Protecting Consumers in Debt Collection Litigation and Arbitration

[WhatMoney]

Here's a pointer to the FTC's July 2010 report on consumer debt protection. It only resulted in recommendations, not laws which are up to our useless Congress. Still a good summary of the unfair debt collection practices still in effect today and recommendations on what the Congress and State legislatures "should" do.

http://ftc.gov/os/2010/07/debtcollectionreport.pdf


Repairing A Broken System

Protecting Consumers in Debt Collection Litigation and Arbitration

Contents

Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Chapter 1: Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Chapter 2: Litigation Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

I. The Legal Framework of Debt Collection Litigation . . . . . . . . . . . . . . . . . . . . 5
II. Consumer Participation in Debt Collection Litigation. . . . . . . . . . . . . . . . . . . 6
III. Evidence of Indebtedness in the Debt Collection Litigation Process . . . . . . . 14
IV. Statutes of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
V. Garnishment of Exempt Funds in Bank Accounts . . . . . . . . . . . . . . . . . . . . 31

Chapter 3: Arbitration Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

I. The Arbitration Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
II. Meaningful Consumer Choice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
III. Fair Arbitration Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Chapter 4: Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Appendix A: Debt Collection Roundtable Panelists . . . . . . . . . . . . . . . . . . . . A-1

Appendix B: FTC Contributors to Debt Collection Roundtables . . . . . . . . . . . . B-1

Appendix C: Agendas for Debt Collection Roundtables . . . . . . . . . . . . . . . . . C-1

Appendix D: Debt Collection Roundtables Public Comments . . . . . . . . . . . . . . D-1

Appendix E: Sample State Debt Collection Checklists . . . . . . . . . . . . . . . . . . E-1

[treehugger1]

I'm surprised at the non-response to this thread. I think that responding to collections or a lawsuit using these recommendations as a guide would appeal to folks. Chapter 2 V is an interesting read.

[ryan]

Its a longer report and I just d/l and skimmed it.

I do like their recommendations. I like the suggestion to change state laws so more defendants will attempt to defend the suit. Making fees more reasonable would help. I agree far too many are not receiving proper notice of the lawsuit in the first place. Arbitration is little understood by the typical defendant so there's work to be done there as well. I especially like the recommendation to limit what banks can freeze on judgment levy orders. This is an area of massive abuse from what I've seen.

I'll have to read more details later. Thanks for the report!

[GoingDown]

Its a longer report and I just d/l and skimmed it.

I do like their recommendations. I like the suggestion to change state laws so more defendants will attempt to defend the suit. Making fees more reasonable would help. I agree far too many are not receiving proper notice of the lawsuit in the first place. Arbitration is little understood by the typical defendant so there's work to be done there as well. I especially like the recommendation to limit what banks can freeze on judgment levy orders. This is an area of massive abuse from what I've seen.

I'll have to read more details later. Thanks for the report!

I agree. This has been abused so much by both judgment creditors and the banks. In essence, they wipe out the account balance responding to the judgment levy with all sorts of bank fees, attorney fees, etc.

And yet, most consumers don't realize that their checking accounts are not safe places to store their money when someone sues them.

Banks should be required to honor the exemption amount before taking out any fees for responding to the levy. In other words, if your state's exemption amount is $5000, and you keep your account balance below $5000, then no matter what fees the bank might want to charge, and what the creditor wants, your account is safe from them as long as you keep it below the exemption amount.

It would also help if there was national exemption amount of a reasonable amount for a person to live on -- $5000, instead of the absurdly small current exemption in my state of $150. You can't pay many bills with just $150 dollars in the bank.

So, I end up using money orders and the Wal-Mart Money Card for most things.

[tobee43]

i agree as well....this actually would be good to print out and really read carefully....however, the cost of ink to print 118 pages....LOL!! the report would most likely cost me about $50...too bad...some great information...

should be a sticky in collections....

[WhatMoney]

i agree as well....this actually would be good to print out and really read carefully....however, the cost of ink to print 118 pages....LOL!! the report would most likely cost me about $50...too bad...some great information...

should be a sticky in collections....

Hey, I'll print it out and send it to you for $25, you save $25! What a deal.

I buy recycled inkjet cartridges for my HP printer - if I print in black only and use the "Fast" ink setting a $15 black cartridge can easily print 500 pages of text. Staples has sales for a ream of quality inkjet paper for $1 per ream (500 sheets), so 118 sheets only cost me 24 cents. The entire report would cost $3.77 to print, or $1.89 if I used both sides. No wonder you are broke.

[chicagoannie]

Hey, I'll print it out and send it to you for $25, you save $25! What a deal.

I buy recycled inkjet cartridges for my HP printer - if I print in black only and use the "Fast" ink setting a $15 black cartridge can easily print 500 pages of text. Staples has sales for a ream of quality inkjet paper for $1 per ream (500 sheets), so 118 sheets only cost me 24 cents. The entire report would cost $3.77 to print, or $1.89 if I used both sides. No wonder you are broke.

hehe, nice - I like this! I am the Queen of Cheap...and when we actually HAVE printer ink, I am a fiend about only using fast draft. Woe to the offspring who prints "high quality" ! I will have to check out the $1 paper at Staples.

[tobee43]

Hey, I'll print it out and send it to you for $25, you save $25! What a deal.

I buy recycled inkjet cartridges for my HP printer - if I print in black only and use the "Fast" ink setting a $15 black cartridge can easily print 500 pages of text. Staples has sales for a ream of quality inkjet paper for $1 per ream (500 sheets), so 118 sheets only cost me 24 cents. The entire report would cost $3.77 to print, or $1.89 if I used both sides. No wonder you are broke.

now listen....HERE...your Christmas present from ME was a KIND word....LOL!!!! now i know you're cheap.....and my present would cost you under 4 bucks....right up your ally....

broke....nope...was just dying and had to spend over 200k to live....and pay medical expenses....we actually have a saving account....now that i'm half way to recovery....money mismanagement was and has never been an issue under OUR roof.

and so..........., it was a GREAT report, and factual and important for many to read....take it to your bank...turn it in and get me a more expensive gift for the holidays....

do NOT eat or drink to much and you'll be happy to know i'm leaving this morning so you don't have to see my\e type for the next few days!! (unless i sneak on the computer between cooking all the meals and being Santa).

best and blessed holidays even to you Whatmoney...because without you, i'd almost get bored!!

[tobee43]

hehe, nice - I like this! I am the Queen of Cheap...and when we actually HAVE printer ink, I am a fiend about only using fast draft. Woe to the offspring who prints "high quality" ! I will have to check out the $1 paper at Staples.

LOL!!! Whatmoney can turn a penny into gold...that's why he's so rich and kind....he also spins his gray hair into golden threads.....ROFL!!!!!

[WhatMoney]

now listen....HERE...your Christmas present from ME was a KIND word....LOL!!!! now i know you're cheap.....and my present would cost you under 4 bucks....right up your ally....

do NOT eat or drink too much and you'll be happy to know i'm leaving this morning so you don't have to see my\e type for the next few days!! (unless i sneak on the computer between cooking all the meals and being Santa).

best and blessed holidays even to you Whatmoney...because without you, i'd almost get bored!!

What present? Bah Humbug - I'll send you an empty inkjet cartridge, and you can fill it yourself. But I am spending the next two days baking Christmas cookies and making candy things with booze inside, which will be my Xmas gifts for my friends and family, so I won't be missing your posts.

Anyway, Merry F* Christmas and a Happy F* New Year to you, gabby!

[tobee43]

What present? Bah Humbug - I'll send you an empty inkjet cartridge, and you can fill it yourself. But I am spending the next two days baking Christmas cookies and making candy things with booze inside, which will be my Xmas gifts for my friends and family, so I won't be missing your posts.

Anyway, Merry F* Christmas and a Happy F* New Year to you, gabby!

ROFL!!!!!!!!!!....i really do like you and i can say it openly...your my kinda grouch!! now getta bakin and a cookin....and don't drink too much for the cheap booze inside!