

Automated Debt-Collection Lawsuits Engulf Courts - eplanit
http://www.nytimes.com/2010/07/13/business/13collection.html?partner=rss&emc=rss

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akadruid
In the long term, this actually bodes well for society.

Previously, the reason for not collecting debt was due to the higher cost of
legal action, resulting in people using a variety of methods from simple
reminders and payment plan offers, to intimidiation and threats.

Now that legal action is cheaper, courts will be requiring much more is done
to ensure accuracy and fair representation. This will still be fairly cheap
(things like ensuring the bank's data dump includes all the relevant
documents, and verifying the records that make up the chain of custody for the
debt, which are all just electrontic transactions), resulting in the ladder
becoming firstly reminders and secondly a fair and accurate hearing in court,
with hopefully no resorting to threats and intimidation.

Cheap and effective justice is something to be praised, and in this case will
eventually reduce the cost of credit too - and increasing better informed
consumers of credit mean a competitive marketplace, passing the savings on to
where they will boost the economy overall.

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rdtsc
> In the long term, this actually bodes well for society.

Perhaps in a very long term after there is an outcry against bogus and
erroneus debt lawsuits.

> Previously, the reason for not collecting debt was due to the higher cost of
> legal action, resulting in people using a variety of methods from simple
> reminders and payment plan offers, to intimidiation and threats.

Now in addition to reminders, payment plan offers and bogus threats, they can
also use the state to intimidate and jail debtors. Might as well just start a
debtor jail like in Saudi Arabia.

> Now that legal action is cheaper, courts will be requiring much more is done
> to ensure accuracy and fair representation.

Somehow I see the opposite happening, at least in the short term. The cheaper
it is the more errors will be commited. Any little debt collection agency can
acquire, sell and re-sell these databases of debt-ors. In the process
spreading and entering bogus data and errors. The justice seems to be cheaper
for the debt collector who can fire off lawsuites from a database table, but I
don't see this being cheaper the debt-ors. This is just the collection
agencies getting the state to do their job for them.

> Cheap and effective justice is something to be praised, and in this case
> will eventually reduce the cost of credit too.

I agree as long as debt-ors also get to benefit from it not just the
collectors. Collectors should not be able to file lawsuits in Alaska or Hawaii
for debtors that live in Florida for example. Someone has to make sure the
debtor received their summons so they know there is a court case they can go
to and defend themselves.

To summarize, I think cheap justice will also mean a lower quality justice or
justice that benefits only one party.

~~~
akadruid
Hence cheap _and effective_ justice being the improvement.

Justice that benefits only one party is of course no justice.

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patrickgzill
With this method, unsecured debt becomes very nearly the equivalent of secured
debt, with the state assisting in enforcement.

At least I think that is part of the strategy, as you can see in this article
from Minnesota about people being arrested over unpaid debts, at taxpayer
expense.

[http://www.startribune.com/investigators/95692619.html?elr=K...](http://www.startribune.com/investigators/95692619.html?elr=KArksUUUycaEacyU)

Quote from above article:

"Admittedly, it's a harsh sanction," said Steven Rosso, a partner in the Como
Law Firm of St. Paul, which does collections work. "But sometimes, it's the
only sanction we have."

Taxpayers foot the bill for arresting and jailing debtors. In many cases,
Minnesota judges set bail at the amount owed."

~~~
joeyo
Yay debtor's prison!

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wheaties
Madoff - the guy who made off with billions of dollars

Fuld - the guy that gambled Lehman's fortunes and ultimately had to fold his
hand

Slamowitz - the guy who's automated lawsuits slammed the courts, clogging the
system

...

