The state in which I practice does not allow jurisdiction based solely on where the contract was signed. As such, we limit our filings to the venues where we reasonably believe the consumer resides. The states typically define what is the proper court thereafter, whether its based on amount, location, etc. so even if there is a large judicial districts we do not have the choice to file elsewhere by local rules.
Debt collectors file a large number of default judgments because quite simply consumers do not take action, not because they are unaware of the issue. Usually at the time a lawsuit is filed, a debt collector has attempted to resolve the issue via telephone calls and/or letters. This doesn't even include the efforts the original creditor may have made. A lawsuit is never a first response. It is usually done after numerous and repeated failed efforts to work with a consumer to resolve an outstanding debt. A default judgment is just a further extension of that. Even after we file suit, we may attempt to reach the consumer to resolve the lawsuit prior to judgment being taken. I have seen numerous files where we have spoken to the consumer and told them they can file an answer, and they still don't. In my opinion, default judgments are largely the result of consumer's deliberate uninvolvement with the process, rather than a collector taking deceptive steps. I will state that many states have local rules that if there is no response to a summons and the consumer has defaulted, they do not need to be noticed on a motion for a default judgment. Therefore, the actual entry of the judgment may in fact come as a surprise, despite the summons stating if you don't answer a judgment may be taken. However, an attorney who follows the local rules is not acting deceptively. In order to curb this shock for the consumer who doesn't answer, it wouldn't be bad to require all motions for judgment be served upon the consumer, despite local rules which may require otherwise. I would point out, many default judgment motions are not noticed for motion hour. They may simply be submitted for a ruling without a court hearing. As to the inquiry as to what is required to support a default judgment, this varies court to court and judge to judge. The courts that I have seen require more documentation are largely looking for affidavits of debt, charge off statements and statement showing payments or charges, and the assignment (if the plaintiff is a debt buyer).
I would like to see requirements that the consumers are required to provide written notice of any new addresses for the creditor to reach them so in the event the account does go into default, the creditor has current information to attempt to contact the consumer. Many consumers move frequently, yet fail to update the creditors
First, there may be a requirement to notify the creditor of changes, but many consumers don't, and second a consumer has to complete an NCOA for the post office to have record of it. Many don't. If there is a requirement that a creditor is to provide notice of a sale of the debt, pending sale, or sending the account off to collection, there shouldn't be liability on the creditor if they lack the updated information to actually reach the consumer. I don't want to see any FDCPA strict liability requirement that this notice must be given, but because the consumer has moved and failed to update the creditor and notice is not received, the creditor or debt collector is then stuck defending a lawsuit. If the creditor does not receive notice of an updated address, don't have strict liability that any notice reach the consumer.
From a creditor's standpoint, I generally agree with this comment. I think a good validation notice could answer a lot of the consumer's question. I think the author of the above note had some very well reasoned thoughts. I wouldn't go so far as to add that an itemized statement must be provided, particularly if one might not be available (perhaps because of record retention rules or because one simply may not exist), but providing information as to the type of account, brand name of the original creditor issuing the account, the account number, the date of last pay, and the name of the party from whom the debt may have been purchased would help. Providing documentation at the get go seems rather unneccessary and costly, particularly if the wording of the letter allows the consumer to readily identify the account, and the disclosures allow the consumer to request documentation for validation.
Alternative one is the easiest to communicate and probably the easiest to understand. Accouting systems will vary from creditor to creditor and requirements beyond this would only become more cumbersome and costly for a creditor and more confusing for a consumer.
I would not have the breakdown be different for different types of credit extended. Computers and brains all across America will start smoking.
You are correct. There is quite a difference between send and receive. All I am suggesting is that a creditor only be required to send any notice to the last known address - not that the consumer receive it. If it is returned with a new address (and you presume too much if you think that all mail is returned if not delivered to the proper recipeint), then the creditor must send the notice to that new address. If the point of this dialogue is to ensure the consumer is protected, then require the consumer to protect themselves and provide this information to the creditor. If they don't then a creditor can't be hanged in a lawsuit for a letter failing to reach a consumer, when the creditor actions used the best information on hand.
Our office throws a wide net around "disputes". This is largely a hard one to define because it can take very specific and individual forms. Generally, however, the type of disputes we see center around when a debt buyer has purchased the debt and the consumer does not recognize the name of the debt buyer, they may generally state they don't owe the debt (with no further reasoning as to why not) or they don't owe as much as is being sought. Additionally, there may be claims of fraud or payment. Our office conservatively accepts verbal disputes as well as written. I think the greater issue is not what is considered a dispute, but how does a collector validate the debt? Many consumers ask for incredibly specific items. There is a poor form letter that floats around the internet that many consumers find and use, in which the consumer requests verification not validation, whatever the difference in that may be, then demands specific information be provided. I say this because then I believe many consumers feel each of those requested items must then be provided, when in fact the FDCPA is silent to the issue as to what proper verification is. I will leave that for another post, though my thought there will be defining what is verification will prove to be a difficult task as you can't be so defined that the various types of creditors cannot possibly provide the information sought or so loosely defined that there is load of litigation needed to define it.
Many disputes are difficult to investigate because it is unclear what the consumer's dispute actually is. If the consumer is specific enough so that there is a clear item to research, we will do so. However, its a vague dispute such as "I dispute this debt" or "I don't owe this debt" (which is incredibly common), then we will provide statements or a contract to attempt to address it. The amount of the investigation is largely lead by the amount of detail the consumer relays, and most of it results in us relying on the documentation the creditor provides to resolve the dispute. Sometimes we may need to ask the creditor to research their records for indication of X, Y, or Z, but most the time the dispute isn't that specific. I find in my practice that we will often ask a consumer to provide information to support their dispute (such as proof of payment), but then the consumer does not provide it, and we are stuck in our efforts to investigate further. Requiring only a "reasonable" investigation without further definition sounds like a punt to the courts to decide the defintion after a lot of litigation. I think at least a broad definition of obtaining documentation to support the position that consumer owes the debt/amount/and creditor is a good place to start. I would love to see consumers use a form letter prepared by the CFPB which spells out a variety of disputes and helps them articulate the dispute better.
I do think one of the toughest hurdles for a collector (and one of the biggest complaints from persons against whom collection efforts are made) is when they get a person that states the debt is not theirs (but someone else's ) with the same name. We do our homework on our end to investigate (we'll attempt to compare the last 4 digits of the social, we may run a skip trace to see if party we contacted lived at the address on the statements, etc) and we will provide verification, but in a mobile world investigating that the John Smith you contacted is the same John Smith you are attempting to resolve a debt with can prove tricky. This is especially tricky if there is NEVER indication that we have reached the wrong person. We never wish to contact the wrong party regarding a debt, but it unfortunately happens because consumers don't always relay updated contacted information to creditors and a collector then has to rely upon the best information available to them. Unfortunately, I don't know what the fix is here. Despite the stories to the contrary, it simply is not the intent of any professional and responsible collection agency or firm to attempt collections from a party that does not owe the debt, but this is a hard one to address without good communication from the wrongly contacted party and the collector.
MER
1
The state in which I practice does not allow jurisdiction based solely on where the contract was signed. As such, we limit our filings to the venues where we reasonably believe the consumer resides. The states typically define what is the proper court thereafter, whether its based on amount, location, etc. so even if there is a large judicial districts we do not have the choice to file elsewhere by local rules.
View this comment in the discussion thread
MER
2
Debt collectors file a large number of default judgments because quite simply consumers do not take action, not because they are unaware of the issue. Usually at the time a lawsuit is filed, a debt collector has attempted to resolve the issue via telephone calls and/or letters. This doesn't even include the efforts the original creditor may have made. A lawsuit is never a first response. It is usually done after numerous and repeated failed efforts to work with a consumer to resolve an outstanding debt. A default judgment is just a further extension of that. Even after we file suit, we may attempt to reach the consumer to resolve the lawsuit prior to judgment being taken. I have seen numerous files where we have spoken to the consumer and told them they can file an answer, and they still don't. In my opinion, default judgments are largely the result of consumer's deliberate uninvolvement with the process, rather than a collector taking deceptive steps. I will state that many states have local rules that if there is no response to a summons and the consumer has defaulted, they do not need to be noticed on a motion for a default judgment. Therefore, the actual entry of the judgment may in fact come as a surprise, despite the summons stating if you don't answer a judgment may be taken. However, an attorney who follows the local rules is not acting deceptively. In order to curb this shock for the consumer who doesn't answer, it wouldn't be bad to require all motions for judgment be served upon the consumer, despite local rules which may require otherwise. I would point out, many default judgment motions are not noticed for motion hour. They may simply be submitted for a ruling without a court hearing. As to the inquiry as to what is required to support a default judgment, this varies court to court and judge to judge. The courts that I have seen require more documentation are largely looking for affidavits of debt, charge off statements and statement showing payments or charges, and the assignment (if the plaintiff is a debt buyer).
View this comment in the discussion thread
MER
3
Many courts don't even have hearing times, and the attorney would not know necessarily what the consumer considers inconvenient.
View this comment in the discussion thread
MER
4
I would like to see requirements that the consumers are required to provide written notice of any new addresses for the creditor to reach them so in the event the account does go into default, the creditor has current information to attempt to contact the consumer. Many consumers move frequently, yet fail to update the creditors
View this comment in the discussion thread
MER
5
First, there may be a requirement to notify the creditor of changes, but many consumers don't, and second a consumer has to complete an NCOA for the post office to have record of it. Many don't. If there is a requirement that a creditor is to provide notice of a sale of the debt, pending sale, or sending the account off to collection, there shouldn't be liability on the creditor if they lack the updated information to actually reach the consumer. I don't want to see any FDCPA strict liability requirement that this notice must be given, but because the consumer has moved and failed to update the creditor and notice is not received, the creditor or debt collector is then stuck defending a lawsuit. If the creditor does not receive notice of an updated address, don't have strict liability that any notice reach the consumer.
View this comment in the discussion thread
MER
6From a creditor's standpoint, I generally agree with this comment. I think a good validation notice could answer a lot of the consumer's question. I think the author of the above note had some very well reasoned thoughts. I wouldn't go so far as to add that an itemized statement must be provided, particularly if one might not be available (perhaps because of record retention rules or because one simply may not exist), but providing information as to the type of account, brand name of the original creditor issuing the account, the account number, the date of last pay, and the name of the party from whom the debt may have been purchased would help. Providing documentation at the get go seems rather unneccessary and costly, particularly if the wording of the letter allows the consumer to readily identify the account, and the disclosures allow the consumer to request documentation for validation.
View this comment in the discussion thread
MER
7
Alternative one is the easiest to communicate and probably the easiest to understand. Accouting systems will vary from creditor to creditor and requirements beyond this would only become more cumbersome and costly for a creditor and more confusing for a consumer. I would not have the breakdown be different for different types of credit extended. Computers and brains all across America will start smoking.
View this comment in the discussion thread
MER
8
You are correct. There is quite a difference between send and receive. All I am suggesting is that a creditor only be required to send any notice to the last known address - not that the consumer receive it. If it is returned with a new address (and you presume too much if you think that all mail is returned if not delivered to the proper recipeint), then the creditor must send the notice to that new address. If the point of this dialogue is to ensure the consumer is protected, then require the consumer to protect themselves and provide this information to the creditor. If they don't then a creditor can't be hanged in a lawsuit for a letter failing to reach a consumer, when the creditor actions used the best information on hand.
View this comment in the discussion thread
MER
9
Our office throws a wide net around "disputes". This is largely a hard one to define because it can take very specific and individual forms. Generally, however, the type of disputes we see center around when a debt buyer has purchased the debt and the consumer does not recognize the name of the debt buyer, they may generally state they don't owe the debt (with no further reasoning as to why not) or they don't owe as much as is being sought. Additionally, there may be claims of fraud or payment. Our office conservatively accepts verbal disputes as well as written. I think the greater issue is not what is considered a dispute, but how does a collector validate the debt? Many consumers ask for incredibly specific items. There is a poor form letter that floats around the internet that many consumers find and use, in which the consumer requests verification not validation, whatever the difference in that may be, then demands specific information be provided. I say this because then I believe many consumers feel each of those requested items must then be provided, when in fact the FDCPA is silent to the issue as to what proper verification is. I will leave that for another post, though my thought there will be defining what is verification will prove to be a difficult task as you can't be so defined that the various types of creditors cannot possibly provide the information sought or so loosely defined that there is load of litigation needed to define it.
View this comment in the discussion thread
MER
10
Many disputes are difficult to investigate because it is unclear what the consumer's dispute actually is. If the consumer is specific enough so that there is a clear item to research, we will do so. However, its a vague dispute such as "I dispute this debt" or "I don't owe this debt" (which is incredibly common), then we will provide statements or a contract to attempt to address it. The amount of the investigation is largely lead by the amount of detail the consumer relays, and most of it results in us relying on the documentation the creditor provides to resolve the dispute. Sometimes we may need to ask the creditor to research their records for indication of X, Y, or Z, but most the time the dispute isn't that specific. I find in my practice that we will often ask a consumer to provide information to support their dispute (such as proof of payment), but then the consumer does not provide it, and we are stuck in our efforts to investigate further. Requiring only a "reasonable" investigation without further definition sounds like a punt to the courts to decide the defintion after a lot of litigation. I think at least a broad definition of obtaining documentation to support the position that consumer owes the debt/amount/and creditor is a good place to start. I would love to see consumers use a form letter prepared by the CFPB which spells out a variety of disputes and helps them articulate the dispute better. I do think one of the toughest hurdles for a collector (and one of the biggest complaints from persons against whom collection efforts are made) is when they get a person that states the debt is not theirs (but someone else's ) with the same name. We do our homework on our end to investigate (we'll attempt to compare the last 4 digits of the social, we may run a skip trace to see if party we contacted lived at the address on the statements, etc) and we will provide verification, but in a mobile world investigating that the John Smith you contacted is the same John Smith you are attempting to resolve a debt with can prove tricky. This is especially tricky if there is NEVER indication that we have reached the wrong person. We never wish to contact the wrong party regarding a debt, but it unfortunately happens because consumers don't always relay updated contacted information to creditors and a collector then has to rely upon the best information available to them. Unfortunately, I don't know what the fix is here. Despite the stories to the contrary, it simply is not the intent of any professional and responsible collection agency or firm to attempt collections from a party that does not owe the debt, but this is a hard one to address without good communication from the wrongly contacted party and the collector.
View this comment in the discussion thread