Debt Collection Practices Called Into Question

The New York Times reported on the recent influx of credit card cases as debt collectors have inundated the courts to collect what they attest to be their due. According to the article, "Debt-buyer businesses purchase debts — along with lists of names and amounts supposedly due — for pennies on the dollar from credit card companies and sometimes have no real evidence about whom they are suing or why. They then file tens of thousands of suits, often with little to back up their claims." The article gives a number of examples of debt collection companies abusing the system, bringing cases with little evidence and using "'false, misleading and deceptive means' to collect debts." The City Bar's Committee on Consumer Affairs and Committee on Civil Courts have issued a number of reports calling for reform to debt collection practices, including most recently on the Consumer Credit Fairness Act. This legislation would combat the abuses described by the Times by ensuring that "persons who are sued in consumer credit transactions receive the benefit of fair procedures, including, for example, that a debt collector or debt buyer must meet certain pleading requirements before being allowed to proceed."