Debt Collectors Clog Courts with Lawsuits Against Consumers

A recent article in the New York Times highlights the lengths to which debt collectors will go to put the squeeze on consumers. All too often, debt collectors will sue consumers for questionable debts, causing court calendars to clog and making people spend time, effort, and money defending themselves.

The article highlights a San Jose, California, woman who was sued for a debt she didn’t owe. Not only did the judge dismiss the case, but when the woman countersued LVNV Funding for violating the Fair Debt Collection Practices Act, she won the case.

All too often, though, consumers don’t know how to fight back, and so don’t respond when a debt collection agency takes legal action. In fact, according to the Federal Trade Commission, close to 95% of consumers don’t respond to a debt collector’s lawsuit. If that happens, a judge will typically rule in the debt collector’s favor, leaving consumers in a situation where their wages are garnished or money is taken out of their bank accounts.

The New York Times story points out that, in California alone, lawsuits filed by debt collection agencies have risen 20% over the past five years, and 96,000 were filed in the San Francisco Bay Area in 2009. The bottom line? If a debt collection agency files a lawsuit against you, you need to respond. Quite often, you may not be obligated to pay the debt, but if you don’t show up to defend yourself (which is what the debt collector counts on), you’ll wind up with a judgment against you. That’s why it’s important to engage the services of a fair debt attorney. It shouldn’t cost you a dime, and you may be in a favorable position to countersue under the Fair Debt Collection Practices Act and get a bundle from the unscrupulous debt collector.

Top Debt Collectors: #15 - LVNV Funding

We’re often asked about the top debt collectors in the country, so we’ve been doing a countdown for the top 20. We’ve discussed CBCS, RJM Acquisitions, Asset Acceptance, Creditors Interchange, and Arrow Financial Services. Today we’re covering number 15, LVNV Funding.

LVNV Funding’s sole business is purchasing debt from original creditors. The original creditor - like a bank or a finance company - writes off the debt as uncollectable, and then sells it to LVNV Funding. This type of company is known as a “junk debt collector.” LVNV Funding doesn’t actually collect the debt; instead, they outsource it to a debt collection agency. They often outsource it to Resurgent Capital Services, which in turn may outsource it to another collection agency.

In the meantime, though, many consumers are finding that LVNV is on their credit reports, as the company is notorious for devastating credit scores. The company has also been sued by consumers, who allege that LVNV does not substantiate claims of the debt owed. The company also brings its share of lawsuits against consumers, using law firms like Nelson & Kennard to do so.

Sergei Lemberg, Esq., focuses his practice on defending consumer rights in the areas of Fair Debt Collection Law, Consumer Fraud, Auto Warranty and Auto Injury litigation.

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