Monday, July 12, 2010

FTC says debt collection system is "broken"

MCRC is very happy to see that the FTC is recommending arbitration reforms. We worked for local mandatory-arbitration reform in the General Assembly this year but the legislation died in the Senate Finance Committee.

"A new Federal Trade Commission report concludes that the system for resolving consumer debt collection disputes is broken, and recommends significant litigation and arbitration reforms to improve efficiency and fairness to consumers.

The report, “Repairing A Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration,” reflects information gathered at roundtable discussions the FTC held throughout the country in 2009, as well as public comments and the FTC’s experience in debt collection matters. The roundtables followed a February 2009 report that identified some concerns with debt collection litigation and arbitration, but concluded that more information was needed about certain debt collection litigation and arbitration practices before further recommendations could be made.

The FTC’s 2009 report found that debt collection litigation raised concerns about collectors failing to properly notify consumers of suits they have filed, collectors filing suits based on insufficient evidence of indebtedness, courts frequently granting default judgments against consumers who do not appear or defend themselves, collectors seeking to recover on debts beyond the statute of limitations, and banks freezing funds in bank accounts that are exempt from garnishment by law." Read more here.

    ____________________________________________

    Subscribe to MCRC blog updates via email; click here.

No comments:

Post a Comment