Return of the Zombie Debt Collector

Martha Kunkle is making the rounds again. The Billings Gazette first wrote about Martha Kunkle in November 2009. That didn’t stop the Wall Street Journal from writing about her just last week, over a year later. A zombie story about a zombie debt collector.

But hey, it’s a good story. A dead woman bilked thousands of consumers out of their money for Portfolio Recovery Associates. Consumer law doesn’t get much cooler.

Like most debt buyers, Portfolio Recovery Associates had weak evidence—or none at all—to back up its thousands of lawsuits, so an enterprising employee started signing Martha Kunkle’s name to affidavits. It’s not clear exactly why. Maybe she was just bored. Maybe she realized that practically nobody looks at those affidavits, anyway, not even judges. In any case, it wasn’t so much robo-signing as zombie-signing.

Comically, Portfolio Recovery Associates representative said that its employees, who sign—on average—100 affidavits per day, “are guided by ‘a very rigorous set of policies and procedures.'” The dead ones are apparently not so rigorously policed, apparently.

Fortunately, a consumer lawyer did look at one of the Martha Kunkle affidavits, and Portfolio Recovery Associates was caught. Along with other defendants, including Johnson, Rodenberg & Lauinger, it settled for over one million dollars. That may not be the end of it, since Minnesota Attorney General Lori Swanson, famous in these pages for bringing down the National Arbitration Forum, says her office is looking into debt buyers who are falsifying affidavits in Minnesota.

That’s good, because robo-signing is rampant in the debt collection industry. Dead or alive, the debt buyer employees who sign hundreds of affidavits every day to support debt collection lawsuits are little better than zombies.