Over thirty-five years ago, Marc Galanter argued that courts in general favor "repeat players" in the legal system, such as debt collectors, because they have additional experience with the judicial process, access to experts at relatively low additional costs, informal relationships with court players, "credibility as a combatant," and the ability to play the odds in the long-term in order to maximize the chances of winning over time. In addition, repeat players can influence the adoption of rules through legislative change and through repeat arguments to the courts. As a result, the rules tend to favor repeat players. The district court collection claims context seems to bear out Galanter's argument, in that the lack of rules regarding evidence very much favors creditors, who, until very recently, have enjoyed the trust of the courts and thus have been able to steam roll debtors. The long-term impact of the robo-signing scandals on this established trust and credibility remains to be seen. And, because debtors rarely have the experience or knowledge necessary to challenge creditors in court effectively, they often lose when they do challenge the debt buyer in court. Without lawyers to represent them, consumers are unlikely to tap into the knowledge and power necessary to avoid be steamrolled.
More recently, Russell Engler found that prohibitions against giving advice to unrepresented litigants are routinely violated, particularly in consumer contexts such as landlord tenant or debtor creditor disputes. Instead, lawyers representing debt collectors induce debtors to agree to settlements that run roughshod over their rights, including to default judgments because an attorney advised them not to appear in court.
Approaching debt collection cases by enforcing a strict requirement of personal knowledge of the debts being collected and the business records, which underlie those debts, would solve many of the problems previously outlined in this series of blogs. It would require the debt collection and debt buying industries to adopt more reliable practices, keep debt buyers and other collectors from exploiting the courts to bully consumers, eliminate many of the suspicious debts currently in court, and address the problem of multiple and competing attempts to collect the same debt.
As indicated above, duplicative lawsuits on a single debt are common in the debt collection industry. Allowing debt buyers to sue and introduce documents without laying the proper foundation of personal knowledge only increases the risk of such duplicative judgments. Without indicia of trustworthiness and reliability of an original creditor and each intervening debt buyer's record keeping practices, it is impossible for a court to tell whether a debt buyer's records contain potential or actual errors. Insisting on such proof, though, would give consumers and courts a powerful tool for avoiding error.
Collaborative Writing by Rex C. Anderson, Esquire and Contributing Research/Writing by Kellye S. Smith