Debt Buyer Bills Backed by AG Swanson Introduced in Minnesota

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Twin bills were introduced Monday in Minnesota’s House and Senate that would place certain requirements on debt buyers that seek default judgments in debt collection lawsuits.

Minnesota Attorney General Lori Swanson praised the bills yesterday in giving them her endorsement, noting that debt buyers should have to “prove their case in court.”

The bills – HF 80 and SF 33 – are sponsored by the Chairs of each chamber’s Judiciary Committee.  The description of the bills, as written in the text, is “Relating to judgements; specifying certain requirements relating to assigned consumer debt default judgements.”

The proposals would require entities seeking default judgments on assigned consumer debt – defined in Minnesota as purchased debt – to provide certain documentation to the court before a judge can enter a default judgment.

Swanson noted Monday that debt buyers often can afford better legal representation than consumers in court proceedings and that consumers are not always notified of cases until after judgment is passed. Part of the new requirements involve proof of service to consumers.

“A debt buyer should have admissible evidence,” Swanson said. “In our American court system, to win in court, you should have to prove your case in court.”

Swanson has long battled debt buyers’ use of the court system in Minnesota, most recently wrapping up long-running regulatory action against Encore Capital Group.

The bills would require debt buyers to submit to the court, addition to the application for judgment,:

(1)    a copy of the written contract between the debtor and original creditor or, if there was no written contract, other admissible evidence establishing the terms of the contract between the debtor and the original creditor, including the moving party’s entitlement to the amounts described in clause (3);

(2)     admissible evidence establishing that the defendant owes the debt;

(3)    admissible evidence establishing that the amount claimed to be owed is accurate, including an itemization of the balance owed at the time the debt was first assigned to another party by the original creditor and a breakdown of post-assignment fees, interest, and interest rates;

(4)     documentation establishing a valid and complete chain of assignment of the debt from the original creditor to the moving party, including documentation or a bill of sale evidencing the assignment with proof that the particular debt at issue was included in the assignment referenced in the documentation or bill of sale;

(5)    proof that a summons and complaint were properly served on the debtor and that the debtor did not serve a timely answer; and

(6)    proof that the debtor was provided notice of the default judgment motion and hearing.

The bills were introduced and read in the House and Senate Monday and were placed in each chamber’s Judiciary Committee for further action.


Continuing the Discussion

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  • avatar John Nemo says:

    When it comes to the stereotype 99 percent of people in this country – including members of the media – have about the debt collection industry, the headline to the Minneapolis Star Tribune article (“Minnesota looks to toughen laws for Pugnacious bill collectors”) covering the legislation being introduced says it all.

    Debt Collection Agencies are “Pugnacious”, meaning: “combative, aggressive, antagonistic, belligerent, bellicose, warlike, quarrelsome, argumentative, contentious, disputatious, hostile, threatening, truculent; fiery, hot-tempered.”

    Rather than focus on the news of the article and/or lay blame for who’s at fault here, I’m going a different direction with my comment.

    Here’s the key line from a debt collection agency marketing and PR perspective: “A number of victims shared stories of being unfairly harassed by collectors.”

    This quote comes from the Star Tribune story, and I’m sure those stories were told during a packed press conference inside the Minnesota State Capitol, playing out to a horde of print and broadcast reporters.

    Do you see how story rules the roost when it comes to the way your collection agency is going to be portrayed in the media?

    And if your agency’s story is NOT in line with the narrative contained in this story, what are YOU willing to do about it?

    I guarantee you that if a collection agency owner came to a local TV station, armed with tapes of calls between collectors and consumers, he or she could quickly demonstrate that maybe it’s the consumers who are often ”combative, aggressive, antagonistic, belligerent, bellicose, warlike, quarrelsome, argumentative, contentious, disputatious, hostile, threatening, truculent; fiery, hot-tempered.”

    Yes, yes, I know – the tapes must be edited so they don’t violate privacy laws, FDCPA, HIPAA and all the other alphabet soup of regulations and laws that hogtie debt collection efforts. But the bottom line is, debt collection agencies need to find a way to tell their story, because I know for a fact that the well-worn, negative stereotype that the media neatly drapes over nearly every debt collection story is untrue.

    Which leads me to the crazy part of this comment: I think stories like this one are actually a GREAT branding, marketing and PR opportunity for your debt collection agency!

    Here’s why: If your agency is NOT the “pugnacious” bad apple portrayed in these types of media reports, tell somebody! Create a company video that highlights the thank you cards and flowers consumers send your collectors. Showcase your A+ Rating with the Better Business Bureau, or the BBB Integrity or Business Ethics Awards you’ve won over the past few years. Even better, humanize your collectors by putting them on camera and allowing clients, prospects, consumers and regulators to see the people behind your brand.

    Think about how that would make you stand out from the competition! We know clients and prospects want to work with “that” type of agency, and since you already do things the right way, shouldn’t more people know that? Why allow your agency to continue to get lumped in with all the bad actors?

    After all, it’s easy to continue perpetuating a negative, untrue stereotype when your debt collection agency is just some faceless company name or logo. It’s a lot harder for a reporter or editor to call you “pugnacious” when they are exposed to the real people behind your agency and see the goodness, professionalism and integrity you perform with!

  • avatar todd bean says:

    Oh I bet you guys are longing for the days of limited internet and no consumer message boards. You made your bed, now go lie in it.

    I can’t wait for the first motion to vacate a default being granted and the debt buyer being shown to have forged its own evidence. It will be Brent V Midland all over again.

  • avatar Debt Guy says:

    What an ironic thing to say, Todd. You made your bed, now go lie in it? Maybe if you started practicing what you preach you wouldn’t be so angry about how your life has turned out.

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