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Ban Sales of Junk Debt, Says Law Professor


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As explained in Dirty Debts Sold Dirt Cheap, creditors often sell debts to debt buyers for pennies on the dollar, and without any documentation of their right to enforce the debts. Despite this lack of evidence, thousands of debt-collection lawsuits are filed daily against consumers, most of which result in default judgments, without a judge or jury hearing evidence.

Professor Holland observes:

Currently, we are living under a system where banks are knowingly selling inaccurate, unreliable junk accounts which are then used to extract money from consumers, some of whom do not owe any amount at all, and many of whom owe considerably less than the “approximate” amount being sued on.  We need to move from a business model where it is perfectly acceptable to sell false, incomplete and unreliable accounts, to a model where the only accounts which may legally be sold are those accounts which are true, complete and accurate.

The only way to stop these practices, he says, is to invert the current model: mandate that banks sell only legitimate accounts, and institute an outright ban on the sale of the bogus, “dirty” accounts.

Professor Holland’s opinion piece is here: A Proposal to Ban the Sale of Junk Debt

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