CONSUMER PROTECTION PROJECT:
Defending Debt Buyer Lawsuits in State Court
In July 2011, the Standing committee on Rules of Practice and Procedure submitted its 171st Report to the Court of Appeals, pursuant to which the Court implemented changes to Rules 3-306, 3-308, and 3-509. The Standing Committee made the following observation about debt buyer cases at page 7:
Both nationally and in Maryland, there have been a multitude of cases in which the ultimate owner of the account sues the person it believes to be the debtor, knowing from experience that the defendant often does not file a notice of intention to defend or appear for trial. In Maryland, judgment by affidavit pursuant to Rule 3-306 is sought. The problem, which has been well documented by judges, the few attorneys who represent debtors, and the Commissioner of Financial Regulation, is that the plaintiff often has insufficient reliable documentation regarding the debt or the debtor and, had the debtor challenged the action, he or she would have prevailed. In many instances, when a challenge is presented, the case is dismissed or judgment is denied. In thousands of instances, however, there is no challenge, and judgment is entered on affidavit.
Current court dockets are inundated with debt collection cases and “consumer debt purchasing” has become a serious problem for low to moderate income people. These debtor defendants clearly do not have the resources to hire lawyers to advocate on their behalf and consequently, many are left wondering what their rights are and attempting to pay debts they may not even owe with what little resources they have left. Consumer protections are being forfeited because they cannot afford legal representation.
HOW TO GET INVOLVED:
The Pro Bono Resource Center of Maryland is offering a FREE training program provided to attorneys who provide ten hours of pro bono legal service to consumers in debt buyer cases through brief advice clinics and/or direct representation. Please visit our training page for more information.
WANT TO LEARN MORE?
For an in depth look at the debt buying industry and its problem practices, please read:
Reports:
“FTC letter to the Consumer Financial Protection Bureau.” Federal Trade Commission. March 13, 2012
“Fair Debt Collection Practices Act Annual Report.” Consumer Financial Protection Bureau. 2012
Articles:
“Banks Play Fast and Loose with Credit Card Debt.” USA Today. April 6, 2012
“Why People Hate the Banks.” The New York Times. By Joe Nocera. April 2, 2012.
“Bank of America Sold Card Debts to Collectors Despite Faulty Records.” American Banker. By Jeff Horwitz. March 29, 2012.
“Borrower Beware: B of A Customer Repaid Her Bill Yet Faced a Collections Nightmare.” American Banker. By Maria Aspan. March 29, 2012.
“How a Whistleblower Halted JPMorgan Chase’s Card Collections.” American Banker. By Jeff Horwitz. March 16, 2012.
“OCC Probing JPMorgan Chase Credit Card Collections.” American Banker. By Jeff Horwitz. March 13, 2012.
“’Robo’ Credit Card Suits Menace Banks.” American Banker. By Jeff Horwitz. January 31, 2012.
“Zombie Debt Creeps Onward in Idaho Courts.” Idahostatesman.com. By Audrey Dutton. January 22, 2012.
“Demand That Collection Agencies Keep ‘The 5 New Year’s Resolutions for the Conscious Bill Collector’.” Huffingtonpost.com. By Jerry Ashton. January 11, 2012.
“America’s Abusive Debt Collectors.” Thedailybeast.com. By Gary Rivlin. January 1, 2012.
“Regulate Junk Debt.” Fredericknewspost.com. December 18, 2011.
“Unpaid Bills Land Some Debtors Behind Bars.” NPR. By Susie An. December 12, 2011.
“Complaints Show Debtors’ Frustration, Fear.” Fredericknewspost.com. By Bethany Rodgers. December 11, 2011.
“District Court of Maryland Stays Thousands of LVNV and Resurgent Capital Services Debt Cases.” Maryland Judiciary. November 2, 2011.
“Standing Committee on Rules of Practice and Procedure Notice of Proposed Rule Changes.” Court of Appeals of Maryland. July 2011.
“Past Due: Why Debt Collection Practices and the Debt Buying Industry Need Reform Now.” East Bay Community Law Center & Consumers Union of United States, Inc. By Rachel Terp & Lauren Bowne. January 2011.
“The Debt Machine: How the Collection Industry Hounds Consumers and Overwhelms Courts.” National Consumer Law Center. By Rick Jurgens & Robert J. Hobbs. July 2010.
“Debt Deception: How Debt Buyers Abuse the Legal System to Prey on Lower-Income New Yorkers.” The Legal Aid Society, Neighborhood Economic Development Advocacy Project, MFY Legal Services, & Urban Justice Center, Community Development Project. By Claudia Wilner & Nasoan Sheftel-Gomes. May 2010.
For more information about the Consumer Protection Project, contact Emily Fisher, Esq., Consumer Protection Project Manager, at 410-837-9379 ext. 3054, 1-800-396-1274 ext. 3054, or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Click here for training information.