Wednesday, December 23, 2015

Creditors use debt collectors to help sue and then block counter-litigation to dispute claims, claiming "arbitration"


In a front page column “Beware the fine print: Making people pay” in the New York Times Wednesday, Jessica Silver-Greenberg and Michael Corkery report “creditors sue, then block use of courts to fight back” by applying “arbitration” clauses in contracts.



The result has been garnishment of bank accounts for old debts, some of which a consumer has forgotten or been unaware of.  There would be the risk that identity theft could set up a situation leading to the garnishments, since (as often written here before) there are not enough security safeguards in the system to verify the identity of people getting loans or to prevent information from being hacked.  The news story also reports that debt collectors have gotten away with collections from states in which they are not authorized to operate.

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