The Denver Post ran an exposé of sorts in its Sunday edition on the rise of consumer lawsuits against debt collectors and the plaintiffs’ attorneys who enable the practice. The piece focused on the huge increase in suits claiming FDCPA violations in Colorado and one particular attorney who seems to be driving that trend.
The article, “Consumers dealing with debt collectors become stuck in a vicious cycle of lawsuits,” notes that consumers typically get a raw deal after suing a debt collector. Even if they are victorious and collect $1,000 for a violation, their debts are still intact and they can still wind up back in a collector’s queue. Post reporter David Migoya begins his piece:
The long-slumping economy has been a boon to debt collectors, yet it’s become an even bigger windfall for the lawyers who sue them. Federal laws designed to protect consumers from abusive and unscrupulous debt collectors have become the tool for the newest form of “slip-and-fall” lawsuit where costly litigation is avoided in favor of quick settlements, industry insiders say.
In effect, some say the Fair Debt Collection Practices Act has morphed into little more than fodder for lawsuit mills cranking out hundreds of cases yearly — thousands nationally — enriching the lawyers filing them and minimally helping the consumers for whom the laws were written.
The article takes a very fair look at the other side of the complicated issue of debt lawsuits. It’s very interesting to see a mainstream publication printing what the debt collection industry has been saying for a long time.
“The statute has to change, to show real harm and damage done,” [FDCPA defense attorney Charity] Olson said. “Merely being annoyed should not be actionable. It’s a colossal instance of malpractice, and the consumers are no better off. It’s the latest in slip-and-fall.”
The Denver Post even ran a follow-up article online that spotlighted consumer attorney David Michael Larson’s tendency to focus on one particular debt buyer with his suits.
So what does this article mean to the debt collection industry? It might just be a case where a reporter found a certain statistic (in this case, a 63 percent increase in consumer-filed cases in Colorado last year) and investigated the root cause. It can also be taken as an indication that people are really looking into the role debt plays on the court system in the U.S., which can be both good and bad for the ARM industry.
Regardless, it is a very interesting piece and one that every ARM professional should read. Here’s another link: http://www.denverpost.com/search/ci_17488098