ShareThisNo one is calling their bluff.
Debt collectors are filing lawsuits and winning judgments against thousands of Americans every year, often without having any concrete evidence to support their claims. That's because the defendants often don't appear at the hearing.
Not showing up in court results in an automatic win for the collectors, and that, in turn, often gives them the legal right to tap a debtor's bank account or salary.
"I'm behind the eight ball," said James Flanagan, a Suffolk County, N.Y. judge who oversees 25 debt collection cases a day. In all but one or two of Flanagan's cases, the defendant does not show up, Flanagan said. "I can't do anything about it."
Flanagan's experience is not unique. Judges around the nation contacted by Scripps Howard say the absentee rate in debt collection cases routinely exceeds 70 percent.
Experts and judges say defendants avoid court for several reasons: They don't think showing up will help; they're too embarrassed; or they were never notified that they had a court date.
And the courts are increasingly busy.
With the worst recession since the Great Depression pushing more Americans behind on their bills, the number of collection lawsuits across the nation is rising, according to the debt collection trade group, ACA International.
In New York City alone, courts handle 300,000 debt collection cases a year. Seventy percent of defendants never show up and have automatic judgments entered against them.
Frequently, the collectors filing lawsuits aren't the original creditor. Rather, they have bought the debt from someone else, and they don't possess the original paperwork that documents the debt.
That doesn't deter their lawyers, who typically file lawsuits without supporting proof.
DC 37 Municipal Employees Legal Services, which is affiliated with the AFL-CIO and serves retired New York City employees, found that in 238 recent debt collection lawsuits the collectors could substantiate their cases just 5.5 percent of the time. They also found that in more than a quarter of the cases, defendants first found out about the debt collection lawsuits after their salaries were garnished or their bank accounts frozen, according to a December 2009 report.
"I don't know if (the system is) broken completely, but it certainly needs overhauling," Fern Fisher, deputy chief administrative judge for New York City Courts, told Scripps Howard. New York City's court system is taking steps to ensure collectors have evidence, but Fisher wants a federal law requiring second-hand debt buyers to keep records of what they're buying.
"They come to court without books and records. All they have is their record -- and that is basically what was bought, which could be inaccurate," Fisher said. "It's an issue of fairness to make sure they're collecting debts that are accurate and correct."
When defendants do appear in court, they have an excellent chance to reach a settlement or win their case entirely because the debt collectors often can't back up their claims.
When Memphis, Tenn. defendants ask to see evidence of their debt, collectors more often than not can't produce it and drop the case, according to General Sessions Court Judge Deborah Henderson.
Despite this, Henderson said she sees no need for judges to scrutinize debt collection lawsuits. She thinks collectors shouldn't be required to actually gather evidence before suing. "If that's the case, probably 50 percent of them wouldn't get filed," Henderson said.
In Palm Beach County, Fla., there's a "wide range" in the level of evidence collectors bring, according to judge Peter Evans. Some collectors can document credit applications, each bill sent, every charge and every payment. Other collectors have nothing but a "computer printout that you don't know where it came from, with just a name and an amount," Evans said.
"The defendant needs to show up and ask to see. If they don't understand why they are being charged for certain things, the plaintiff is required to show why," Evans said. "But if the defendant doesn't show up to request that, it may not happen."
(E-mail Isaac Wolf at wolfi(at)shns.com)
