Advertisement

Judge Stymies Debt Collectors; Stays 3,878 More Cases

[caption id="attachment_11143" align="alignleft" width="300" caption="Sign of the times?"]

[/caption] Maryland Chief District Court Judge Ben C. Clyburn has issued a "stay" on 3,878 debt collection cases brought by two debt collection companies whose business licenses have been suspended, according to a press release from the District Court. "The District Court is requiring court records and the Judiciary Case Search public records website be updated to show the stays," according to the release. "For more information, Maryland residents should contact the local District Court location where the debt collection case was filed." The Maryland Commissioner of Financial Regulation suspended the licenses of two companies—LVNV Funding, LLC, and Resurgent Capital Services—on Oct. 28. According to the Summary Order to Cease and Desist and Summary Suspension of Collection Agency Licenses, issued by the

Advertisement

, these companies filed more than 27,000 cases, "the majority of which were filed prior to the respondents obtaining proper licensing. Additional violations include, but are not limited to, the following:

  1. ckquote>
  2. Knowingly filing false, deceptive or deficient affidavits with regard to the affiant's personal knowledge of the consumer's claim;
  3. Intentionally misrepresenting the amount of the consumer claims and collecting impermissible compound interest;
  4. Knowingly collecting unauthorized attorney's fees and prejudgment interest at unauthorized rates; and
  5. Filing cases which the relevant assignment documents evidence that LVNV did not have valid title of the consumer claims at issue."

For the past year or so, Judge Clyburn has been hammering shady debt collectors, throwing out judgments that had been granted against people who never knew they were being sued, often for alleged debts that were little more than numbers printed on a page. The

Sun'

s Jamie Smith Hopkins

. At the time, the Maryland Court of Appeals was fixing to implement new rules that would require debt collectors to show the judge actual proof of the debt—basically the same standard that applies nationally to collectors trying to dun people. The problem is this law has been seldom followed by debt buyers, who typically purchase huge books of alleged debts—many of them a decade old or more—for pennies on the dollar and then try to collect. As Hopkins wrote: "Consumer attorneys, regulators and other officials—here and elsewhere—say these are not minor matters. Consumers, they say, have been sued twice on the same debt by different debt buyers. They've been sued on debts discharged through bankruptcy. They've been sued on debts they'd already paid off. And some have been sued for debts incurred by other people with similar names." The new rules were adopted in September.  As W. Thomas Lawrie, an assistant attorney general for Maryland,

, "It appears this robo-signing has been going on at some companies in this industry for years." Judge Clyburn, meanwhile,

. Times appear to be a-changin'.

Advertisement
Advertisement