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Know Your Consumer Rights When Debt Collectors Pounce

As financial regulators in New York have announced the intention to implement more stringent standards to curb widespread debt collection abuses in the state, people across the country are continuing to receive notice that they are being sued by third-party agencies.

Our Miami consumer rights lawyers know that often, these third-party collection firms, which you’ve probably never heard of unless you received notice you were being sued by one, don’t play the rules.

One of the key players include:

  • Midland Funding
  • Asta Funding
  • Portfolio Recovery Associates
  • Encore Capital Group
  • Firstcity Financial
  • Asset Acceptance Corp.
  • Unifund
  • Sherman Financial Group

Firms like these make millions by purchasing past-due debts from big-name banks and creditors. These grabs are often made for pennies on the dollar. The firms then invest all of their resources into hounding you to make you pay. In a lot of cases, that has meant filing civil lawsuits.

Despite the fact that debt collection practices are strictly regulated by the government, third-party debt collection agencies have a notorious tendency to skirt the legal boundaries. Debt collection agencies have recently been in hot water with government leaders across the country for filing mountains of lawsuits regarding debts that were never verified.

That’s right: You may or may not owe the debt. The issue, however, is that many of these collection agencies can’t prove it either way.

This is where it’s important for you to understand your rights. Many consumers have made the mistake of assuming that because they’ve been sued, that’s the end of the story. Many debtors never even show up to court for this very reason, and these firms receive default judgments in about 90 percent of cases. That means they have the power to enact measures to garnish your wages and drain your bank accounts.

However, the truth of the matter is that if these firms were challenged on even a fraction of the claims, they’d be leaving court empty-handed probably more often than not. If these companies were forced to prove the debts owed, many couldn’t do it. Again, this is true regardless of whether you owe the debt.

These companies prey on the fact that most of the people they are suing have never before been wrapped up in the legal system. These companies know the ins and outs, and they are betting on the assumption that you are new to this and you won’t bother to fight back.

So let’s say you owed money on an old credit card from Bank of America. You have defaulted on that debt. A third party buyer comes and purchases that debt from Bank of America. The bank writes off the rest as a loss. From their standpoint, at least they’ve recovered something. Now, this third-party buyer starts hounding you.

A big mistake people make is ignoring these initial contacts. It’s easy enough when you think, “Who is Midland Funding? I don’t owe them anything!” But when Midland Funding decides to turn around and sue you, they can use your non-response as proof to the court that they attempted to work with you and you were not receptive to them.

Bringing a consumer law attorney into the fold early on can help you resolve these issues so you can avoid a default judgment. That might mean working out a settlement prior to a lawsuit. Or, it could mean fighting the firm in court, particularly if the debt is old or if your lawyer has reason to believe the company can’t prove their standing in the case. Often, companies who hear back from defendant lawyers simply drop that case. There are typically far easier targets and your case can quickly become not worth their while.

If you’re battling debt collection or foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.

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