North Huntingdon, PA (PressExposure) March 26, 2011 -- Century Negotiations, Inc. (CNI) executives are applauding a recent court decision requiring debt buyers to provide more information before filing lawsuits against debtors.
The additional information includes the names of the debts' previous owners, the dates they were assigned the debts, and the amount paid by the debt buyer. A court ruled that this information is needed to ensure the debt buyer has the right to sue the debtor. Previously, only minimal information was needed for debt buyers to begin lawsuit proceedings.
"This decision is one of several that demonstrate a positive trend in the debt buying and debt collection industries," said Amy Michalo-Rojas in reaction to the Illinois court's ruling.
This decision comes on the heels of the Consumers Union report, "Past Due: Why Debt Collection Practices and the Debt Buying Industry Need Reform Now," released in January. According to the report: "There is a massive industry buying and selling large portfolios of debt for pennies on the dollar, and a court system in which debt collectors are able to get court judgments without proof that they own the debt or even that the consumer owes any debt." The report includes real stories of blatant debt collection abuse, statistics, and policy recommendations.
But the Illinois court ruling is evidence that states are taking abuses into their own hands, as was suggested by the Federal Trade Commission in a 2010 report. In that report, the FTC called the debt collection industry "broken" and urged states to enact more consumer protections in litigation.
"Basic consumer protections are in the best interest of the industry as well as the debtors," said Michalo-Rojas. "Innocent consumers will be protected from undeserved lawsuits, and debt buyers could benefit from an improved reputation and possibly higher returns by pursuing only legitimate debts."
For more information about the FTC's report, "Repairing a Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration," visit FTC.org.