Judith Fox Study of Debt Collection Practices

Judith L. Fox

 of Notre Dame has written Do We Have a Debt Collection Crisis? Some Cautionary Tales of Debt Collection in Indiana, 24 Loyola Consumer Law Review (2012).  Here's  the abstract:

The Federal Trade Commission, in 2009, raised issues about debt collection practices and called on jurisdictions to investigate local practices that may be abusive to consumers. This article is the beginning of a larger study of debt collection practices in Indiana. It examines debt collection cases filed in Indiana courts in a three month period of 2009 and 2011 While most research on this issues has been in small claims court systems, this article suggests that the same, if not greater, consumer abuses exist in other courts. The research shows a pattern of large, national debt collection firms moving away from small claims courts, despite the size of the debt being collected. The procedural hurdles in these courts make it easier to obtain judgments and may result in greater abuse to consumers.

 

Comments

[JJ]

It's certainly interesting that the debt buyers are choosing to file in federal rather than state court, but no evidence has been presented that such practice has had any abusive anti-consumer impact or that any such effect was intended.

I suspect that there is much more practical reasons and less nefarious explanation, as much as everyone loves to assume the worst of debt buyers.

Many (but not all) debt buyers don't file lawsuits themselves, but, instead, they send accounts to law firms and the law firms filed the law suits. Perhaps a more reasonable explanation is that different collection law firms are more comfortable in different courts?

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