Many economic indicators suggest the economy is in a period of growth and improvement, but millions of Americans remain tied to heavy debt loads and an inability to pay for basic needs each month. Despite the federal government’s rules for the proper behavior of debt collectors when collecting debts, abuses regarding debt collection have remained rampant across the nation.
For the first time in several decades, the federal government has indicated it will attempt to strengthen rules that protect consumers from vicious debt collectors, particularly when those debt collectors hound consumers who don’t even owe the debts sought. The review process for these rules won’t happen overnight and may take quite a long time to come to fruition, but the move by federal regulators is a step in the right direction for the protection of consumers.
Clarifying the Process a Debt Collector Can Use to Collect
Outside of the constant harassment of debt collectors, one of the biggest problems consumers have experienced is obtaining full documentation of debts supposedly owed to a debt collector. For many years, debt collectors have sued consumers using nothing more than simply created spreadsheets with a few pieces of pertinent information like the alleged debtor’s name and the amount owed.
Under the new rules proposed by the Consumer Financial Protection Bureau, debt collectors would need to provide much better documentation to prove they were the legitimate owners of the debts. Although these clearer records would actually make it easier for a debt collector to prevail in court during a civil suit, it would also reduce the number of debt collectors harassing people for debts they don’t owe.
Reducing Harassment from Debt Collectors
One of the most stressful parts of falling into debt is the barrage of collection calls that start after you fall behind on several of your bills. As the hole gets deeper and deeper and you start thinking about bankruptcy, the collection calls can reach a fever pitch with several calls coming from each debt collector every single day.
Under the new rules, debt collectors wouldn’t be able to contact people more than six times in a single week. Multiple phone calls a day from the same creditor or debt collector would virtually disappear. Additionally, the death of a debtor would result in a 30-day wait before debt collectors could start calling the deceased’s relatives for payment on the debt.
Collection Complaints Reach All-Time Highs
The government currently receives more than 7,000 calls every single month about debt collection, which is more than any other type of consumer protection complaint. Many of the complaints are made because people are harassed for debts they don’t even owe. Even worse, many people find that they’ve been sued only after a judgment has been entered and have been sent a notice about a wage garnishment.
The debt collection industry has made it common practice to serve legal documents upon the people they sue using “sewer service,” which is the nickname given to the process where a debt collector serves a defendant a lawsuit without actually serving the alleged debtor in person. Although there are alternatives to in-person service (some states allow papers to be mailed), there are thousands of judgments on the books around the country where the defendant never even knew about the lawsuit in the first place.
According to an article published by the New York Times, debts are sometimes paid and sold multiple times.
“The nation’s courtrooms have been glutted with millions of collection lawsuits, many of which are backed by thin documentation. And tales of abuses – like robo-signed affidavits filed in bulk, or aggressive collection efforts on erroneous debts – are rife.”
A few states have adopted stricter rules regarding the documentation needed to prove debt ownership in court, but a national law on documentation would help reduce the number of frivolous lawsuits faced by Americans today. Debt collectors do have the right to sue in civil court for money owed, but doing so without proper documentation reduces the effectiveness of the judicial system.
Get Legal Help for Harassment from Debt Collectors
Are you fielding daily calls from debt collectors? Is your life full of stress because of debt collector harassment and collection activity? Would you like to know how the law team at Suburban Legal Group PC can help? Request a Free No Obligation Legal Evaluation today, and we’ll let you know your options and how to stop the harassment.
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