Debt collectors have been suing consumers for years with very little proof that the consumer owes any money. You have probably heard some of these names: Persolve, LLC, Asset Acceptance, CACH, FFIC, Midland Funding, Cavalry, etc….
In two recent cases of mine, the debt buyer only had a bill of sale between different debt buyers and attached those as proof that my client owed money. Nowhere did my client’s name, address or account number appear. But this has long been accepted as proof that consumers owe money – even when they don’t.
California Senate Bill 233 is going to change this. The Fair Debt Buying Practices Act goes into effect on July 1, 2014. The new law will require debt buyers to confirm the identity of the consumer, as well as prohibiting a lawsuit from being filed without the debt buyer being able to verify ownership and the amount of the debt. As noted in the press release, 95% of consumer debt collection cases end in defaults. A lot of these lawsuits are based on nothing more than papers that don’t prove anything.
You will also be able to sue the debt buyer for violating the Fair Debt Buying Practices Act. If the consumer prevails, he/she will be able to recover damages, both actual and statutory, as well as attorney fees and costs.
While this will not end the abuse by debt buyers, it is a good step in making sure debt buyers play by the same rules as everyone else who wants to sue someone and have proof, not just pages, before filing suit.