Marquis Jones has been sued by a debt collection company for a credit card that she does not believe she owes. The firm never proved she did own the debt.
But Jones was never given notice of the lawsuit. The collection company’s process server claimed her nonexistent “wife” accepted the summons. The county judge approved a $992 judgment against her last year.
This scene is typical in courtrooms throughout Maryland and across the country. Companies buy past-due consumer debts and sue to collect have won judgments against even though documentation to prove those cases is very thin.
“This is a $100 billion-dollar-a-year industry … the sale of ‘accounts receivable,’ ” said Peter A. Holland, who runs a University of Maryland law school clinic that specializes in debt cases. “It’s created a crisis in our small-claims courts. There’s tens of thousands of cases filed without proof just in Maryland. Nationwide, it’s in the tens of millions.”
Debt buyers typically purchase default accounts at a low price with little information about the debt and debtor. Then they swear in an affidavit that all the information is correct. Generally, they don’t pay to acquire the necessary documentation like signed credit card agreements or a list of purchases. What ends up happening is that mistakes are made such as suing twice for the same debt, suing on debts discharged through bankruptcy, debts already paid and debts incurred by people with similar names.
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Larry SmithConsumer Rights Attorney at SmithMarco, P.C.Larry P. Smith is a consumer attorney and the founder and Managing Partner at SmithMarco, P.C. He has tried dozens of consumer rights cases to verdict and has arbitrated over 700 cases. Additionally, he has amicably resolved over 3,000 consumer fraud, Fair Credit Reporting Act and Fair Debt Collection Practices Act cases via settlement. Mr. Smith has been a guest on multiple radio outlets including WLS and WGN in Chicago providing consumer advice. Mr. Smith also provides leadership and delivers lectures to the National Association of Consumer Advocates, The National Consumer Law Center, and the Chicago Bar Association. Latest posts by Larry Smith (see all)
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