Consumer Law

Debt Buyers Problems With Getting Documentation On Debts

By M. Stan Herring

An interesting web-page entitled "The Importance and Availability of Media in a Portfolio" gives us a brief inside look at the problem of debt buyers not being able to always get the proof they need to show ownership of an account that they allegedly have bought. We have previously blogged on this issue as we have found numerous Alabama consumers are sued by companies that will not or can not prove they own the account they have sued on.

In the web page we are referring to, collection insider Rick Shell makes this fascinating point:

When dealing with credit card portfolios, you will rarely obtain anything beyond a copy of an application, and the last few statements on file. In many cases, the application is not available, so you're forced to take an affidavit in its place. This is usually okay when you?re attempting to validate the debt for a default judgment, but does little for you when a debtor, judge, or magistrate specifically requests a copy of the application.

The author has this very practical seeming approach to the problem of often not obtaining the documents needed:

As a debt buyer, don't be discouraged when you have trouble with this aspect of debt buying, especially when you're dealing with debt that you?re buying at less than two cents on the dollar. Just take it in stride, and know that the price is that low because the portfolio has "issues." It's not uncommon for older portfolios to have a number of issues, so you'll simply need to look for other advantages in the portfolio that will balance out the fact that there may be little or no media available.

While this seems like a sound business approach, when Alabama consumers are sued and the debt buyer does not have the evidence to show ownership of the account, this becomes a very serious problem. This often results in the consumer winning the case. If you have won your case, then keep in mind our observation on what this means to your credit report as we blogged about "What Happens When You Defeat Collectors In A Collection Lawsuit".

Please contact us if you have any questions and we will be glad to help you in any way we can.

[Thanks to Sam Glover's blog post which alerted us to this interesting web-page].

Full post as published by Alabama Consumer Blog on January 28, 2008 (boomark / email).