Zombie Debt Autopsy – continued

I wrote about zombie debt collectors last week.

But there is so much more to the horror!

If you can stomach it, the complete CFPB (Consumer Protection Finance Bureau) consent order against zombie debt collectors is here.

As lawyers, we only know what our clients tell us.

We have a duty to investigate, reasonably, especially in federal court.

And bankruptcy court is a federal court.

Not so much in state court, where zombie debt collection lawsuits are filed.

So, what did our zombie friends give to their attorneys”

From the order:

43. Encore collects disputed Debt itself and also assigns disputed Debt to law

firms and third-party Debt collectors. In numerous instances, Encore has assigned disputed Debt to law firms and third-party Debt collectors without informing them that the Debt is disputed and without forwarding correspondence it has received from Consumers in support of their disputes. As a result, law firms evaluating Encore accounts for litigation did not know which accounts are disputed, and disputing Consumers have been forced to re-start the dispute process each time Encore transfers a Debt.

What this means is, you may have given the original creditor, and/or the zombie debt collector, evidence, even proof, that the debt was paid or otherwise not owed by you.

But the attorneys suing you do not have that information.

Which will be a defense to the lawsuit.

TALK TO A LAWYER WHEN YOU GET SUED.

Still more:

48. Encore has filed hundreds of thousands of lawsuits to collect Consumer Debt. Most of the Consumers sued by Encore are not represented by counsel. Encore has placed tens of thousands of accounts with law firms staffed by fewer than ten attorneys.

For example, Encore placed over 100,000 accounts with Frederick J. Hanna and Associates, while that firm employed 16 attorneys. Encore has encouraged these law firms to file lawsuits on a large percentage of accounts, prohibited them from contacting previous owners of the Debt for account-level documentation, and discouraged them from requesting account-level documentation Encore did not deem necessary to settle a case or obtain a judgment.

Obviously, what is happening is robo-signing of lawsuits. No attorney is even reviewing many of these lawsuits.

Not that their client ever gave them anything substantive to review.

50. When deciding whether to threaten or file suit, Encore’s law firms have not known if a Debt seller has specifically disclaimed the accuracy of information in the data file, has notified Encore that documentation is unavailable or has notified Encore that a

number of accounts in a portfolio are disputed or barred by the applicable statute of limitations. Law firms also have not known if the Consumer had disputed the Debt with Encore or provided detailed letters or documentary evidence questioning the validity of Encore’s claim.

Again, possible defenses to the lawsuit, that YOU may have.

I have only touched the tip of the iceberg, lots more in the 63 page consent order.