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.”
In Junk Justice, I wrote about statistical outcomes of lawsuits filed by large debt buyers in Maryland. Based on my study, the years 2009-2011 had a combined total of over 121,000 cases filed by the sample group of large debt buyers in the District Court of Maryland. But now, the picture is different. We see a consolidation in the industry, and a drop in the number of filings.
Defective Debt Buyer Affidavits and the Lack of Data Integrity: Other People’s Records (“OPR”) are Not “Business Records” of Midland Funding
Barry Stimpson, like so many other Americans, was sued by Midland Funding, LLC. Midland claimed that it had bought a debt Stimpson owed to Capital One. Midland tried to prove that Stimpson owned it money with three affidavits. The District Court of Canyon County, Idaho, found that these affidavits were insufficient. The court’s decision merits reading for its clear and full analysis of the law of evidence as applied to debt buyer affidavits.
Imagine receiving a phone call that 25% of your wages are going to be garnished because of a credit card account opened 14 years earlier that was never paid off. Making things worse, you know you didn’t have a credit card from the bank in question at that time, so it can’t possibly be your debt. This should be an easily remedied error, but not if a court has already granted a default judgment against you, making you responsible for paying back money that you didn’t owe and didn’t find out about until it was too late.
A new National Consumer Law Center (NCLC) report argues that the Consumer Financial Protection Bureau (CFPB) should use its power to ban the collection of statute-barred debts:
In light of the inherent unfairness, deceptiveness and abusiveness that occur when collectors pursue time-barred debt and the inability of disclosures to adequately protect consumers, the CFPB should ban all efforts to collect out-of-statute debt—whether by litigation or other means.