NEW YORK — In the first-ever report on the extent and impact of cooperation between courts and the private debt collection industry nationwide, the American Civil Liberties Union found courts in 26 states and Puerto Rico in which judges issued arrest warrants for alleged debtors at the request of private debt collectors.

This practice violates the many state and federal laws as well as international human rights standards that prohibit the jailing of debtors. It worsens their financial struggles by subjecting them to court appearances, arrest warrants that appear on background checks, and jail time that interfere with their wages, their jobs, their ability to find housing, and more.

“The private debt collection industry uses prosecutors and judges as weapons against millions of Americans who can’t afford to pay their bills,” said Jennifer Turner, author of “A Pound of Flesh: The Criminalization of Private Debt,” and principal human rights researcher at the ACLU. “Consumers have little chance of justice when our courts take the debt collector’s side in almost every case — even to the point of ordering people jailed until they pay up.”

An estimated one in three adults in the United States has a debt that has been turned over to a private collection company, according to the Urban Institute. More than 6,000 of these companies operate in the U.S. At the bidding of the private debt collection industry, courts issue tens of thousands of arrest warrants every year when people don’t appear in court to deal with unpaid civil debt judgments.

“They had a warrant for my arrest and I asked them for what, he didn’t say what it was for. He said, ‘He’ll tell you later,’” recalled Tracie Mozie of Dickinson, Texas. Two armed U.S. marshals had entered her bedroom in 2014 to arrest her for failing to appear in court over a $1,500 federal student loan she took out in 1986 to pay for truck driving school. The loan had grown to more than $13,000 with interest and fees, an amount Mozie can’t afford because she is unemployed and subsists on disability benefits. She has a prosthetic leg that she wasn’t wearing, but the marshals shackled her feet and waist after she put it on. She was jailed overnight. “I’m scared someone is going to come to my door and get me again.”

“A Pound of Flesh” includes dozens of stories of people who, like Mozie, have been jailed or threatened with jail by the debt collection industry with help from prosecutors and judges, including:

A mother of three in Indiana was jailed for missing hearings over medical bills for her cancer treatment. She was physically unable to climb the stairs to the women’s section of the jail, so she was held in a men’s mental health unit.

A Georgia woman was arrested while caring for her terminally ill mother. A debt collection company had bought a 6-year-old rental debt her landlord claimed she owed after evicting her from her trailer home. She was jailed overnight. Her mother died two days later.

In Missouri, a single mother of a toddler took out a high-interest payday loan of $425. She wasn’t able to pay it back, and the creditor sued. She didn’t go to court and was arrested and jailed for three days.

A Utah man committed suicide while jailed for failing to appear in court over an unpaid ambulance bill. He killed himself shortly after he was asked whether he had the money to post bail.

“The tyranny of the private debt collection industry causes financial ruin for people already struggling to make ends meet, and courts are willing to routinely violate people’s due process rights to do debt collectors’ dirty work,” said Turner. “Our courts have become mills for these companies, approving without evaluating scores of arrest warrants, wage garnishments, property seizures, default judgments, and other legal actions against consumers accused by debt collectors of owing money.”

By analyzing more than 1,000 cases in which judges issued arrest warrants for alleged debtors, the ACLU identified the particular ways that the courts enable the debt collection industry to coerce alleged debtors to pay up, even when there’s no evidence the debt is owed or when the person isn’t legally required to pay. For example, many judges issue the requested warrants without checking whether the person has the ability to pay.

More than 90 percent of consumer debt litigation ends with a default judgment in favor of the debt collection company because the defendant didn’t contest the case. Most don’t appear in court to defend themselves, often because they don’t know how or because they never received notice of the suit.

“The debt collection industry’s exploitation of the courts and law enforcement impact Black and Latino people most harshly because of longstanding gaps in poverty and wealth,” said Turner. “The impact of predatory debt collection practices falls most heavily on minority communities, who often lack the savings, financial assets, or inherited wealth to avoid financial disaster. And some studies show there are marked racial disparities in which communities debt collectors choose to target for lawsuits.”

The report also documents arrangements between debt collection companies specializing in bounced checks and more than 200 district attorneys’ offices. The offices allow the companies to use the district attorneys’ letterhead and official seals to send consumers letters threatening legal action. These letters often falsely claim that a person will be prosecuted and jailed for up to a year, when the amount owed is too low to meet the standard for prosecution in that jurisdiction. The bounced check collection companies pay district attorneys’ offices a portion of the fees they charge the consumers who receive the letters.

“We must stop the suffering and injustice caused by the private debt collection industry’s cozy relationship with law enforcement and the courts,” said Turner. “Almost all of the people targeted by debt collectors can’t afford attorneys. The right to counsel often doesn’t apply in such cases, but it should. A lawyer can make all the difference when people are facing powerful debt collectors in league with prosecutors and judges.”

“A Pound of Flesh” includes recommendations for legislation, changes in court rules, actions by attorneys general, reforms for district attorneys’ offices, and other ways to stop law enforcement and the courts from helping the private debt industry abuse consumers. They include but aren’t limited to legislation that prohibits courts from issuing arrest warrants in debt collection proceedings as well as laws that ensure that people aren’t jailed in cases to collect debts they haven’t been notified about, can’t pay, or aren’t legally obligated to pay.

For the full report:

https://www.aclu.org/issues/mass-incarceration/privatization-criminal-justice/pound-flesh

For information about the ACLU’s Human Rights Program:

https://www.aclu.org/issues/human-rights