HOWTO send vulture debt collectors packing

"Defending Junk-Debt-Buyer Lawsuits" is a paper written by Peter A. Holland of the University of Maryland Francis King Carey School of Law and published in the May 1 issue of Clearinghouse Review. It's a clear, short, absolutely readable (and indispensable) guide to fending off speculative lawsuits from vulture debt-collectors. These are the debt collectors who buy up bad debts that banks and other creditors have written off (because there's insufficient evidence that the debt exists in the first place, or because it's past the statute of limitations, or because the debtor has been through a bankruptcy). Then they bulk-file lawsuits against the debtors, hoping that they won't show up in court to defend themselves, so that the vultures can win judgments and use them to go after houses, cars, salaries and so on. As Naked Capitalism's Yves Smith puts it, these vultures are buying up a lot of scrap paper, hoping to find a lottery ticket.

It's surprisingly easy to fend off these bottom-dwellers, though. They have to prove that you owe them money. A brief moment spent scrutinizing the documents filed against you is usually enough to find evidence that will get the case dismissed. Holland's paper explains in detail just what to do to get these vampires to flee from your door:

Read the complaint and accompanying
documents multiple times, highlighter
in hand, while looking for intentional
deceptions, errors, and omissions that
could help your client prevail. First, look
for defects on the face of the complaint.
For example, the named plaintiff might
be a different corporation from the entity named in the supporting documents.
This occurs with surprising frequency.
Second, if your state requires debt buyers to be licensed as debt collectors,
check whether the debt buyer is licensed.
Suing without a license creates standing
issues, and, according to an increasing
number of courts, it constitutes a violation of the Fair Debt Collection Practices
Act.16 The junk-debt buyer is subject to
the Fair Debt Collection Practices Act
because the junk-debt buyer allegedly
acquires the debt after default.

Third, look for the failure to prove the
existence of (or the terms and conditions
of) the alleged underlying contract. Failure to prove the contract is the rule rather than the exception. Often a contract is
not even attached to the complaint. More
often, some well-worn photocopy sample of a terms-and-conditions mailer is
attached. This sample is often illegible,
and almost never signed by the consumer. On close inspection, the printing date
on this document often reveals that it was
generated years after the account was allegedly opened. Also, the terms and con-
ditions submitted may not be from the
original creditor identified by the junk-debt buyer but are presented to make the
claim appear supported.

Fourth, the debt buyer is usually unable
to prove a complete and unbroken chain
of title. Without a valid chain of title, the
debt buyer does not have standing to sue.