By the time a file reaches litigation, the debtor has already received at least one prior opportunity to resolve the debt with the collector (the initial demand letter, which by law must inform the debtor of his/her right to challenge the veracity of the debt being pursued). By making default judgment more difficult, the CFPB would only be rewarding the debtors who choose to take no action to resolve their complaints. Furthermore, the CFPB arguably has no authority to impose new, more burdensome requirements upon litigants in state court fora. Doing so would constitute an admission that state court rules of civil procedure deny due process in other types of proceedings that are not granted the "benefit" of Federal oversight.
It is unwise to require that the debt collector send sensitive personal information to the debtor (e.g., SSN, account number) as such a requirement would expose the debtor to the danger of ID theft.
For attorney debt collectors, being required to provide a list of all the rights the consumer may have comes perilously close to the provision of legal advice; even if it doesn't cross that line, the unsophisticated debtor may believe that an attorney is acting as a neutral court officer rather than as an advocate for an adverse party. I've had debtors ask me "Do I need to come to court for this?" after I've sued them.
There is now a class of "consumer representatives" which obtains from debtors a signed "Power of Attorney" and who then claim to be authorized to act as the consumer's attorney for purposes of debt resolution. They routinely seek to avoid the debt, most commonly by not answering their phones. My current practice is to advise the relevant state bar of the unauthorized practice of law by these jokers; perhaps a clarification statement that such persons must be licensed to practice law in the state in which the debt is being collected would cut down on the confusion.
In fact, it is a gross distortion of the law for the CFPB to claim that suit on a debt outside of the statute of limitations period is per se unfair, deceptive or misleading. Under the Federal Rules of Civil Procedure (and most state civil rules), the statute of limitations is an affirmative defense which must be pleaded by the defendant; if it is not, the defense is considered to have been waived. The purpose of the defense is to enable a party to avoid being disadvantaged by the long delay, loss of evidentiary documents, memory fading, etc.; if the debtor doesn't claim that they are disadvantaged by the delay, then the delay clearly isn't so long as to preclude a vigorous defense.
Statutes of limitations are state-dependent. What if the debt is out of statute in the debtor's original state of residence, but not in their new location?
RickJack
1
By the time a file reaches litigation, the debtor has already received at least one prior opportunity to resolve the debt with the collector (the initial demand letter, which by law must inform the debtor of his/her right to challenge the veracity of the debt being pursued). By making default judgment more difficult, the CFPB would only be rewarding the debtors who choose to take no action to resolve their complaints. Furthermore, the CFPB arguably has no authority to impose new, more burdensome requirements upon litigants in state court fora. Doing so would constitute an admission that state court rules of civil procedure deny due process in other types of proceedings that are not granted the "benefit" of Federal oversight.
View this comment in the discussion thread
RickJack
2
It is unwise to require that the debt collector send sensitive personal information to the debtor (e.g., SSN, account number) as such a requirement would expose the debtor to the danger of ID theft.
View this comment in the discussion thread
RickJack
3
For attorney debt collectors, being required to provide a list of all the rights the consumer may have comes perilously close to the provision of legal advice; even if it doesn't cross that line, the unsophisticated debtor may believe that an attorney is acting as a neutral court officer rather than as an advocate for an adverse party. I've had debtors ask me "Do I need to come to court for this?" after I've sued them.
View this comment in the discussion thread
RickJack
4
There is now a class of "consumer representatives" which obtains from debtors a signed "Power of Attorney" and who then claim to be authorized to act as the consumer's attorney for purposes of debt resolution. They routinely seek to avoid the debt, most commonly by not answering their phones. My current practice is to advise the relevant state bar of the unauthorized practice of law by these jokers; perhaps a clarification statement that such persons must be licensed to practice law in the state in which the debt is being collected would cut down on the confusion.
View this comment in the discussion thread
RickJack
5
In fact, it is a gross distortion of the law for the CFPB to claim that suit on a debt outside of the statute of limitations period is per se unfair, deceptive or misleading. Under the Federal Rules of Civil Procedure (and most state civil rules), the statute of limitations is an affirmative defense which must be pleaded by the defendant; if it is not, the defense is considered to have been waived. The purpose of the defense is to enable a party to avoid being disadvantaged by the long delay, loss of evidentiary documents, memory fading, etc.; if the debtor doesn't claim that they are disadvantaged by the delay, then the delay clearly isn't so long as to preclude a vigorous defense.
View this comment in the discussion thread
RickJack
6
Statutes of limitations are state-dependent. What if the debt is out of statute in the debtor's original state of residence, but not in their new location?
View this comment in the discussion thread