NY Times: Sued Over Old Debt, and Blocked From Suing Back

[villager]

<snip>

Mr. Cain said he never knew the lawsuit had been brought against him until the money was gone. Neither did other Baltimore residents who were among the hundreds of people sued by the collector, Midland Funding, a unit of the Encore Capital Group, in Maryland State Court. Some of them said they did not even owe any money, or their debt had long expired and was not legally collectible, according to a review of court records.

In any case, the Encore subsidiary was not licensed to collect debt in Maryland.

Yet when Mr. Cain brought a class action in 2013 against Midland Funding, the company successfully fought to have the lawsuit dismissed.

If the plaintiffs wanted to try to recover their money, they would have to do so in private arbitration. And because class actions are banned in arbitration, Mr. Cain and the others would have to fight the unit of Encore — one of the largest debt buyers in the country with vast legal resources — one by one.

“I can’t for the life of me understand how this is allowed to happen,” said Mr. Cain, who could not afford to pursue his case alone in arbitration.

In short, Encore and rival debt buyers are using the courts to sue consumers and collect debt, then preventing those same consumers from using the courts to challenge the companies’ tactics. Consumer lawyers said this strategy was the legal equivalent of debt collectors having their cake and eating it, too.

<snip>

Their strategy traces to a pair of Supreme Court decisions in 2011 and 2013 that enshrined the use of class-action bans in arbitration clauses.

The result, The New York Times found in an investigation last month, is that banks, car dealers, online retailers, cellphone service providers and scores of other companies have insulated themselves from challenges to illegal or deceptive business practices. Once a class action was dismantled, court and arbitration records showed, few if any of the individual plaintiffs pursued arbitration.

<snip>

http://www.nytimes.com/2015/12/23/business/dealbook/sued-over-old-debt-and-blocked-from-suing-back.html

[Xipe Totec]

1. Sounds like a job for RICO. nt

[villager]

2. A bank-owned government would never use RICO against actual bank-owned gangsters. nt

[msongs]

3. our legislatures, congress, and president are ok with this so what's the prob? nt

[Hoppy]

4. Don't worry. I'm sure Hillary will fix it.

[fasttense]

5. So they can illegally collect a debt that is no longer owed

And unless you have millions, you can't bring suit against them for their illegal tactics.

Ahhh capitalism, you rig the courts in favor of the rich just like you do the economy.

[villager]

6. And everyone keeps rolling over for it... so it will keep happening, again and again. nt