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Debt Buyers Abusing the Legal System

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Recently, a new report was published regarding debt deception and how debt buyers abuse the legal system.  Although the report was based on a study in New York, my experience as a consumer protection lawyer in Central Florida reveals the same kind of debt collection abuse takes place here in the Orlando – Daytona – Melbourne metropolitan area.

Debt buyers are companies who buy debt from other companies who were unable, unwilling or prohibited from collecting those debts from consumers.  For example, a credit card company may decide that it is unlikely to collect a debt from a consumer, and simply sell that debt to another company who specializes in debt collection.  Usually, such debt is sold for pennies on the dollar.  That way, a debt buyer who is successful in collecting on that debt stands to make a huge profit.

The study revealed that 94% of debt buyers prevailed in court, usually through default judgment.  A default judgment is when the plaintiff (in this case, the debt buyer) wins the lawsuit simply because the defendant did not show up in court or did not file the proper paperwork.  The study noted that 90% of the consumers did not answer the summons and complaint, and only 1% were represented by an attorney.  As you might expect, virtually all people who had default judgments entered against them lived in low- or moderate-income neighborhoods.

Debt collectors obtain billions of dollars in judgments, sometimes using questionable or even illegal tactics.  Some of these tactics include:

  • Filing lawsuits on claims that are legally barred, such as filing them after the statute of limitations has run
  • Filing lawsuits on claims for which they lack proof of the debt
  • Failing to ensure defendants receive proper notice of the lawsuit
  • Failing to provide notice of their right to dispute the debt under the federal Fair Debt Collection Practices Act
  • Using intimidation to pressure consumers to give up their legal defenses

This is consistent with my experience in Florida’s small claims courts in Central Florida.  This past week, I was in court on one of my cases in Volusia County.  My client was the only one who had a lawyer assisting her, out of 14 cases scheduled for that morning.  In other cases, I have personally observed consumers manipulated by stand-in lawyers who the consumers apparently believed to be impartial mediators.

Don’t allow yourself to be intimidated by debt collectors using illegal or questionable tactics.  If you have been sued by a debt collector, contact a consumer lawyer before you are deprived of your rights.  If you are in Central Florida (Orange County, Seminole County, Volusia County, Brevard County, Flagler County, Lake County, and surrounding area) and need an attorney to defend you in a debt collection lawsuit, please feel free to call us for a free consultation.  Or, just click here to send us an email and we will be happy to call you to discuss your case with you.  Remember, once a debt collector receives a judgment against you, they may be able to freeze your bank accounts, seize your assets (including cars), and garnish your wages.  A judgment will make it more difficult for you to obtain credit, secure housing or even find a job.   Don’t let this happen to you!