It seems so easy to just ignore phone calls and notices from collection agencies but doing so might prove to be detrimental to your finances. In some cases, bottom-feeder debt collectors are betting that consumers don’t really pay attention to notices they send. Florida residents should know about one way that debt-buying companies are targeting consumers to get money they claim is owed to them.
These companies are filing lawsuits against consumers in an effort to collect on debts they claim are owed by the consumers. The shady debt collectors are operating on the theory that the consumer won’t show up in court to fight the debt. A study done in 2010 seems to support that theory. It shows that 2 out of 10 people who are served with a notice or summons to go to court over an old debt don’t actually respond to that notice.
When a consumer doesn’t respond, the collection agency can get a default judgment against the consumer, even if the debt isn’t a valid debt. This means that a judge can order a wage garnishment, a bank account freeze or a home lien.
This method seems to be proving very lucrative for the debt buying industry. From 2009 through 2012, the four debt buying companies that report earnings showed a drastic increase in income made via legal collections. That amount was $582 million in 2009, but over $1 billion in 2012.
As a consumer, you have the right to request that debt buyers and collection agencies validate the debts they claim you owe. The information about the legal process for collections these companies are using shows how important it is for consumers to know their rights and utilize them appropriately to fight debt collectors.
Source: Huffington Post, “Debt Collectors Have Figured Out A Way To Seize Your Wages And Savings” Hunter Stuart, Jun. 02, 2014