The Truth of Credit

This link is to an article by Paul Bland that is a must-read if you are facing debt arbitration: Why the NAF Wants Courts to Lower the Burden of Proof on Debt Collectors  

After reading the article there were a few things that really stood out for me. For one thing, the fact that people hear the word arbitration and they get nervous. Secondly, how much of a problem it is for debt collectors to prove debts are owed and how much.

Now, obviously identity theft is a big problem.  Most companies have gotten a lot better about removing this type of debt much quicker. That’s not to say that they are not prone to human error and some may slip through. However, as it states in the article many “debt buyers” (meaning they buy the debt for pennies on the dollar) get bare-boned information:

In a great many (if not the vast majority) of cases, these “debt buyer” companies are actually mis-named. What they really buy from the credit card companies is a few bare-boned lines of account information. In most cases, debt buyers pay the credit card issuers to give them a list with three items: (a) the names of consumers who supposedly owe the credit card company money; (b) the account numbers of these consumers; and (c) a total figure supposedly owed (usually with little or no specifics as to the breakdown or components of that figure). These debt buyers typically have none of the records that a normal creditor would have (and would need, in court, to prove a case), such as a copy of a signed application for a credit card or copies of the monthly statements.

This is valuable information to you the debtor!!!

The TRUTH is that for most of these “arbitrations” the strategy is fairly simple: “Lets hope the defendant does not show up” . Word of note: You need to know who is filing this against you. If Bank of America is filing against you then more than likely you won’t have much of a defense outside of fraud. On the other hand, if its Joe’s Collection Service then more than likely they are going to have a hard time proving you owe the debt.

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