Effective October 1, 2009, North Carolina consumers have additional protection from debt collectors. Debt collectors in North Carolina are required to produce documents showing that they are the ones who are owed the money. Why is this important?
Most credit card companies do not do their own collection. They refer the cases to debt collectors. But these collectors are actually debt buyers. What is a debt buyer? A debt buyer is a company that purchases large quantites of debts from different creditors. These companies buy thousands of debts and then decide which ones to collect and which ones to sell – again. The new debt buyer than buys thousands of debts and decides which ones to keep and which ones to sell – again. This goes on and on. The paperwork is called an assignment and many times the assignment is dated after the sale.
This North Carolina law is going to restrict this behavior. Debt buyers are going to have to actually track the paperwork and make sure they can prove what is owed and that it is owed to them. This is a huge win for North Carolina consumers.