“Dirty Debts Sold Dirt Cheap” Says Report on Sale of Accounts to Debt Collectors
In many contracts, sellers of debts disclaim all warranties about the underlying debts sold or the information transferred. Sellers also sometimes refuse to stand by “the accuracy or completeness of any information provided.”
That is, even though creditors are purportedly selling debts to debt collectors, the creditors are refusing to guarantee that any of the amounts are accurate or that the accounts are even owed at all.
Critical information is often missing from the accounts, such as the principal amount owed, the interest rate, and even the name of the original creditor. Yet, although these crucial pieces of information are missing, debt buyers often attempt to collect from consumers anyway.
Why do debt collectors and debt buyers have so little information? Because they usually win. Most consumers do not defend themselves when they receive notice of a collection lawsuit, the debt buyers are able to obtain a judgment without having to provide evidence.
When consumers challenge these debt buyers in court, however, the collection cases fall apart. Debt buyers “never received documents for the vast majority of the accounts they purchased,” according to the Federal Trade Commission.
The report concludes that the lack of documentary evidence creates a lack of legitimacy in the debt-collection industry. If debt buyers do not legally own the accounts upon which they sue, but they obtain court judgments anyway, then the system is broken.
The report is here: Dirty Debts Sold Dirt Cheap
[vc_separator type=’normal’ position=’left’ color=’393939′ border_style=” thickness=’1′ up=” down=”]
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.