Regulating Debt Buyers
Debts are bought and sold on a daily basis, leaving the buyer with relatively no clue if the debt they buy is valid or not. A debt can be bought and sold four to five times, often with little to no documentation besides the contact information of the addressee. Rules say that debt buyers can place judgments against the debtor that lead to wage garnishment and seizure of assets. These are problems that the average person cannot afford, nor recover from.
In an effort to crack down on these judgments based on flimsy evidence, several states, including Maryland, are requiring better proof that debt buyers are suing the correct consumers. They are now not allowed to sue without in-depth knowledge of the case, including whether or not the debt is even still valid. Debt buyers are supposed to sign affidavits swearing they have personal knowledge of a case, but employees are signing hundreds of these per day without even looking at the files. In fact, several debt buyers buy the debt without the supporting documents from the original creditors. How can they swear they have seen the files when they do not even buy it?
Default judgments are highly common, because many consumers do not know they are being sued. Many times, people are not aware of these judgments because flimsy attempts were made to contact them before the lawsuits went to court. The FTC wants to make it tougher on collection agencies before submitting a judgment to the courts, including making it more likely litigants will be able to defend themselves in court. Fairness to consumers is the new name of the regulation game, and in the future, debt collectors will have a harder time suing consumers over their debts. How might consumers view debts after becoming fully protected? Time will tell.
Contact a fair debt lawyer for a free case review.
