• DYE CULIK PC | Consumer Protection Division

Common Problems with Junk Debt Buyer Assignments

We’ve previously commented on lawsuits by junk debt buyers, but today we want to look deeper into the types of documents debt buyers use to prove their cases. These documents are typically faulty or inadmissible under the Massachusetts Rules of Evidence.

There are typically three documents involved in the sale of a portfolio of consumer debt to a debt buyer. These are the forward-flow agreement, the bill of sale, and the schedule of accounts.


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The forward-flow agreement is a long document outlining the terms and conditions of the sale. The bill of sale is a one-page document that simply states that some accounts have been sold, without identifying the accounts or the terms of sale. And the schedule of accounts is a spreadsheet listing information about all the accounts, such as names, account numbers, and account balances. There are a few problems that occur in debt buyers’ collection lawsuits related to these documents.

First, the bill of sale is usually the only document produced. It does not identify any of the accounts. It also does not promise that any of the account balances are accurate or owing. Under Massachusetts law, though, the account being sold must specifically be identified.

Second, the entire spreadsheet of accounts is usually not produced. Some debt buyers argue that they have to keep this information private pursuant to the Graham–Leach–Bliley Act. This is untrue, because that act has an exception that allows this information to be provided in a lawsuit.

And third, the forward-flow agreement — which is rarely produced — usually contains numerous disclaimers stating that the accounts are sold “as is” and without any warranty of accuracy or completeness. That is, the information could be completely inaccurate.

Although there are numerous other problems with debt buyers’ documents in collection lawsuits, the problems outlined above stand out. Were most other businesses to come to court and ask for a judgment against someone without sufficient paperwork, no one would expect the court to do so. But in repeated cases, consumers are unable to, or decide not to, challenge debt buyers’ assignments.

Our office can provide representation in Massachusetts against debt collectors and debt buyers to help put their evidence to the test.

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Culik Law is a Massachusetts Law Firm. The posts on Culik Law’s blog are not intended as legal advice. If you have questions about your particular situation, CONTACT CULIK LAW for a Free Consultation.

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