmyer
2
Consumer attorneys occasionally advise their clients not to record unlawful communications due to state laws requiring both parties' consent for recording. The CFPB should require that debt collectors subject to the FDCPA impliedly consent to recording by consumers.
View this comment in the discussion thread
JOULES
3When an attorney is a 'Debt Collector' (as per their own documents) and not legally considered a 'Collection Agency' the attorney is not held accountable for consumer protection law violations (both local and federal) within civil court. This loop hole needs to be addressed. The attorneys/debt collectors are not monitored by the state bar because it is a collection practice (the attorneys buy old debt and then collect upon that debt in civil court) and the state and federal civil courts are not monitoring the attorneys because it is an attorneys office and not considered a collection agency - even though the attorneys buy old debt then take alleged debtors to civil court. I personally know of a very large attorney agency in Washington State that even gives classes thru the Washington state bar to other attorneys because it is a easy caseload to win.
View this comment in the discussion thread
josephusmyer
4
There is currently dispute among federal district and circuit courts as to whether a post-default assignee of a debt comes within the creditor exception. The CFPB should issue a rule providing that a post-default assignee is a collector for FDCPA purposes.
View this comment in the discussion thread
From_ill_annoy
5
I do NOT owe any debt but have a COMMON FIRST and LAST NAME. My Constitutional rights are violated every time a lawyer fails to perform due diligence, per rule 137, BEFORE SIGNING and FILING COURT PAPER against me. The clerks are helpless, the judges & attorney disciplinary do nothing favoring “lawyer zealousness.” I then have to spend time & money, going to court to prove I am NOT the person who owes the debt. I urge the CFPB to create mechanisms for clerks & citizens that make it 1) easier to fix these messes &, 2) to bring sanctions against lawyers & judges for MISUSE OF LEGAL PROCEDURE, ABUSE OF PROCESS, WRONGFUL CIVIL PROCEEDINGS, & MALICIOUS PROSECUTION.
View this comment in the discussion thread
rb
6
Absolutely and it should be the kind of information this is admissible in a court of law.
View this comment in the discussion thread
From_ill_annoy
7
Current validation guidelines do nothing to prevent wrong people from being dragged into court (common first and last name etc.). Debt validation ought to be a continual process, enacted: 1) any time the debt is sold, transferred, reassigned etc. 2) any time the creditor or its agents "lose track of" the debtor 3) any time new information is found and ASSUMED to be the debtors such as a new address, 4) any time a person presents legitimate ID to the clerk that proves they are not the right person (wrong middle initial, wrong birthdate, wrong race, wrong gender, etc.), 5) at each phase of the court process particularly after time lapse, transfer, reassignment 6) any time the debt records or court files concerning the debt records are destroyed (fire, flood etc.), 7) any time a clerk loses or accidently destroys all the court records, 8) any time a discrepancy is known or should have been known, 9) any time an ambiguity exists or (when viewed by a reasonable person would have been found to have existed) in the identity (i.e. common first and last name without middle initial etc.)
View this comment in the discussion thread
From_ill_annoy
8
More information does not help when lawyers refuse to perform even the most basic due diligence as required before they affix their signature to, and, submit court paper (whichh are legal affidavits) to Clerks. As it stands now, most judges will not hear motions for sanctions under rule 137, and most lawyers will not file motions for sanctions against their colleagues. However, some mechanism has to created to give power back to those wrongly accused of owing debt, such that there are serious consequences for lawyers who recklessly abuse the court process and harm the personal and professional reputations of innocent citizens.
View this comment in the discussion thread
Deb27804
9I work in healthcare and believe there should be standardization. I had to be readmitted for a medical problem, the result of a procedure gone bad and ended up with a hospital acquired condition. The result, a $110,000 hospital bill. After insurance, the physician agreed to write-off the balance. The hospital added insult to injury and pursued collections. Government payers do not reimburse for negligence nor is the beneficiary responsible. Another issue. . . this has happened to me on a couple of occasions. In this instance, I had a MRI, received the insurance EOB and paid the balance. That should have been the end of it. Two plus years later I receive a notice for the balance, which should have been the contractual allowance. When I called the collection agency all they knew was that the MRI business had closed and turned my balance over to them as bad debt. They were able to see both the insurance and my payment. However, since they didn't have the insurance EOB, they suggested that I contact the insurance company and obtain a copy. Why is it the consumers responsibility to chase down information, it feels like I am doing their job. There should be standards for turning over collections to a agency. If the provider is going to send a bill to bad debt, they should have to supply a file the with all the information. In this case, the claim and itemization (1500 and/or UB) the insurance EOB and/or COB and all notes pertaining to the claim. Maybe having to provide all the required documentation would allow the provider review the claim to determine whether the balance is the patient's responsibility.
View this comment in the discussion thread
cmd07
10
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.
View this comment in the discussion thread
CG
11
Definitely abuse with this including calling other people when they have the alleged debtor's number to begin with. Not removing people from the do not call list when they ask to not call again. Answering machine messages that should have removal information before any message script is left by the collector. Currently it's this message is for ________, if you're not __________ please do not listen. Have a toll free number provided up front where the number is removed from calls without further questions.
View this comment in the discussion thread
puterbug
12
Consumers should be able to review all encoding and information in e-OSCAR and there should be a comprehensive means to submit corrections and evidence to a dispute.
View this comment in the discussion thread
lamizzee
13
I agree with Bonzarel. The obvious solution is to ban debt collection calls to cell phones, period. Not everybody has the same options on their mobile plans, and some have strict time/call/texting limits and/or restrictions.
View this comment in the discussion thread
stopwithspoofedcallerID
14
I would also add, any places/cities that have been in a state of emergency or any other emergency like an attack or otherwise dangerous/hostile environment like Newtown, Boston, etc. for an reasonable exemption time (like maybe 45 days).
View this comment in the discussion thread
stopwithspoofedcallerID
15
Text messages, which are illegal and should remain illegal are cost effective for collectors but at the expense of the debtor/alleged debtor and therefore should not be used.
View this comment in the discussion thread
gmt512
16
Why should the consumer pay a filing fee at all if the collector is at fault? That could be a hardship on many people. The collection agencies need to follow the rules of doing their validation correctly, and this would not be an issue.
View this comment in the discussion thread
buckeyeml
17
As someone who has dealt for over two years with a rogue collections company putting a debt I don't owe on my credit report, I think these debt buyers should be disallowed by law. Legitimate third parties can operate, but these fly by night businesses who buy for pennies on the dollar without a care as to whether the books are correct should be fined and put out of business. In other words, the regulations should be so tough that they can't afford to stay open. They only wreak havoc on people. I have dealt with an unscrupulous company for two years; my state Attorney General was involved in getting it removed from my credit report with 1 agency, only to have this company report the same to another agency. No collection should be allowed on the credit report until verified 100%. And if the debt is more than 2 years old, the creditor must notify the supposed debtor in writing and allow 30 days for a response--denial, request for proof, payment, etc.--before putting it on the credit report.
View this comment in the discussion thread
Anonymous
18
The CFPB should absolutely adopt rules concerning substantiation of purported debts and, where a consumer timely disputes the existence or amount of a purported debt, alleged creditors and debt collectors should be prohibited from reporting any adverse information to CRAs about the debt and CRAs should be prohibited from including any adverse information on a consumer's credit report about the debt until after the debt collector or creditor obtains a final non-appealable judgment substantiating that the debt is in fact owed and the amount of the debt. Currently, debt collectors are attempting to collect upon purported debts and reporting negative information to CRAs based solely on assertions by creditors that a debt is owed. Further, the "verification" of a debt is usually nothing more than a piece of paper from the purported creditor stating the amount of the debt that the purported creditor asserts is owed. Even where the consumer has disputed the existence of the purported debt in light of, for example, legitimate legal defenses and counterclaims, the creditor or debt collector often times reports negative information to the CRAs thereby damaging the credit profile of the consumer. Although the FCRA requires that the CRA notate that the debt is disputed by the consumer, the damage to the consumer's credit standing is already complete as potential lenders and/or employers will see the negative information on the credit report and may take adverse action in connection with their lending or employment decisions based solely on the fact that negative information appears on the consumer's credit report. As a result, the threat of negative reporting by debt collectors to the CRAs can be highly coercive, unfair and deceptive in that a consumer may feel forced to pay a purported debt, even if the debt is legitimately and in good faith disputed, to avoid adverse information appearing on their credit report. I have recently personally encountered this exact situation after I became involved in a dispute with a property management company as to whether a lease termination fee was due under the terms of the lease for an apartment that I had vacated prior to the expiration of the lease. The property management company and I disagree as to whether the express terms of the lease require the payment of a lease termination fee. After I refused to pay the property management company for any lease termination fee, the property management company contacted a debt collector and asserted that I owed a debt notwithstanding that I have repeatedly disputed by notice to both the alleged creditor and the debt collector the existence of the debt under the express terms of the lease. The debt collector has proceeded to report negative information to the CRAs which has negative impacted my credit standing even though there exists a legitimate ongoing dispute as to whether the debt even exists in the first place. Further, the debt collector's "verification" of the debt was nothing more than an invoice from the property management company indicating the amount that the property management company asserts is owed. Under circumstances where a consumer timely disputes the existence of a debt or the amount of the debt, creditors and debt collectors should be prohibited from reporting adverse information to CRAs and CRAs should be prohibited from including adverse information on a consumer's credit report about the purported debt until the creditor or debt collector obtains a final non-appeable judgment so as to avoid the highly coercive, unfair and deceptive consequences to consumers. Further, a "verified" or "substantiated" debt should not be deemed to exist until a final non-appealable judgment is obtained under circumstances where the consumer timely disputes the existence or amount of debt. Such a rule would ensure that creditors and debt collectors only pursue litigation for debts they believe actually exist and avoids adverse impacts to consumers prior to the time the debt is verified and substantiated by a final non-appealable order of a court of competent jurisdiction.
View this comment in the discussion thread