Debt Collection Companies Have Hijacked the Justice System
aclu.org
aclu.org
They suffer from the same plight as the majority of the public-side of our legal system. Too much work and not enough workers.
Judges, prosecutors, police, public defenders, etc...
They all have such a great case load that to examine every single document in detail would grind the entire machine nearly to a halt. The system needs an overhaul but it will not get one in the current political climate. The judicial branch is supposed to operate independently of the legislative and executive branches, but control lies with the controller of the budget.
Reminds me of an outrage a local newspaper reported on several years ago. A fire-rescue/EMT operation had a target response time of X, and had actually been responding in about half that time. This was seen as an indication that they were overstaffed or had too much money/equipment, and the proposal was to reduce the staffing/budget/equipment levels until the response time more closely tracked the target.
Oh, he owes $127 and he's not here? Arrest warrant!
The "effect" shown in the study that demonstrated this was probably caused by batching of certain kinds of defendants/cases by time of day, e.g. put the longest (most difficult) cases first, then have a bunch of easy no decisions right before the break. (That's not what really happens, it's just an example, I don't remember what really happens).
(Once, I just waited it out; eventually, they sent me mail saying my license had been reinstated).
Also: I get so much goddamn junk mail that we can barely keep up with paper mail (I try to have the important stuff sent to my office instead). And a lot of municipal and state process gets routed through paper mail, which is my least effective communications mechanism.
This is a huge problem and I really wish more institutions would switch to email/phone services. Mail is incredibly unreliable.
Last year I had a medical bill which I completely missed due to a changing address. It was something I could've easily paid, but I didn't even know it existed until I got a large ding on my credit score.
This seems to imply that financial punishment is the only thing that people will react to, and also that compliance is solely a matter of deterrence. I'd argue both are false. You could easily convert tickets into community service etc. Social shaming has made people "compliant" in all sorts of situations for millennia. Handing out a speeding ticket to someone without considering if they'll be able to pay it (i.e. without considering if the punishment is appropriate TM) is making things worse for no good reason.
10 years in prison or 50 hours of community service, however, exact what appears to have the same effect regardless of who is being punished.
Also, how do you sentence someone to community service if you can’t get them to show up in court?
I do get the feeling however that we're making two different comparisons here. You seem to be comparing the "do community service" scenario to "pay a fine" scenario. I am comparing the "pay a fine. oh, you can't? then do community service" scenario to "pay a fine. oh, you can't? then go to jail" scenario.
Granted, that kind of casy by case justice costs time and effort on the side of the state (i.e. tax payer) but personally, that's just the price of having actual "justice for all".
What happens in these cases is that someone doesn't show up to court. A bench warrant is issued, and they get arrested months later when they get pulled over for speeding or something unrelated, and the police find the warrant. At that point, the court can't immediately drop everything and hear the case. They get put in jail for a day or two until a bail hearing, at which point the court will set a new court date, and decide whether to require the person is required to post bail as a guarantee that they'll show up this time, or whether they'll be held in jail pending the court date. At this point, the judge can't order the person to do community service--they've done nothing wrong other than fail to show up to court, and the only reason they're in jail is the risk that they won't show up for the new court date. Many people can't post the bail, so they sit in jail waiting for their new court date.
No matter how lenient you are with debtors, at the end of the day the court needs some way to force someone to participate in the process of deciding what to do. Even if you say "we'll forgive small debts if the debtor is poor," how do you decide that if the debtor won't show up to court?
Debt collectors sue to get a court judgement against people who won't otherwise pay, so they can use the power of the state to garnish wages, levy bank accounts, etc. It's no surprise that they win in court. The debts are usually valid. It doesn't help debtors' cases when they don't show up. Then they get a default judgement.
Even with a judgement against you, you still won't get arrested for not paying. But if you don't, the creditor can then request a debtor's examination to which the court requires you to show up. At the examination, you'll be asked about your assets and income, so the creditor knows how to collect by force.
What happens if you don't show up to a debtor's examination? The creditor can ask the judge for a bench warrant against you. What happens next depends on the state and county. Sometimes the sheriff knocks on your door and gives you a piece of paper telling you to come to court, or else. Sometimes they do nothing until you get pulled over for some other reason and the warrant comes up.
In any case, what's happening to some people is that they're being sued over debts they owe, not showing up to court to defend themselves, getting default judgements against them, still not paying, getting summoned to court for a debtor's examination, not showing up for that, and then getting a bench warrant issued.
If you don't show up for jury duty, the judge can issue a bench warrant. They probably won't, but they can. If you get subpoenaed and don't show up, bench warrant.
All this is to say that far from the courts criminalizing debt or being manipulated by debt collectors, they are simply acting in their capacity to enforce civil judgements. You know, the seventh amendment? Suits at common law?
(a) debts of small sums
(b) with insufficient evidence that a debt is actually owed (apparently hoping that the defendant won't be able to competently defend themselves.)
(c) with insufficient notice to the defendant (apparently, this is the plaintiff's responsibility in some jurisdictions.)
(d) with insufficient consideration for the defendant's situation (i.e, physical or mental disability, single parents that cannot afford childcare, etc.)
It seems self evident that these situations are unjust and that reforming the process is desirable, wouldn't you agree?
Of the situations you listed, the only valid reason for not showing up to court is because you weren't aware. But because the stakes are so high, judges in California require that parties have been personally served by a registered process server before they'll issue a bench warrant for not showing up to a debtor's examination. I assume other states are similar. Correct me if I'm wrong.
I actually think that the process that the courts have for enforcing judgements is much fairer than the tactics that debt collectors often resort to. There's a reason that laws like the Fair Debt Collection Practices Act exist.
You are correct about the responsibilities of individuals, but that is not the only thing at stake. The system can be at fault for wrongly placing such responsibilities on people.
Consider the "with insufficient evidence that a debt is actually owed ..." part. Sure it is your duty in that case to turn up and get the thing dismissed. But the fact that you were forced to turn up means your freedom has already been compromised.
Small debts are also a symptom of a one-sided system. Civilised people usually settle small matters without going to the courts. Courts have to be making things pretty easy for creditors before that becomes a cost-effective way of collecting small debts.
That is the cost of living in a civilized society where we can settle our conflicts before an impartial judge instead of by the law of the jungle. Anyone can sue you and make you (or your lawyer) show up in court.
>Small debts are also a symptom of a one-sided system. Civilised people usually settle small matters without going to the courts. Courts have to be making things pretty easy for creditors before that becomes a cost-effective way of collecting small debts.
If you make it harder for creditors to collect on small debts, then you will make it harder and more expensive for the poor to get access to credit.
Harder? Fat chance. They'll just get the laws changed to screw people over further. Of course it'll be in the name of "access to credit".
I can't fault them for that. Sadly, it's not profitable to help people.
Its not the rational and logical who use payday loans with similar interest. Its the single parent families. There's children involved, power threatened to being turned off. There's a car repair needed for they can work. You know, poverty.
And your excuses are just that- rational justification to fuck over poor people trying to make the best of bad answers.
If you don't give them the loan, the power will definitely be turned off. If you give them the loan, they can pay the power bill.
If a family needs a few bucks to make things go round we should help. But trying to make money helping is likely to be counter productive.
Yes, you need the state to step in. And no when you phrase it as people exploiting the system, it won't help either ;)
The world didn't grow to the level of abundance that we have today by everybody agreeing to work for each other for free. We grew through voluntary, mutually-beneficial, exchange.
Many make less than the required minimum they need to survive in the USA, given things like dying vehicles and rotting residences and rising rent.
So it may cost $900/month to live total, but your fridge died and spoiled food. So its now $1000 cost, and at -$100. So you sell a part of yourself to a check cashing company and go further in debt. But you can eat. Who knows what next week will be like.
Thats being in poverty. Sure we can make excuses that "its for providing loans". Yeah, but they are extracting what little the people in poverty have for a little bit more skin.
And that's absolutely unethical. Well, unless you work in that industry.
Parents feeding their kids aren't.
Herearound any extension of credit with an annual interest rate above 15% is considered usury, which is a criminal offense.
But in a healthy system, it only happens when they have a substantial claim and a real belief they will win; because otherwise it is costly to them. There are normally strong incentives to settle privately.
And that too is part-and-parcel of living in a civilised society. The rule of law requires that officials, or those who influence them, do so in an orderly way and don't just wield it like a stick.
I don't mean here to determine whether that's a good course of action, just pointing out another good reason for not showing up to court.
That said, I do understand that in some circumstances it might be the sane thing to do: for example when 99.99% of everyone else is wrong and you are right. For example; advocating for your rights as a woman in a strict Muslim country.
It also specifically states that many times people were jailed without even being aware that there was a suit against them. This implies that many jurisdictions do not require a formal serve process, since that process is designed explicitly to prevent this situation.
But the broader issue is that even if it is "their own fault" for missing court, a tiny amount of debt combined with a failure (intentional or accidental) to adequately navigate the legal system can land you in jail.
I think the ACLU's contention is that that is, a priori, wrong. And I think anyone with an ounce of empathy would agree with them.
The issue is not debt here, it's not showing up for a court date. The exact same thing would happen if you got a ticket and had to appear before a judge and didn't show. Or if you had a child custody trial and just blew off the date.
> If you don't show up for jury duty, the judge can issue a bench warrant. They probably won't, but they can. If you get subpoenaed and don't show up, bench warrant.
For starters, instead of throwing people in jail for missing the debtors examination, they can complete it without your input. They can already garnish your wages or look at the last tax filing so there is enough information for a rudimentary examination.
I think you're missing that next logical leap though. Courts generally have hours from 9-12pm and 1-4pm. I'm going to make the assumption that a significant percentage of people that end up having a bench warrant issued for owing debts are those on the low end of the income scale, generally service and retail jobs. These jobs are generally the most inflexible in terms of scheduling. Also, consider that some of these people may be transient and/or homeless (From sleeping on a relative's, friend's etc. couch or sleeping on the streets) Your options then come down to: 1) Go to court and risk losing your job if you do not have an understanding employer, which can snowball into losing housing 2) Get a lawyer 3) Take the hit to your credit score, make whatever payments one can on the debt, hope for the best but cross the bridge when it comes to it and focus on more immediate concerns.
> If you don't show up for jury duty, the judge can issue a bench warrant.
Employers are legally obliged to excuse you for jury duty so the comparison is not that apt.
Siderant: It is somewhat ridiculous that the whole court shuts down for lunch instead of staggering schedules, especially when often that is the only time that people can show up to court. Those who can afford to do so generally send a lawyer, who get their own special line to save their time.
If you owe a debt, you are already penalized with collection costs and a penalty to your credit score (In my not heavily researched position, that should be enough. People who take on debts like these often are not financially literate. Anecdotally, I've also found it a bit surprising the number of people who do not understand expoentiation, thus making it nearly impossible for them to truly comprehend compounded interest rates). Not only are these people being penalized multiple times for the same issue, it's enforcment is being subsidized by taxpayers. They're also being criminalized, endure the trauma and mental, if not physical, torture, and be subjected to the detrimental health consequences of a prison diet (which only seems to require a minimum number of calories as its nutrition requirement) that is the American prison system. Not to mention the stigma and reduced employment opportunities that come with being a part of that system
I have the opinion that it is morally unconscionable. Whatever technically sends them to jail, the issue originates from an unpaid debt and has a chance to cascade down to jail. You're criminalizing people for unpaid debts while those with means can engage in the exact behavior, but through the use legal instruments can declare bankruptcy or take on the debts through a fictitious entity with a limited liability (often both). It's literally just a stroke of a pen (incorporation of an llc or other fictitious entity via our legal system. For me, it's a ritualized incantation of a magic spell) that separates the two. If these loans are so risky that they need this kind of enforcement to be profitable, perhaps its removal would mean that some of these loans are not made in the first place. Also, time spent in jail does nothing towards the actual debt, but that is once again subsidized by taxpayers. (I assume that they’re in jail for failure to appear, so after they get out and most likely have lost their job and will find it harder to get a new one, and after all these punitive measures nothing still has gone towards the principal).
TL;DR: It sucks being poor. It really sucks in America to be poor [1]
[1] https://www.economist.com/news/united-states/21663262-why-lo...
I encourage you to imagine a world without the rule of law.
The point is that the courts and police, although vilified in this day and age, actually by their very nature do help the poor and destitute. Just maybe not as well as they could, ideally.
It's discriminatory purely as a function of money. The more money you have, the "more equal" you are and the more rights you can exert. It also means the less subject you are to criminal laws, as you can mount a powerful defense as opposed to someone who makes 20k/yr in the slums who is statistically likely to be black or hispanic.
But our society has spoken, that it's ok for poor people to get sent away and their lives destroyed as a primary function of money.
I think much of this bias emerges for two reasons. First, the news we hear is usually bad news. One can only hear so much bad news before developing negative bias. In a large nation like the USA with so many people, abuses of power are almost guaranteed to happen once in a while. It's critical that a free press report on these incidents to keep institutions honest, but an unfortunate side effect of this is negative bias against those same institutions that so often work well and protect us.
The second reason is that institutions do have power over us, and look large in our lives. In comparison to them, we are very small. This can be disconcerting and uncomfortable for some.
Let’s not ignore all the ways the court system has succeeded, oftentimes in numerous tiny ways (i.e. cases at the state level that set important precedent and have pretty fair outcomes for the involved parties. C.f. restrictive covenants on deeds. The rulings for my state (Michigan), at least, seem pretty well-reasoned and legally logical.)
That is, they're reading it as "since no institution has totally succeeded, I encourage you to imagine a better approach" rather than "while no institution has totally succeeded, I encourage you to imagine how much worse it could be".
When you issue loans at xxx% interest, non payment for a lot of borrowers is baked in. Plus, collection should not free (taxpayers money)
If I loan you $10 and you don't repay it, it's never going to be worthwhile for engage the legal system to reclaim that money. If there's no realistic threat of coming after somebody for $10, then no $10 loans will be offered. I think it's nice to have an environment where legal remedies are accessible to everyone for little to no marginal cost. It promotes pro-social behavior if everyone knows that everyone knows that contracts are always enforced regardless of the economic standing of the participants.
Rewinding a bit, when I went for my hearing though I was talking with my attorney and the magistrate that was handling the case. She expressed a great displeasure that this happens all too often and that most judges in civil cases will just rubber stamp what over a creditor files if there is no one there to oppose from the debtor side. Separately my attorney told me that Florida laws/courts make it very easy for creditors to do this.
Edit: just read your profile. I think you’re doing fantastic work!
Personally, I think people get scared or have a fear of facing a debt collector in court. I believe that when it comes to small claims judgments (i.e. under $10K) there should be a more personal approach that encourages resolution instead of fear. Maybe instead of "default judgments" that are rubber-stamped by judges, the courts move to a more hands-on approach with hearings between mediators, the creditor, and the debtor. While this may require manpower, the time/cost savings of jailing debtors would be savings in the end. I hope the ACLU is successful in getting legislation passed.
> most judges in civil cases will just rubber stamp what over a creditor files if there is no one there to oppose from the debtor side.
Maybe we should teach this better in school, but you gotta show up to court, even if you have to do it without a lawyer. This isn't something that only happens to poor people--even big corporations can have huge default judgments entered against them if they don't show up to defend themselves. (This typically happens with foreign companies who blow off U.S. legal process because they have no U.S. assets.)
This! Sadly, there are many government services that are intended to help the poor in these situations, unfortunately, there is a lack of awareness and/or education about what is exactly available, to whom that help is for, and how to go about receiving that help. For example, many courts have pro-bono attorneys available a few times a month to provide legal advice to those who can't afford to hire an attorney. Most often these services are available for free on a first-come-first-serve basis regardless of income level. They are intended not for criminal defense, but instead to help people navigate civil court issues (i.e. evictions, divorce, collections, etc...).
Yes, showing up can be hard for someone living day-to-day/paycheck-to-paycheck. No amount of education or resources is going to solve that problem. One alternative solution could be for courts to offer alternate hours for these cases.
If people have less than say 5k in assets just block any sort of wage garnishing, etc.. and dismiss the case. Forbid collection of debt, etc. And put the burden of proof onto the collector.
We shouldn't allow debt collectors to take the clothes of peoples back, why should we allow debt collectors to take the last dollar.
I'm not saying this is the only solution, just one of many. The point keep poor people out of the court system, they can't pay anyways, what's the point?
This is already the case: in order to convince a court to garnish wages, debt collectors have to prove to the court that the person accused actually owes the debt. They could also be required to provide evidence that the person is wealthy enough to pay.
A person not paying and not being able to reasonably afford to is no crime and should not involve the court at all: the person who made the loan made a mistake. The reason lendors are allowed to charge interest is so that they can asses the risk they will not be able to recover their investment in some cases -- these are those cases.
If someone can pay and chooses not to, that is a matter for the courts, so if a debt collector wishes to have the courts take money from these people they should have to prove they fall into this category.
Of course, this was a state that didn't require any reason to fire you. Sometimes folks could get unemployment afterwards, sometimes not.
Without a competing power structure to hold employers accountable and keep an eye on their behavior (i.e. a union) the law is a nice sentiment but not much more.
The debt company is gaming the system, but it's also ammoral so we should expect this sort of gaming. And perhaps appreciate it for exposing a bug in the rules of civil society, or what should be civil society.
The question is how do citizens react to this weakness in the system being exposed? Selfish individualism says, doesn't affect me, and that just allows more corruption, classism, and distrust. It illiberalizes society. It damages everyone's ability to trust, be trusted, have predictable and fair outcomes.
Yes the courts should be respected, but not by enacting disproportionate punishment for not showing up. The court still needs to be trusted. Why should only the court system, and the debtee be permitted to set the court date and time? Why not give deference to the accused to set the date and time within a 120 day window? It is more fair. Courts serve the people. And the business serves no one.
I also agree with the ACLU's remedies for adequate notification and burden of proof of debt.
I definitely agree with this.
>Lack of teaching empathy is an education issue.
I disagree here: we live in a hypercapitalist system. Empathy is a competitive disadvantage. Any company that exercises it is weak, and will be culled eventually by companies that don't. Lack of empathy, brutal selfishness and a willingness to exploit the weak are not a cultural problem, but a natural consequence of an economic structure: we cannot teach our children to be nice and hope that it will go away.
You are assuming awareness, proper service, etc. Not to mention assuming that someone can get off work to go. Faced with a choice between spending the day in court to challenge a $127 bill from five years ago or losing your current job for missing work what is the rational choice?
https://www.rollingstone.com/politics/news/matt-taibbi-court...
The FDCPA has some real protections! Some features:
* You can't contact someone other than the debtor (like their boss) and mention a debt. (You can only say that you're "trying to confirm X's phone number" etc.)
* You can't call after 9pm
* If the debtor asks to not be contacted in any channel other than mail, you must acquiesce immediately (though I think it needs to be in writing)
* If the debtor asks not to be contacted at work, you must respect that
The CFPB has a page on protections: https://www.consumerfinance.gov/ask-cfpb/category-debt-colle...
And wikipedia has more: https://en.wikipedia.org/wiki/Fair_Debt_Collection_Practices...
Of course that's expensive and only fixes it until the next sketchy business guy comes along...
This bias is unfortunate because our institutions do a good job protecting us and and safeguarding justice and order. By "good" I mean that most of the time these institutions do protect the common people.
I think much of this bias emerges for two reasons. First, as I said before, the news we hear is usually bad news. One can only hear so much bad news before developing negative bias. In a large nation like the USA with so many people, abuses of power are almost guaranteed to happen once in a while. It's critical that a free press report on these incidents to keep institutions honest, but an unfortunate side effect of this is negative bias against those same institutions that so often work well and protect us.
The second reason is that institutions do have power over us, and loom very large in our lives. In comparison to them, we are very small. This can be disconcerting and uncomfortable for some.
However there are many people, many people on HN who, if asked, would say that our institutions are fundamentally broken or, as a comment elsewhere on this post says, a "discriminatory clusterfuck".
My point is that this is a skewed and biased understanding of reality produced by constantly being fed negative news. Are our institutions perfect? Obviously not. Is there room for improvement? Of course! But do most people who interact with our institutions get treated fairly and according to the letter of the law, a law that itself is for the most part fair and just? I believe so.