FTC Collection Litigation Roundtable Sees Lively Debate on Legal Issues
The first in a series of open discussions on legal practices employed by the ARM industry was held in Chicago this week. The FTC is hoping to clarify how collectors and creditors use the legal system.
The Federal Trade Commission this week convened a roundtable on collection practices that sought to identify best practices for litigation and arbitration as well as better ways to handle lawsuit notification, judgments and garnishments.
The roundtable, held at Northwestern University in Chicago, follows up on the FTC’s February 2009 report Collecting Consumer Debts: The Challenges of Change – A Workshop Report, which recommended that the debt collection regulatory system in the U.S. should be reformed and modernized (“FTC Proposes Significant Changes to FDCPA in Workshop Report,” Feb. 27). The report also announced regional roundtables to further discuss issues surrounding litigation and arbitration practices in the accounts receivable management process, this week’s event in Chicago being the first.
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The next roundtable will be held Sept. 29 and 30 in northern California. The exact location has yet to be determined. Written comments pertaining to the Chicago roundtable may be submitted to the FTC until Sept. 1, an extension from the original Aug. 1 deadline.
More than a dozen panelists packed a stage and engaged in a sometimes-lively conversation about legal processes used in debt collection. The discussion was broken up into distinct topical segments:
Initiating Suits: Default Judgments and Service of Process
Default judgments are issued in as many as 90 percent of cases that go to court, several panelists said. According to consumer advocates, one of the drivers behind so many default judgments is the failure to properly notify debtors of suits filed against them by creditors and collectors.
Part of the problem is that the rules are “based on fiction” of the U.S. Postal Service delivering a collection judgment notice to a debtor, or, returning the notice if the address is bad, said Dave Philipps, consumer attorney and partner with Philipps & Philipps in suburban Chicago
“The Boston Globe recently sent out 100 letters to known wrong address. Only 50 were returned,” Philipps said.
Though collection firms in several states use process servers to deliver these notices, several participants said that many process servers lie about whether notices were actually served.
“There should be some audit of service,” said Thomas More Donnelly, associate judge in the first municipal district of the Circuit Court of Cook County.
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Comments
Comment from Uncl Lar on August 7, 2009 at 11:00AM EST
It is interesting to note the conference was held in Cook County, IL. A county where it's mandated by the courts that first attempt at service of process be handled by the Cook County Sheriff's department. Without being overly harsh, it's my experience the Sheriff's department could not serve their grandmother if she were sitting at the dinner table!
There are certain restrictions placed upon process by local courts that could be eliminated.This would speed up and make more reliable process serving.
It has also been my experience that professional private process servers are extremely efficient at finding, serving, and reporting promptly. They are motived for the most part.
Comment from DONALD DALY on August 7, 2009 at 11:02AM EST
90% of default judgments are the direct result of the consumer! If the creditor was mailing checks instead of summons my guess is that a great majority would be cashed. The USPO is as good as it gets when it comes to delivering mail, why is it only the default consumer has a problem? I hope this panel of experts can properly balance the credit/collection industries attempt to properly notify a consumer with the attempts of the consumer to duck & run while selectively receiving mail.
Comment from nvassarx on August 7, 2009 at 3:28PM EST
Donald Donald Oh Donald....wake up OH DONALD..Please look up Websters definition of SERVE..It is not LICK & STICK a stamp and the consumer is SERVED!Then 100% of all judgments would be uphelt in court as Served! It is the Legal Duty of Donald Daly to make sure the consumer is served...now if it were a check and not a SERVE, a first class stamp is concidered normal...UNLESS it is a large sum of money and it is DONE FedEX. Why do debt collectors like Donald have to Whine? Maybe its LACK of money, BONUSES....
Comment from nvassarx on August 7, 2009 at 3:44PM EST
This sounds like Donald Daly?Other panelists added that there are other instances in which the notifications are properly served, but the consumer lies in court about receipt of the notice.How can you lie in court? Isnt that against the law? Perjury?? A lie is when THE collector can show the Courts that the consumer was served & signed===hard evidence!! More than the JUNK that most collectors have to produce for a judgement.
Comment from MICHAEL GRIFFITHS on August 7, 2009 at 4:46PM EST
The battle lines are now drawn, the fighting will soon begin.
Comment from PublicServiceMsg on August 7, 2009 at 8:18PM EST
Most of the notices are sent certified mail and returned without being picked up at the post office or signed for at the door. Most collections also starts with skiptracing, finding the consumer to attempt to collect. If we can't get a current address, then how are the creditors to properly "serve" a party. Also, you know you went into collections and the possibility of legal recourse, why be surprised when a garnishment comes to your current employer? Ample opportunity is given before judgment is sought by most creditors. Know the laws of your state, move to a non-garnishment state, file bankruptcy or pay your bill.
Signed, Living in Texas, garnishment free. (Don't play with the IRS, they can garnish anywhere.)
Comment from DONALD DALY on August 8, 2009 at 8:20AM EST
nvassarx..My guess is a lawyer who is chasing the SERVERS while protecting the consumers rights, for profit. navassarx you miss the point by a mile, but we all have our own thought processors and some can't think outside the bubble.
Comment from Anonymous on August 10, 2009 at 8:55PM EST
My company uses both a private process server and sheriff. Our process servers are licensed and many are retired police officers. We had a consumer who was served at the sheriff's department, had to show proof of I.D. and still denied being served after we received a judgment. The goverment can attach wages without even obtaining a judgment on federal student loans. Are the people working in the government sector more honest? It wasn't that long ago where a DMV employee was arrested for selling fact I.D.'s to illegal immigrants. As far as social security being exempt then social security checks should be deposited into an specified account for social security only and no other funds should be co-mingled into that account. In many instances social security is only a small portion of the individual's fixed income. We all know that in 20 years there will be no more social security. Remember, people are people. You can find the good and the bad in anyone.
Comment from kjowen on August 10, 2009 at 11:44PM EST
Three words ... American Legal Process
The investigation may have eminated from the complaint of a consumer but that consumer isn't the one who claims to move at the speed of light in order to travel 10,400 miles in one day to effect "service".
Comment from kjowen on August 10, 2009 at 11:45PM EST
Three words ... American Legal Process
The investigation may have eminated from the complaint of a consumer but that consumer isn't the one who claims to move at the speed of light in order to travel 10,400 miles in one day to effect "service".