Debt collectors have attempted to intimidate consumers into paying debts that are prescribed or not owed at all in cases of mistaken identity.
If new rules are adopted debt companies would have to more fully document their accounts. Also proposed are requirements that would prevent a collector from contacting a debtor more than 6 times a week. And if a debtor dies the collector would have to wait a month before contacting the survivors.
The Consumer Financial Protection Bureau (CFPB) will begin a lengthy adoption process which may or may not end with the implementation of the rules. It promises to be a very politicized path to adoption. But there is some cause for optimism. Debt collection is the most frequent complaint the CFPB deals with. And the bureau began working with consumer groups and industry leaders three years ago to formulate acceptable compromises regarding these problems.
In Louisiana, an open account, like a credit card debt or a credit at a store, prescribes three years from the date of last activity in the account. LA R.S. Art. 3494 (4). Despite this many creditors pay no attention and attempt to collect on older accounts that are past their prescription date. Consumers are often not aware that they may have a legal defense to collection of a debt.
Another issue arises when a creditor has sued the consumer and obtained a legal judgment to enforce payment a debt. In Louisiana, a money judgment prescribes 10 from its date of signing. LA CC Art. 3501. Obviously, a much longer period than for an open account. Most of these judgments are obtained by default, which is when the consumer doesn’t make an appearance in court to defend the suit. Problems arise when the consumer has not been properly served notice and citation of the lawsuit before the judgment is taken. This even has a name “sewer service”.
Another problem arises when the creditor has insufficient proof of the debt. Consumer debt is often sold and resold at deep discounts to debt collectors. This exacerbates the problem of proof as vital documents are lost or so called robo-affidavits are filed without personal knowledge.
Consumers have been ill served by debt collectors where their lack of knowledge and vulnerability have made them easy prey to unscrupulous or careless operators.