July 30, 2011

Arizona Courthouse doors spin as rules change

In some ways, the upswing in these suits parallels other developments that are placing some courthouses under a crushing volume of recession-related consumer debt lawsuits.

Courts in Arizona, Florida, Nevada and other regions hit hard by the staggering economy report that credit card companies and collection agencies are filing a record number of lawsuits against delinquent customers. At the same time, some jurisdictions are requiring collectors to meet a higher burden of proof before winning -- or even filing -- their cases.

"Consumers should take from this that, if they have been victimized by illegal debt collection practices, errors in consumer reports or improper use of consumer reports, they have rights under the law, and should consult with a lawyer about steps they can take to protect themselves," said Harris, the consumer-rights attorney.

Still, it could be a mistake to just take the surging number of lawsuits at face value, according to the debt collection industry.

"Peel back the onion," Schiffman said. "There is more than meets the eye when looking closely at statistics like complaints or lawsuits in that they don't necessarily mean an increase in actual abuse of consumers.

"Collectors absolutely need to do better in complying with the law, but it's far too easy to jump to conclusions that paint a more insidious picture," he said.

foxbusiness.com


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