As anyone who visits my site or reads any of my writing can attest, I often point out that debt collectors often present laws based on little more than a “computer tape” containing very basic information about the alleged debtor and the debt. The New York Times has confirmed that essential idea in its article, “Automated Debt Collection.”
Filing a case every thirty minutes every working hour of the year
In the article, the Times points to a firm called Cohen & Slamowitz, a Woodbury, New York firm that specializes in debt collection. The firm has been filing approximately 80,000 lawsuits a year.
With just 14 attorneys on staff, that equates to over 5,700 cases per attorney. That in turn results in approximately two cases being filed per hour, every hour of a 365-day year. Of course, this leaves no time for the lawyers to do anything else in the lawsuit.
Computer software makes it possible
How is it possible? Cohen & Slamowitz relies on computer software to help prepare their cases, and the attorneys simply process the paperwork. As the Times article points out, a debt buyer typically sends a law firm an electronic database containing various information about consumers, including name, home address, outstanding balance, date of default and whether interest still accrues on the account.
Once a law firm gets the data, software like Collection-Master from a company called Commercial Legal Software can “take a file and automatically run it through the entire legal system,” including sending collection letters, subpoenas and lawsuits, Nicholas said. D. Arcaro, commercial and marketing vice president of the company. Although legal ethics requires a lawyer to conduct independent analysis to be reasonably sure that a case is well founded in fact and law, there is little time for that when you file two hourly lawsuits every hour of the year. The New York Times article can be found at: http://finance.yahoo.com/news/Automated-DebtCollection-nytimes-1413056388.html?x=0.
Debt Defendants Not Showing Up In Court Make It Profitable
The Federal Trade Commission also weighed in, saying the system for resolving consumer debt disputes was broken and needed “significant reform.” The agency urged states to take steps to make consumers more likely to go to court to defend themselves; currently, most do not, resulting in default statements. A court ruling gives debt buyers the ability to collect the debt through actions such as garnishment of wages or property.
“We’re pushing hard to make sure debt collectors have enough evidence, particularly when a consumer questions the debt,” said David Vladeck, director of the commission’s Office of Consumer Protection. Of course, this documentation does not exist in many cases.
There is a website that gives people who are being sued for debt all the information they need to take steps to protect themselves. If more people used it, they could probably force debt collectors to change their business practices.