The Credit Card Lawsuit Is No Longer a Sure Win for Collection Attorneys

The Credit Card Lawsuit Is No Longer a Sure Win for Collection Attorneys

Court decisions and legal events around the country pertaining to debt collection by junk debt buyers and their collection attorneys are pointing to increased protection for consumers, whether they owe the debt or not.

According to an Allentown, Penn. newspaper, A Pennsylvania appeals court has thrown out a debt collector's credit card lawsuit against a woman who allegedly owed more than $5,000 on a credit card account because the collector couldn't vouch for the accuracy of the electronic records it presented as evidence.

The court said since everything is computerized these days, the collection attorney handling the credit card lawsuit needed to produce testimony about how the records in question were created and stored.

A local law professor said the decision gives courts guidance and authority to throw out debt collection lawsuits if the evidence doesn't pass muster. It also makes the strategy used by some debt buyers less likely to succeed, said Victoria Coyle, executive director of North Penn Legal Services in Bethlehem, Penn. Junk debt buyers hope consumers being sued will take no action to defend themselves against a credit card lawsuit, giving the debt collector a court victory. However, when those who owe fight back, the debt collectors are often unprepared to prove their case and walk away, Coyle said.

According to the Wall Street Journal, Encore Capital Group Inc. said it agreed to settle all pending class-action lawsuits accusing the nation's largest buyer of distressed consumer debt of using flawed or even phony affidavits to collect money with credit card debt summons.

"In the most prominent case, an Ohio federal judge ruled in 2009 that Encore violated federal and state laws by trying to collect credit-card debt using a fake affidavit. Some regulators and judges have complained that documents submitted to courts by debt collectors as proof of what a borrower owes frequently are sloppy or fraudulent. The accounts bought by debt-collection firms often lack information about the underlying debts, such as contracts or payment histories, according to judges who rule on collection cases," reported the Wall Street Journal.

According to the Baltimore Sun, Midland Funding LLC, a subsidiary of Encore Capital Group, dropped more than 10,000 debt-collection cases against Maryland consumers under a class action settlement approved Wednesday in Baltimore federal court.

The New York Attorney General's Office has prosecuted a number of debt collection firms for using illegal scare tactics. And just last year, a process server company was found guilty of failing to serve court papers to people targeted by debt lawsuits, resulting in unfair default judgments against them.

Consumers who cannot pay their credit card debt and receive a summons for that debt can educate themselves about how to answer that summons in a book like the Credit Card Debt Survival Guide. Then they can take advantage of the system debt collection attorneys use to make money by not following through with, or providing poor documentation on any cases that need more work than a summons.

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