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Bad Debt Collectors and Their Prey: NYT Editorial Board

An excellent November 17, 2015 New York Times editorial highlights several widespread abusive collection practices, and calls on states to update collection and garnishment laws to better protect consumers from predatory debt collectors.  “For example, companies that buy up consumer debt for pennies on the dollar from creditors and then try to recover the full debt for themselves often pursue people for debts that are too old to be legally collected or fake documents intended to show that the debt is authentic.”  For years, consumer advocates have been pointing out these types of abuses.  Perhaps the NYT coverage will lead to greater public awareness and thereby subject collectors and the court system to greater scrutiny.  The editorial is reprinted in full below:

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Debt Buyers Seek to Escape Liability By Invoking Their Predecessors’ Forced Arbitration Clauses

Forced arbitration is a widespread problem for American consumers. Corporations bury complex terms in fine print, and then argue that consumers “agree” to arbitration in everyday contracts.  But in general consumers have little understanding of what forced arbitration is or what rights they are “agreeing” to give up. Put simply, forced arbitration means: NO JUDGE, NO JURY, NO RIGHT OF APPEAL.  Further, the arbitrator is not even required to follow the law.  Forced arbitration has been called a “silver bullet” used to kill consumer lawsuits.  It provides what Adam Levitin calls “bargain basement justice.”

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