What could possibly go wrong? After all, it's not as if creditors ever make mistakes, or claim you owe them a lot more than you actually do. So it would never be abused by the legal system, right?
Arizona Gov. Jan Brewer has approved legislation making it easier for debt collectors to go after defaulting consumers and small businesses.
Brewer signed House Bill 2664 into law today. The measure allows collection agencies to use final billing statements as a basis to show amounts owed and interest rates as they seek court judgments and wage garnishments.
The bill was favored by debt collectors, which buy delinquent accounts from banks and credit card companies for pennies on the dollar, but receive only minimal information from those sources. It can be difficult and expensive for the collection companies to get additional information on the defaulting consumers and business owners.
Debt collectors’ business model depends on them collecting money from the account holders whose information they buy. The new state law makes it easier on them if they can obtain final billing statements from the banks and credit card issuers.
This law seems uncomfortably close to the kind of legal by-step that allowed banks to foreclosure on homes to which they didn't hold an actual title, but MERS stated they did:
The language in this bill — primarily, but unofficially, known as the Credit Card Responsibility Bill — that pertains to collection agencies is this:
“In an uncontested court action in this state a creditor may establish the amount of the debt that is owed on a credit card account through a copy of the issuer’s final billing statement or by the electronic record pursuant to section 44-7007 that is maintained by the issuer and that represents the amount owed. In contested actions the court shall weigh the evidence of the parties as required by law.”
Well yes, theoretically, the courts would weigh evidence. But as we saw in the Florida foreclosure courts, judges simply rubber-stamped the bank requests, no matter how egregious or poorly documented their claims. So I wouldn't count on it.
