Hi RBell,
While Demand Letters can be ineffective for the purpose of collecting a debt, "notice is the hallmark of fairness." It's more important that people are held to standards, which, in turn, help to eliminate abusive practices. Procedural safeguards, like demand letters, are an important standard regardless of their effectiveness.
This question is most interesting with respect to student loans. Unlike most other debts, student loans have the potential to be greater than $75k, which means a consumer can be sued in Federal Court under supplemental jurisdiction provisions. Additionally, should the current creditor be able to achieve complete diversity, the consumer can be sued in an entirely different state.
I think the cost of education needs to be reduced to a more reasonable amount or repayment plans need to be income based.
As far as consumer protection, legal aid needs to be made available, affordable and effective, and consumers need to take time to really know their rights and stop complaining about harassment because that's a completely different cause of action than restitution.
Some problems that debt collectors and buyers have with giving consumers this information arises in the field of Electronic Data Interchange. Here, not all debts, especially with interest are calculated the same way, and since there are fees, such as statutory attorneys fees, and court costs, which can be added to the balance, calculating the balance becomes cumbersome when the data is transferred among Trading Partners on a daily basis because the data gets lost in translation over day-to-day lags. Computers don't think the same way people do and what we think is a simple calculation is muddled when partial payments are added and the data is transmitted between parties.
StevenOren
1Hi RBell, While Demand Letters can be ineffective for the purpose of collecting a debt, "notice is the hallmark of fairness." It's more important that people are held to standards, which, in turn, help to eliminate abusive practices. Procedural safeguards, like demand letters, are an important standard regardless of their effectiveness.
View this comment in the discussion thread
StevenOren
2
This question is most interesting with respect to student loans. Unlike most other debts, student loans have the potential to be greater than $75k, which means a consumer can be sued in Federal Court under supplemental jurisdiction provisions. Additionally, should the current creditor be able to achieve complete diversity, the consumer can be sued in an entirely different state.
View this comment in the discussion thread
StevenOren
3
I think the cost of education needs to be reduced to a more reasonable amount or repayment plans need to be income based. As far as consumer protection, legal aid needs to be made available, affordable and effective, and consumers need to take time to really know their rights and stop complaining about harassment because that's a completely different cause of action than restitution.
View this comment in the discussion thread
StevenOren
4
Some problems that debt collectors and buyers have with giving consumers this information arises in the field of Electronic Data Interchange. Here, not all debts, especially with interest are calculated the same way, and since there are fees, such as statutory attorneys fees, and court costs, which can be added to the balance, calculating the balance becomes cumbersome when the data is transferred among Trading Partners on a daily basis because the data gets lost in translation over day-to-day lags. Computers don't think the same way people do and what we think is a simple calculation is muddled when partial payments are added and the data is transmitted between parties.
View this comment in the discussion thread