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Judge rules state can't block debt collectors from calling and suing people just because we're in a state of emergency
By adamg on Thu, 05/07/2020 - 1:43pm
A federal judge yesterday issued a temporary restraining order that will block state regulations that prohibited debt collectors from calling people to pay up and from then suing them if they don't, at least until the case is argued in more detail.
Acting on a lawsuit by an association of debt collectors, US District Court Judge Richard Stearns says the regulations promulgated by state Attorney General Maura Healey violate the debt collectors' First Amendment rights, both to call people and to petition government, via lawsuits filed in courts and that a pandemic is not reason enough to trample those rights.
In his ruling, Stearns wrote that federal and state law already prohibits debt collectors from calling somebody more than twice a week and that in this age of technology-based phones, he finds it hard to believe that people who don't want to get such calls wouldn't know how to look at the incoming number and either block it or just not answer.
And, he continued, no matter your feelings about debt collectors, blocking them from trying to collect would most harm "hospitals and utilities who depend on collection agencies to remain solvent." And besides, who is Maura Healey to try to interfere with the capitalist system?
Finally, the court recognizes the argument advanced by [the debt collectors] that a capitalist society has a vested interest in the efficient functioning of the credit market which depends in no small degree on the ability to collect debts.
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Comments
Agree and disagree
The reasoning based on, "hospitals and utilities who depend on collection agencies to remain solvent" is insane. Any profit or non-profit that can go insolvent because it can't collect all the debts deserves to be insolvent. That is a diseased business plan.
Debts need to be secondary to the profits.
However, unfortunately there is no reason to prohibit collections since phone calls and dunning notices do not involve potential exposure to a fatal disease.
On the other hand, if hospital finances could be harmed by a temporary cessation of bill collecting then that is yet more evidence that our system of providing health care is itself bankrupt.
If a debt is in collection, a
If a debt is in collection, a third party debt collector has bought it from the hospital already.
Sure, eventually debt predators will hesitate to buy debts from hospitals, but a two month pause won't kill them. This is bollix.
BS
I've fought so many bill collectors in my time.. and I've realized a few things.
If your account is current, and you're OK, you'll never hear from a debt collector. (1st run collection)
If your account is past due and closed, you'll hear from a debt collector (2nd run collection)
If your account now is closed, and has been *sold* to a collections agency (3rd run collection)
If you still have not paid, and the above agency could not collect, it's sold again.. (4th run)
Let me be VERY clear here.. the only people who ever get the full amount are the 1st run. From that point on, the company takes a loss on it or passes it on to you as 'fees'. Your debt gets sold and then sold again. Sometimes for pennies on the dollar.
Years ago i had a credit card I defaulted on.. was 500 bucks total. Collections tried to get me for 1800 in fees. I did exactly what the AG said to do at the time (negotiate), and I realized they bought the account from someone else (who bought it from the card company when I defaulted) for about 20 cents on the dollar. This means that debt was sold for 100 bucks (if debt was 500), 360 bucks for 1800. At this point, any $$ they collect is just profit. The originally debtor has since wrote it off as a loss.
This is literally a crap ruling in favor of slimey debt collection. I'd see their point as a 1st run collection, but the rest.. 2nd up are just almost all profit driven. There's no need for these folks to continue. None.
(I'll also add that mostly by the time it gets to 3rd or 4th collection, its an attorney's office usually.. amazingly what they will do to keep business, like fight this to continue to collect. Its easy collection, send a 'constable' to your house and scare someone into writing a check... it almost worked for me, until I read the law..)
pay your bills
The fact that they paid 20 cents on the dollar means nothing other than what the market value of your creditworthiness is (its not worth much)
Justice today
Well, if you’re broke and can’t pay up, at least you can buy guns.