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Debt Machine: Debt Buyers Overhwelm Courts NCLC (2010)

Debt Machine: Debt Buyers Overhwelm Courts NCLC (2010)

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Published by Jillian Sheridan
The Debt Machine
How the collection industry Hounds Consumers and overwHelms Courts

NCLC®
July 2010

NATIONAL CONSUMER L AW C E N T E R

© Copyright 2010, National Consumer Law Center, Inc.
The Debt Machine
How the collection industry Hounds Consumers and overwHelms Courts

NCLC®
July 2010

NATIONAL CONSUMER L AW C E N T E R

© Copyright 2010, National Consumer Law Center, Inc.

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Categories:Types, Business/Law
Published by: Jillian Sheridan on Mar 11, 2012
Copyright:Attribution Non-commercial

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02/09/2014

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The DebT Machine
How tHe CoeCtion indstr HondsConsmers and overwHems Corts
July 2010
NCLC
NATIONALCONSUMER LACENTER 
®®
 
© Copyright 2010, National Consumer Law Center, Inc. All rights reserved.
 abot tHe atHors
Rick Jurgens
is an investigative reporter and advocate with the National Consumer LawCenter.
Robert J. Hobbs
is deputy director of the National Consumer Law Center.
 aCknowedgments
The views and opinions expressed in this paper are solely those of the National Consumer LawCenter (NCLC), which takes full responsibility for all that is written here.The authors thank Carolyn Carter and Willard Ogburn of NCLC for their editorial review andinput; Julie Gallagher for designing and formatting the report; and Tamar Malloy of NCLC forproofreading.
7 wintHrop sqare, boston, ma 02110
5
617-542-8010
5
www.nCC.org
 abot tHe nationa Consmer aw Center
The National Consumer Law Center
®
, a nonprot corporationfounded in 1969, assists consumers, advocates, and public policymakers nationwide on consumer law issues. NCLC works towardthe goal of consumer justice and fair treatment, particularly for thosewhose poverty renders them powerless to demand accountabilityfrom the economic marketplace. NCLC has provided model languageand testimony on numerous consumer law issues before federal andstate policy makers. NCLC publishes an 18-volume series of treatiseson consumer law, and a number of publications for consumers.
NCLC
NATIONALCONSUMER LACENTER 
®®
 
nationaConsmer aw Centerthdmch
5
1
While nancial crisis and recession havewreaked havoc on the American economy,the pain has been especially intense for con-sumers. Millions are now burdened withunpayable debts after they were enticed into borrowing during the credit boom.During that boom, loans became easy toget, difcult to understand and eventually—for many—impossible to repay. These con-sumers and debts are now fodder for a vastmachine that converts consumer misery intocorporate prots.This debt collection machine—nanced by Wall Street and closely tied to credit cardissuers and other lenders—includes collectionscompanies with an army of 400,000 deployedin call centers and other operations. It alsoincludes large law rms, speculators that buy and sell consumer obligations and otherspecialists.The debt machine sometimes generatesrevenue by persuading willing and able con-sumers to make payments. When that fails,it grinds on by securing legal judgments thatempower creditors to garnish wages, attach bank accounts, seize cars and other assets andextend the lives of uncollected debts, some-times for decades. Often, the grab extendsto people who have already repaid or neverowed the debts—parents, children, peoplewith similar names, victims of identity theft.Harassment, threats and even jail becometools of the collection trade.In pursuit of judgments, creditors andcollectors have swamped small claims andother state courts with a torrent of lawsuits.They le mass produced suits that do notclearly identify the debt involved. They oftensend notice of lawsuits to old or incorrectaddresses. And by inserting forced arbitrationclauses in millions of credit card and otherconsumer loan contracts, collectors andcreditors have carved out shortcuts to judg-ments, and denied many consumers a day ina real court.The operations of this well-funded andinsatiable debt machine long ago outstrippedexisting consumer protections. To protect con-sumers and the American economy, urgentlyneeded measures include:• strengthening and updating of thethree-decade-old Fair Debt CollectionPractices Act.• establishment of a Consumer FinancialProtection Bureau as well as updatedrules and enhanced enforcement by theFederal Trade Commission.• a restoration of fairness and due processto debt collection suits in state courts.• a permanent ban on forced arbitrationof disputes between creditors andconsumers.• enactment of laws that ensure that con-sumers can pursue class actions and in- junctions against abusive collectors.
exeCtive smmar 

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I have posted links to this report on twitter daily lately. I have also made sure to direct posts of it to Senators. What effect do you think this activity by Wall Street investors has on the economy as a whole. Please see my twitter post and my website on this topic @palsimon Consumer Law Institute shows Scum on Wall Street sucking blood out of economy via http://www.palsimonsintelligentsia.org
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