14 ms·

There have been journalists & researchers who covered these debt collectors at court. When defendants showed up, organised, they usually won. The debt collecto

by netcan 6y ago

There have been journalists & researchers who covered these debt collectors at court. When defendants showed up, organised, they usually won. The debt collectors' lawyers didn't arrive prepared to win, because most people didn't show up. If you can win 85% of cases just by showing up, why bother. A court system that allows these dynamics to dominate isn't serving well.

JoeAltmaier 6y ago
And it only gets to court after harassment hasn't worked. Anecdata: guy I know had a common name. Debt collector fastened on him because he'd lived in the same town as a deadbeat with that name too. Guy would call day and night demanding payment.
- oh_sigh 6y ago
  At least in America, you can demand that all correspondence goes through certified mail, with big fines if they don't.
  - pmiller2 6y ago
    Not precisely "certified mail," but just "mail." They can choose to use certified mail if they want, but it's not required. You should always use certified mail to communicate with a debt collector, no matter if the debt is legitimate or not.
    - briffle 6y ago
      I have done that twice for family members, along with asking for proof of the debt, and that they are authorized to collect it. Both times, never, ever heard from the collector again.
      - milesvp 6y ago
        My understanding with debt collectors, is that they usually purchase a spreadsheet with very limited data, and there is almost never a paper trail for said debt. Which also means debt has a habit of showing up on multiple spreadsheets that keep getting resold. I think planet money did a podcast on this topic. Patio11 also wrote about talking to debt collectors with regards to identity theft. https://www.kalzumeus.com/2017/09/09/identity-theft-credit-reports/ https://www.kalzumeus.com/2017/09/09/identity-theft-credit-r...
        deleted 6y ago
        [deleted]
        rmilk 6y ago
        This seems to the the correct understanding. See these two articles that give the view from people who tracked down the debt collections and the bad data in those spreadsheets. Bloomberg: https://www.bloomberg.com/news/features/2017-12-06/millions-are-hounded-for-debt-they-don-t-owe-one-victim-fought-back-with-a-vengeance https://www.bloomberg.com/news/features/2017-12-06/millions-... NYT: https://www.nytimes.com/interactive/2014/08/15/magazine/bad-paper-debt-collector.html https://www.nytimes.com/interactive/2014/08/15/magazine/bad-...
- Spooky23 6y ago
  We were on the receiving end of that when the debtor in question registered our phone number when she signed up for a CVS card. It took awhile to figure it out, but every time we picked up something there, we would get increasingly crazy calls from debt collectors and insurance subrogation people. It got worse over time as the collection agencies sell bad debts at a discount, and the bottom feeders when the debt is close to aging out are awful.
- elliekelly 6y ago
  Is it necessary to call someone with debt a “deadbeat”? Often the people who are being hounded by debt collectors are victims of predatory lending and a system designed to punish them with fees for being poor.
  - dlhavema 6y ago
    The name/title doesn't always apply, true. But sometimes it really does. Most blanket statements have flaws in them...
LorenPechtel 6y ago
Or is this because those who don't show up know they have no defense? While I agree there is a problem you're not proving it here.
- bergstromm466 6y ago
  Yeah ok. I think you will keep scapegoating these other ‘evil’ ‘no-defence‘ people, until you yourself are on the receiving end of systemic inequity - or systemic failure - at some point and that’s when the penny will drop...
  - chrisseaton 6y ago
    It's pretty fundamental in our society that the court looks at the arguments presented before it. If the claimants make a reasonable case and you have nothing to say about it as the defendant then the court will act on that. The idea is that it stops people coming into the court prejudiced.
    - netcan 6y ago
      This isn't a case where a guy didn't pay his builder and then no-shows at court. These are debts sold at >10% of face, often smallish debts that have accrued massive interest. Some agencies specialise in persistent calling. Some specialise in deal-making. Some specialise in legal proceedings. These are the ones we are talking about. To work, they need to keep legal costs low. They often don't bother to have a case, because they're happy to win just the no shows. That's the formula. Buy 100 notes. Take them to court. 80 or so will no show. You can then try to seize the their assets. The whole thing is premised on the fact that these defendants don't open their mail. Either side making a case to a judge is rare. It's a misuse of the legal system, and the court shouldn't allow it.
      - chrisseaton 6y ago
        > It's a misuse of the legal system, and the court shouldn't allow it. I really don't see how. They file a case. They present an argument. The other side doesn't. What should the court do? Keep asking the other side to bother to show up? If they did that you could block any claim forever by just not showing up. That's not justice. Our whole society's legal basis is 'show up and present your case and have it judged'. It's called the 'adversarial system' - look it up. If it's a genuine debt, and it sounds like it is, then either pay up or argue your case in court.
verylittlemeat 6y ago
Why would a person who legitimately owes a debt win just by showing up? I had a small unsecured debt that was put into collections and then I was served an order of execution by the marshal to appear in court. I went to court and the judge made me sit down with the debt collectors lawyer and a mediator and we worked out a repayment plan at about 60% of the original balance. I really don't understand what "win" means in this context besides avoiding a default judgment.
- intopieces 6y ago
  > Why would a person who legitimately owes a debt win just by showing up? Debt collectors often don’t play by the rules, or don’t keep good records that are required to legally collect the debt. Even if they do, it’s not like the lawyers are likely to spend time tracking down the info for a single case to prove it. “Win” means the debt is found invalid due to one of these reasons.
  - verylittlemeat 6y ago
    As I mentioned I have been to court for a debt collection. Before you go to court the debt collector has to send you proof they served you papers for your debt. They have to send you proof of the chain of debt from the original creditor on down. For a $3,000 debt I was sent a packet of at least 80 pages with tabbed chapters and detailed photos confirming service before I had to go to court. I did not request this information, they were required by law to send it to me. These are not optional. These records are necessary to get a judgement. Debtors ARE at a disadvantage in the courts if they do not have the money for a lawyer to fight or they don't have the time to show up on their own. This is an injustice. But saying that debt collection is being illegally enforced in the courts I believe is just untrue. If you do not owe a debt and contest it in court you prevail. But if you do owe a debt and through neglect or ignorance you end up with a default judgment or negative consequences that is on you.
    - netcan 6y ago
      Exactly the point. To win, they need to cross all the Ts you mention. OTOH, they can also win if the defendant no-shows. At the bottom end of the debt collection pool, one strategy is to buy debt with a high chance of no-show and win cases that way... no need for meticulous and expensive lawyering. If people aren't answering their phones or opening any official looking mail... It's not the only strategy, but it is one. I think it's a mistake to look at these things too moralistically though. At an individual case level, maybe you're right. It is on you. What we're looking at here though is an industry. It is built on knowledge about how certain people behave under stress of debt and exploits it. It's also dirty all the way down. Mostly, by the time these go to court the debt has been resold multiple times at small fractions of face value. Crazy interest has been applied. Economically, it is really going for the last drop. Companies selling off bad debt... it's a pretty marginal income. On the other side, these collection agency debts basically eject a decent portion of the population from good standing in society. It's harmful, and it is happening in a court. Scale, circumstance... when it gets this big we need to look at it systemically.
pnw_hazor 6y ago
In little people law, such as, debt collection, landlord tenant, family law, some bankruptcy/creditor issues, it usually doesn't take much effort to disrupt the volume practitioners. The volume-based attorneys often exclusively practice in one area and rarely face an attorney. The few times I defended people, it really threw a monkey wrench into the process. Unfortunately, there is no money in being a white knight in most areas of little people law.
- wheelerwj 6y ago
  There has to be a way to apply some kind of scaling to this kind of defense..
  - dd36 6y ago
    Like classes of people...
    - pnw_hazor 6y ago
      Useful in some situations, but generally limited by consumer contracts and because people with damages arising out of different circumstances are hard to group into a class.
  - jjeaff 6y ago
    Hard to scale up a defense if you can't even get the debtors to do the bare minimum of showing up to court.
  - barry-cotter 6y ago
    Not if you must have a lawyer admitted to the State Bar with a three year JD to pay off. Paralegals can do 99% of the work and have a lawyer review it, sign off on it and be liable for documentation but everything but a lawyer or representing yourself in court is illegal in the US. No bicycles, motor bikes or Hondas. If you can’t afford a Mercedes you can walk.

by netcan 6y ago

JoeAltmaier 6y ago

And it only gets to court after harassment hasn't worked. Anecdata: guy I know had a common name. Debt collector fastened on him because he'd lived in the same town as a deadbeat with that name too. Guy would call day and night demanding payment.

oh_sigh 6y ago
At least in America, you can demand that all correspondence goes through certified mail, with big fines if they don't.
- pmiller2 6y ago
  Not precisely "certified mail," but just "mail." They can choose to use certified mail if they want, but it's not required. You should always use certified mail to communicate with a debt collector, no matter if the debt is legitimate or not.
  - briffle 6y ago
    I have done that twice for family members, along with asking for proof of the debt, and that they are authorized to collect it. Both times, never, ever heard from the collector again.
    - milesvp 6y ago
      My understanding with debt collectors, is that they usually purchase a spreadsheet with very limited data, and there is almost never a paper trail for said debt. Which also means debt has a habit of showing up on multiple spreadsheets that keep getting resold. I think planet money did a podcast on this topic. Patio11 also wrote about talking to debt collectors with regards to identity theft. https://www.kalzumeus.com/2017/09/09/identity-theft-credit-reports/ https://www.kalzumeus.com/2017/09/09/identity-theft-credit-r...
      - deleted 6y ago
        [deleted]
      - rmilk 6y ago
        This seems to the the correct understanding. See these two articles that give the view from people who tracked down the debt collections and the bad data in those spreadsheets. Bloomberg: https://www.bloomberg.com/news/features/2017-12-06/millions-are-hounded-for-debt-they-don-t-owe-one-victim-fought-back-with-a-vengeance https://www.bloomberg.com/news/features/2017-12-06/millions-... NYT: https://www.nytimes.com/interactive/2014/08/15/magazine/bad-paper-debt-collector.html https://www.nytimes.com/interactive/2014/08/15/magazine/bad-...
Spooky23 6y ago
We were on the receiving end of that when the debtor in question registered our phone number when she signed up for a CVS card. It took awhile to figure it out, but every time we picked up something there, we would get increasingly crazy calls from debt collectors and insurance subrogation people. It got worse over time as the collection agencies sell bad debts at a discount, and the bottom feeders when the debt is close to aging out are awful.
elliekelly 6y ago
Is it necessary to call someone with debt a “deadbeat”? Often the people who are being hounded by debt collectors are victims of predatory lending and a system designed to punish them with fees for being poor.
- dlhavema 6y ago
  The name/title doesn't always apply, true. But sometimes it really does. Most blanket statements have flaws in them...

LorenPechtel 6y ago

Or is this because those who don't show up know they have no defense? While I agree there is a problem you're not proving it here.

bergstromm466 6y ago
Yeah ok. I think you will keep scapegoating these other ‘evil’ ‘no-defence‘ people, until you yourself are on the receiving end of systemic inequity - or systemic failure - at some point and that’s when the penny will drop...
- chrisseaton 6y ago
  It's pretty fundamental in our society that the court looks at the arguments presented before it. If the claimants make a reasonable case and you have nothing to say about it as the defendant then the court will act on that. The idea is that it stops people coming into the court prejudiced.
  - netcan 6y ago
    This isn't a case where a guy didn't pay his builder and then no-shows at court. These are debts sold at >10% of face, often smallish debts that have accrued massive interest. Some agencies specialise in persistent calling. Some specialise in deal-making. Some specialise in legal proceedings. These are the ones we are talking about. To work, they need to keep legal costs low. They often don't bother to have a case, because they're happy to win just the no shows. That's the formula. Buy 100 notes. Take them to court. 80 or so will no show. You can then try to seize the their assets. The whole thing is premised on the fact that these defendants don't open their mail. Either side making a case to a judge is rare. It's a misuse of the legal system, and the court shouldn't allow it.
    - chrisseaton 6y ago
      > It's a misuse of the legal system, and the court shouldn't allow it. I really don't see how. They file a case. They present an argument. The other side doesn't. What should the court do? Keep asking the other side to bother to show up? If they did that you could block any claim forever by just not showing up. That's not justice. Our whole society's legal basis is 'show up and present your case and have it judged'. It's called the 'adversarial system' - look it up. If it's a genuine debt, and it sounds like it is, then either pay up or argue your case in court.

verylittlemeat 6y ago

Why would a person who legitimately owes a debt win just by showing up? I had a small unsecured debt that was put into collections and then I was served an order of execution by the marshal to appear in court. I went to court and the judge made me sit down with the debt collectors lawyer and a mediator and we worked out a repayment plan at about 60% of the original balance. I really don't understand what "win" means in this context besides avoiding a default judgment.

intopieces 6y ago
> Why would a person who legitimately owes a debt win just by showing up? Debt collectors often don’t play by the rules, or don’t keep good records that are required to legally collect the debt. Even if they do, it’s not like the lawyers are likely to spend time tracking down the info for a single case to prove it. “Win” means the debt is found invalid due to one of these reasons.
- verylittlemeat 6y ago
  As I mentioned I have been to court for a debt collection. Before you go to court the debt collector has to send you proof they served you papers for your debt. They have to send you proof of the chain of debt from the original creditor on down. For a $3,000 debt I was sent a packet of at least 80 pages with tabbed chapters and detailed photos confirming service before I had to go to court. I did not request this information, they were required by law to send it to me. These are not optional. These records are necessary to get a judgement. Debtors ARE at a disadvantage in the courts if they do not have the money for a lawyer to fight or they don't have the time to show up on their own. This is an injustice. But saying that debt collection is being illegally enforced in the courts I believe is just untrue. If you do not owe a debt and contest it in court you prevail. But if you do owe a debt and through neglect or ignorance you end up with a default judgment or negative consequences that is on you.
  - netcan 6y ago
    Exactly the point. To win, they need to cross all the Ts you mention. OTOH, they can also win if the defendant no-shows. At the bottom end of the debt collection pool, one strategy is to buy debt with a high chance of no-show and win cases that way... no need for meticulous and expensive lawyering. If people aren't answering their phones or opening any official looking mail... It's not the only strategy, but it is one. I think it's a mistake to look at these things too moralistically though. At an individual case level, maybe you're right. It is on you. What we're looking at here though is an industry. It is built on knowledge about how certain people behave under stress of debt and exploits it. It's also dirty all the way down. Mostly, by the time these go to court the debt has been resold multiple times at small fractions of face value. Crazy interest has been applied. Economically, it is really going for the last drop. Companies selling off bad debt... it's a pretty marginal income. On the other side, these collection agency debts basically eject a decent portion of the population from good standing in society. It's harmful, and it is happening in a court. Scale, circumstance... when it gets this big we need to look at it systemically.

pnw_hazor 6y ago

In little people law, such as, debt collection, landlord tenant, family law, some bankruptcy/creditor issues, it usually doesn't take much effort to disrupt the volume practitioners. The volume-based attorneys often exclusively practice in one area and rarely face an attorney. The few times I defended people, it really threw a monkey wrench into the process. Unfortunately, there is no money in being a white knight in most areas of little people law.

wheelerwj 6y ago
There has to be a way to apply some kind of scaling to this kind of defense..
- dd36 6y ago
  Like classes of people...
  - pnw_hazor 6y ago
    Useful in some situations, but generally limited by consumer contracts and because people with damages arising out of different circumstances are hard to group into a class.
- jjeaff 6y ago
  Hard to scale up a defense if you can't even get the debtors to do the bare minimum of showing up to court.
- barry-cotter 6y ago
  Not if you must have a lawyer admitted to the State Bar with a three year JD to pay off. Paralegals can do 99% of the work and have a lawyer review it, sign off on it and be liable for documentation but everything but a lawyer or representing yourself in court is illegal in the US. No bicycles, motor bikes or Hondas. If you can’t afford a Mercedes you can walk.