Debt collection attorney Gary Nitzkin in Michigan says “[m]y best advice to debt buyers . . . DON’T DO IT.” Don’t sue, in other words. Why? Pretty much for the reasons I have addressed here, plus a few more:
- Debt buyers don’t have the documentation they need to prove their case;
- Other collection agencies already failed to collect, so subsequent debt buyers should expect to fail to collect, as well;
- Debt buyers risk violating the FDCPA and getting sued themselves;
- Debt buyers risk violating the FCRA (PDF link) and getting sued themselves; and
- When collecting on medical debts, debt buyers risk violating HIPPA and getting fined by the government for up to $50,000.
All of these are true, and yet debt collectors sue hundreds of consumers every day. Why? Because most never bother to call an attorney or even attempt to defend themselves. Debt collection law firms are “default mills.” In other words, they count on this, getting rich by filing lawsuits they know they are unlikely to win and then obtaining default judgments when the consumer fails to fight the lawsuit. On the rare occasions when consumers do stand up for their rights, the collectors usually dismiss the lawsuit and get away with their abuse of the legal system.