Jeb Bladine: Don’t get caught in debt collection wringer
I’m picking up on today’s commentary — this page — by ACLU Human Rights Researcher Jennifer Turner. You might want to read that article first, then return here.
Turner broadly digests a 98-page report on the often appalling world of debt collection nationwide. The ACLU report, titled “A Pound of Flesh: The Criminalization of Private Debt,” delves into a legal world populated by 6,000-plus debt collection firms. Find the full report at www.aclu.org.
Readers of our weekly Court Records know local debtor lawsuit numbers have skyrocketed in recent years.
To prove the point, I counted about 350 consumer debt cases reported this year from Yamhill County Circuit Court. The vast majority of those cases — about 280 — were initiated by four debt collectors.
Midland Funding, a major nationwide buyer of unpaid debt, leads with 94 local cases in four months. Closely behind at 88 cases is Capital One Bank USA, a mass-marketer of credit cards that leads the industry in lawsuits against borrowers. The list includes 62 cases from LVNV Funding and 34 from Cavalry SPV1.
The system itself spawns abuses. District attorneys’ offices nationwide enter into contracts with private companies to handle bounced checks, often with insufficient oversight. Buyers of past-due debt profiteer from boilerplate lawsuits that can subject debtors to costs far exceeding the original liability.
At the same time, the sprawling web of debt companies developed because so many people blindly borrow money via credit cards and retail accounts, then ignore collection efforts. And there is a great deal of outright credit card fraud.
I actually carry a Capital One credit card, and the service has been exemplary. But I use it carefully, and make sure a monthly auto-payment clears the balance.
Debt Lesson No. 1, don’t ever ignore a court filling for collection, even if it’s a bogus case. Show up; ask for proof of ownership of the debt instrument; make your case if you have one; and if you lose, determine how to pay the debt to avoid getting engulfed in a nightmare of legal but onerous collection tactics.
The ACLU report recommends prohibition of arrest warrants in debt collection proceedings, including those for contempt of court for failure to appear. It urges district attorneys’ offices to end contracts with debt collection agencies; admonishes attorney generals to take action against the abuses of such contracts; and calls for stronger federal enforcement of the Fair Debt Collection Practices Act.
Meanwhile, consumers, forewarned is forearmed.
Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.
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