The Unknown World of Junk Debt Buying

This past weekend I attended a workshop in Seattle that was set up for consumer protection lawyers like myself who help people fight back against junk debt buyers like Midland Funding, Cavalry SPV, CACH, LLC (too name a few).  The presenter was Peter Holland, a consumer protection attorney in Maryland.

In his opening remarks his description of the debt buying world rang true – it is a world that impacts hundreds of thousands of families each year but has relatively few players – a few dozen debt collection law firms, a relatively small number of judges, and an extremely small number of consumer protection attorneys.  Not only that, but most know very little about this segment of the law even though junk debt buyer collection cases clog courts in every states.

This billion dollar industry creates total chaos in countless lives yet if you were to take a poll of random attorneys it is likely that very few would have any understanding of how the junk debt buying system really works.  I would venture to bet you could take a poll of consumer protection attorneys and many of them would not even be aware to what extent consumers are being abused and the rule of law set aside in the name of efficiency and “justice”.

And the junk debt buyers like it this way.  The less light that is shined on their industry the better it will be for them.

At the conference an audio recording from a recent court session in Washington state was played where a judge was explaining to a group of defendants who had been sued by a junk debt buyer how the creditors’ attorneys were there to “assist the court” in getting the debt collection cases resolved and then actively encouraged each of them to meet with the debt buyer’s attorney and sign off on a judgment.  The judge went so far as to tell the small crowd that signing off on the judgment wouldn’t harm there credit so long as they made payments on the judgment (absolutely not true!).

There was no presentation of evidence. No trial.  Just a judge telling consumers to go ahead and sign off on the judgment.

It is beyond concerning how defendants in credit card collection cases are treated by the debt buying industry as well as many courts. Safe guards that are put in place in the form of Rules of Evidence and Rules of Procedure are often completely disregarded by the court because “well, they owe someone, right?”.

Obtaining a judgment in court should mean that a creditor has come into court, proven their case with admissible evidence, and demonstrated what is owed and how it was calculated. If a debt buyer can’t do that they shouldn’t be awarded a judgment with all of the power that it provides.

The reason that junk debt buyers get away with rail-roading their cases through the courts is because not enough consumers push back.  It is time for people who are the targets of the junk debt buying system fight back against the abuses and hold junk debt buyers accountable for their shoddy, and often illegal, debt collection practices.