Urban Lawyer

Employing the Prima Facie Standard in Third Party Debt Collection Default Judgments

by William Joseph Bearden

William Joseph Bearden is a J.D. Candidate, University of Missouri-Kansas City School of Law, 2017. I would like to thank Hannah Dalbey, Professor Julie Cheslik, and Professor Judy Popper for their editorial assistance. Thanks also to the attorneys and judges on whose insight and expertise this article is based. Finally, thanks to my parents and my wife for their never ending help and love.

The courts provide an important fallback venue for recovery of delinquent consumer debt accounts, but the current state of the litigation process as employed by debt buying plaintiffs, especially large corporate plaintiffs, can amount to a threat to the civil rights of debtor-defendants, especially the elderly, indigent, or unsophisticated.1 Current practice not only threatens the debtors, it also poses significant danger for the debt buyers themselves and their attorneys.

Courts and attorneys face a difficult challenge when attempting to balance the rights of plaintiffs to collect on overdue accounts with the interest of defendants to have the evidence against them weighed fairly, especially courts already clogged with litigation in front of judges unfamiliar with the mechanisms of the debt buying industry.2 Delinquent accounts are often purchased by the thousands in bundles for an average of four percent of the balance of the accounts, and because the vast majority of judgments are collected by default, the buyer may receive only scant details concerning the account.3 Usually a single line in a massive database ties the account to a complex sale contract in lieu of any paperwork that might prove the debt.4 This makes it difficult for the plaintiff ’s attorney to prove the assignment of the debt, much less the allegations of the complaint.5 This difficulty is exacerbated exponentially when the debt changes hands a second or third time, and debt buyers may struggle to piece together the account and collection history when key information may simply not be available.6 As individual civil dockets commonly list dozens or even more than a hundred third-party debt collection cases, hundreds or thousands of third-party debt collection cases are filed in any given county every year. These cases usually account for a significant percentage of cases within any given jurisdiction, and minorities are disproportionately affected.7 At the heart of the issue are the default judgments that conclude the vast majority of cases. These default judgments provide a strong incentive for the industry status quo without regard to questions of justice, professional ethics, judicial efficiency, or social policy.

This article will first examine the common practices of the debt collection industry and the related issues that plague the courts and society as a result. It will then propose a simple solution, already in place in at least one jurisdiction, and explore how, if more widely implemented, this solution would protect debt buyers, their attorneys, and defendants alike at the cost of improved record keeping on the part of debt sellers. Part I will briefly outline the prima facie case for actions brought by debt buyers against debtors and outline the facts that must be alleged and demonstrated in order to prevail on a contract or account stated action. Part II will explore the actual practices of many courts when met with these suits, how these practices generate vast numbers of default judgments, and how industry practices take advantage of this phenomenon. Part III will discuss consequences of these practices for debt buyers, and for their attorneys. Part IV will turn to the consequences for defendants, their attorneys, and the courts. Part V will analyze how a simple change in how courts grant default judgments in these matters would cause an industry change alleviating or reducing many of these issues. Part VI will explore approaches to implementing this proposal at various levels. This article focuses on changes in Missouri courts as informed by other states, but the proposal could be applied widely for greater effect.

I.  The Prima Facie Case for Debt Buyer Collection Actions

Debt buyers filing collection actions need to be able to prove four things in order to rightly collect on a debt: (1) there is a debt to be collected, (2) they are the correct party in interest to collect the debt, (3) the defendant named and served is in fact the debtor, and (4) the amount that they are attempting to collect has been correctly calculated.8 Generally, before filing a petition, a plaintiff ’s attorney must be reasonably sure of each of these elements based on a reasonable inquiry.9 Since a default judgment will often be entered without the opportunity for a plaintiff to conduct discovery on the defendant, a plaintiff should be prepared to provide documentation supporting the allegation.

A.     Demonstrating the Validity of the Debt

Debt buyer collection petitions are usually based upon one or more of four basic causes of action: suit on open account, breach of contract, account stated, or money had and received.10 A collector can only prevail on causes as stated in the pleadings, because a defendant has a right to know what the claim is in order to mount a defense against a cause of action before a ruling is made.11 In an ideal world, plaintiffs would not have difficulty substantiating each of these causes of action with different documentary evidence or testimony.

1.  Evidence for Open Account

Open account may be the most difficult theory for a plaintiff to demonstrate, because it requires a detailed accounting of each charge and payment resulting in the amount pled.12 Originally used as recourse for merchants or laborers holding unpaid tabs for customers, this cause of action traditionally excludes accounts that have a contractual basis, and therefore may technically be unavailable in credit card cases and most other debt buyer collection actions.13 Even where open account is employed, the extreme difficulty for a debt buyer in obtaining a complete accounting can make it practically impossible to even begin to demonstrate this cause of action.

2.  Evidence for Breach of Contract

To prevail on a breach of contract claim, the plaintiff must prove that the defendant agreed both to the contract and to the terms of the contract.14 When the contract is an open-ended credit agreement, the plaintiff has the additional difficulty of proving the amount due.15 Neither the amount due nor the contract alone is proof of the other,16 but other means can be used to prove assent to a contract.17 For example, if a plaintiff can prove that a defendant used a credit card, even by producing a check that the defendant used to make a payment on the account, this proof can be sufficient that the defendant used the account.18

Regardless of the theory of the collection action, unless the debt buyer can produce a valid contract, choice of law provisions cannot be presumed under contract law, and the law of the forum in which the suit has been brought applies.19 Another advantage for the debt buyer that can prove a contract is that the debt buyer is allowed to collect interest at the contractual rate for the period after the last account statement, an option that is not be available to the debt buyer who cannot demonstrate a contract.20

3.  Evidence for Account Stated

Under the account stated theory, an agreement between debtor and creditor is demonstrated by “prior transactions between the parties to an open account.”21 This requires (1) demonstration of mutual assent about the correct balance, (2) a promise to pay, and (3) a previous relationship.22 In practice, this theory is employed when the contract is unavailable, but the plaintiff can demonstrate that the defendant was sent an account statement and either made a payment or, as applied by some courts, at least did not raise an objection within some timeframe after receiving the statement.23 Essentially, the plaintiff can sometimes use silence to demonstrate both assent to the balance and a promise to pay.24 A more detailed exploration of implied consent is beyond the scope of this article, but represents a rich field for elaboration within consumer debt studies.

The account stated cause of action is not viable in all states, as some states, like Pennsylvania,25 Vermont,26 Wisconsin,27 and New York28 have laws or case law that severely restrict creditors’ ability to collect on an account stated basis. On the other hand, at least one state, Texas, allows a variation on account stated called “sworn account,” which considers a creditor’s sworn affidavit to serve as prima facie evidence of the debt unless the defendant timely files an objection under oath.29 Sworn Account cannot be used as a cause of action to pursue credit card accounts.30

4.  Evidence for Money Had & Received

Money had and received is another traditional cause of action still available in some states, including California.31 This theory requires that money was given to the defendant as a loan, and was never repaid.32 Jurisdictions vary on the availability of this cause of action; some states require a contract,33 while other states, including California, indicate that this cause of action is not for use when a contract is implicated.34 In some cases, this cause of action requires the defendant to have made a fraudulent statement in order to receive the money.35 In other states, this claim blurs into something more like an unjust enrichment claim.36

B.  Demonstrating the Standing of a Debt Buyer

One of the greatest difficulties facing debt buyers when attempting to collect in court is proving they are the proper party in interest. Different collection strategies require different infrastructure for the collector to succeed, so accounts change hands several times as different approaches are implemented and fail.37 Because litigation is one of the most specialized and costly approaches to recovery, it is often rightly viewed as a last resort.38 The result is that by the time an account arrives in the hands of a buyer specialized in bringing an account before the court, the account often will have been sold several times.39 Each of these transactions is important, however, and for a buyer to legitimately claim ownership of a debt, the buyer must be able to document each step in the chain of assignment.40 Unlike real estate, however, there is no central registrar for ownership of debt, and unlike personal property, ownership is conceptual and there is no recourse to possession.41 Additionally, in some jurisdictions, the buyer bears the responsibility of demonstrating that the account has not passed the statute of limitations for litigation.42 The passing of a complete and growing set of documentation from each seller to each buyer and ultimately the presentation of these documents to the court is the ideal solution.

Demonstrating that the person targeted by a collection action is the correct debtor should be one of the more straightforward tasks of the collector’s attorney. Since most debts purchased originate from a credit application or contract of some kind, a buyer who has received this documentation would also possess information that could be used to accurately trace the debtor, even where the debtor has moved since the application was made.43 In cases where the defendant appears in court, the defendant can raise an objection if it is not the proper party. An issue arises, however, if defendant is unable to appear in court or is not properly served, preventing an appearance. Where a default judgment is sought, but the court has not seen proof that the defendant is in fact the person who incurred the debt, the court is unable to enter a proper judgment.44

C.  Verifying Damages Calculations

Certifying to the court that the amount a debt buyer is requesting is the actual amount owed on a debt may be the most challenging aspect of a collection action. Particularly on credit card accounts originating in the previous decade, complex, fluctuating interest rates and tiered fee structures create a complex calculation for creditors seeking to determine the current value of a debt.45 Coupled with a lack of access to the sophisticated software used by banks and credit unions, the creditor who buys debt may find it nearly impossible to determine what rates apply, especially after the date the original creditor officially gave up on the account, a process called a “charge off.”46 Even if debt buyers resign themselves to attempting to collect only the amount due on the charge off date, the buyer must take into account any payments made to intermediate collection agencies that may have held the account in the interim. Therefore complete records of the original terms of agreements and full accountings of any payments made on accounts since charge off must be compiled by a plaintiff seeking to litigate.

II.  Current Practice in Awarding Default Judgments

Current common court practices often result in a practical presumption that the plaintiff has a right to collect, often without even providing any evidence that the debt is valid and the plaintiff is the legitimate holder of the debt.47 This nearly complete absence of any burden of proof on plaintiff has allowed practices to flourish in the debt buying industry that may support a lackadaisical approach to litigation, but can stymie a debt buyer who is attempting to gather evidence necessary to legitimately prove their case.48 Since 90% of defendants in these cases typically do not appear to defend themselves,49 plaintiffs do not usually have much motivation to prepare their cases well before filing. Even the debt buying contract presents several obstacles to the collector. Typically, this contract is spread over three parts. The sale agreement discusses the composition of the portfolio of consumer debts that the seller will prepare for the buyer, including particulars of geographic distribution, age of debt, and status of the debtor.50 This agreement will usually allow the buyer to request documentation of ten to twenty-five percent of the debts the portfolio will contain, with the remainder to be purchased for a fee when they are available.51 This is the major part of the contract, but it includes no information about the specific debts that are to be sold.52 This is followed later, at the agreed-upon time, by a series of bills of sale and data files.53 The bill of sale refers to a specific part of the sale agreement that each particular set of accounts satisfies, while the data file includes specific information about each account, often as a single line in a database.54 These data files are usually immense, containing personal information about thousands of debtors.55 The information provided by the seller concerning each individual account, however, may be critically incomplete. Further, the sale agreement often limits what records buyers can request of the seller, both in terms of which documents the seller will provide for any given accounts and a total percentage of accounts for which those records will be provided on request.56 This practice results, in many cases, in a situation where a debt buyer can provide evidence of the account and assignment in only a small percentage of the accounts purchased.57

To compensate for this lack of information about each debt/ account, the debt buyer may be forced to present an affidavit to the court stating that certain records cannot be produced due to industry practice.58 Unfortunately, this puts the court in the position of either denying a legitimate debt buyer’s claim, or finding against a defendant who is not allowed to repudiate the claim against it.59 Alternatively, the debt buyer will produce a “data strip,” which is a line from its own internal records meant to emulate the information from the data file.60 This approach protects the information of the rest of the debtors recorded in the data file, which constitutes an integral part of the sale contract, and also serves the purpose of hiding information about the buyer’s business practice, protecting the debt buyer both from competitors and defense attorneys who may wish to make a case under various consumer protection statutes.61 Neither approach to documenting the debt is sufficient to demonstrate standing, because without the sale agreement, the data file, and the bill of sale, a plaintiff cannot present the court with a complete contract.62 The parole evidence rule precludes either the data strip (because a business record of the buyer cannot substitute for the actual data file integrated into the contract) or an affidavit stating that part of the contract is unavailable.63 If anything, such an affidavit multiplies a plaintiff ’s problems by demonstrating that the plaintiff cannot prove he has standing.

Plaintiffs’ attorneys are faced with large caseloads and the knowledge that they will only be granted account records on a percentage of the cases they bring. They also know that a large percentage of those debtors will default in court. They may be pressured to file suit without having access to the evidence they will need to prove their case since they will only need to provide account records on cases where the defendant actually appears.64 Blind filing does create a situation where plaintiffs’ attorneys are alleging facts to the court that they have not researched through their petitions, and debt buyers are attesting through affidavits to facts of which they have no personal knowledge.65 Lack of these records may undermine a collector’s ability to prove standing or formulate an accurate calculation of an amount owed.66

III.  Consequences for Debt Buyers and Collection Attorneys

When collection attorneys brings claims on behalf of debt buyers, the affidavits from the debt buyers may be the only documents they have seen relating to the case before the petition or complaint is filed; the debt buyers themselves may not have any right to access any of the original documentation of the debts.67 The affiants, who are usually officers of the debt buying corporations and not of the original creditors, may not have access to the original documentation of the debts, including contracts and account statements. The only basis the affiants may have to believe that the amount is due to the debt buyers from the defendant may be the contracts of assignment.68 In fact, many debt buying contracts explicitly disallow the buyers to request the original documentation of the debt, including a clause that reads, “No Media Requests: Buyer understands that Seller will not provide Buyer with any documentation relating to an Account, including applications, agreements, billing statements, correspondence, etc.”69 In fact, even if the original creditors wanted to provide these documents, they likely would be unable to do so in that it is common practice to destroy these documents after five or seven years, which is often before third-party debt-collection suits begin.70 This unavailability of the original documentation puts the attorneys filing these cases in a questionable position, since the attorneys will have no way to check, much less verify, that the claims filed with the court are accurate or supported by fact and the Rules of Civil Procedure require the attorneys to have basis in fact for the suit.71

Further, without the originating documents, debt buyers may be completely unable to prevail on breach of contract claims, leaving both the debt buyers and their attorneys open to abuse of process or Fair Debt Collection Practices Act (“FDCPA”) claims by defendants.72 Documents are equally necessary in money had and received, accounts stated, and open account cases. The result is that attorneys for debt buyers are often forced to skirt court processes and prevail on legal gambits such as default judgments. When defendants can afford to hire legal counsel, plaintiffs simply dismiss and, since the vast majority of defendants will default, the business model remains spectacularly profitable.73

The process is not, however, without hazards for debt buyers. Courts and juries are cracking down on debt collectors who are not scrupulous in their claims. In May of 2015, for example, a Kansas City, Missouri jury awarded defendant Maria Mejia eighty-two million dollars in punitive damages against Portfolio Recovery Associates after the debt buyer sued her for a debt that was not hers.74 Other awards against debt buying plaintiffs are not as spectacular as Mejia’s. For example, in a similar case in southern Missouri, defendant Marcia Watson was awarded just over ten thousand dollars after plaintiff Portfolio Recovery Associates was found in contempt of court for failure to comply with the court’s discovery order.75 Perhaps most damaging, however, was the Consumer Financial Protection Bureau’s recent ruling ordering Portfolio Recovery Associates and Encore, the two largest debt buyers in the nation, to stop collection on debts totaling around $128 million and to pay refunds and penalties totaling $79 million dollars.76 As stiff as these penalties against debt buyers may seem, however, they pale in comparison with the billions of dollars of debt each of these top two debt buyers acquires each year.77 Occasional penalties on this order of magnitude do not appear to have deterred the largest debt buyers from the practice of seeking default judgments.

IV.   Consequences for Debtors, Defense Attorneys, and the Courts

Difficulties faced by defendants pose even greater public policy concerns. Due to the nature of the litigation, many defendants are either relatively unsophisticated or cursorily assume they owe the debt.78 Especially among older generations, a desire to always pay debts may lead defendants to the hasty assumption that the debt is legitimate, without understanding that the plaintiff may not have accurate information about the debt in question.79 If the defendant seeks legal counsel, the cost is often prohibitive, considering the suit in question may concern an amount of only a few hundred dollars, and legal expenses will quickly exceed this amount.80 Even when a debt buyer is shown to have violated state or federal law, recovering damages and attorney fees can be difficult for defendants, lessening the effectiveness of fee-shifting statutes intended to help deter abuses.81 If a defendant tries to fight the suit pro se, most have no knowledge of court processes, and lack the tools to plead defenses or require the plaintiff to provide proof of the debt.82 In many cases, the defendant is afraid of court and will attempt to hide from court proceedings by simply not showing up.83 Many are afraid of losing their job if they take time off to go to court.84 Of course, missing court can result in a default judgement.85 The result is that a high percentage of judgments in debt buyer collection cases are from default judgments on accounts that would not survive trial.86 Most sources believe this rate to be somewhere near ninety percent,87 and plaintiffs often prevail without providing any evidence at all.88

Even when a defendant has the wherewithal to hire an attorney, the attorney will face unusual difficulties due to the way courts currently handle these cases.89 One particularly byzantine quandary emerges due to a technicality of civil procedure. Since one of two central issues a defense attorney commonly needs to raise is the plaintiff ’s lack of standing, examining this issue early, before either party has incurred major costs, would be the intuitive strategy. Theoretically, standing should be one of the most powerful questions available to defendants, since courts have a duty to examine standing, and parties cannot waive standing.90 When a defense attorney raises standing on a pre-trial motion, however, the correlated plaintiff ’s strategy is to claim that the plaintiff must be allowed an opportunity to demonstrate standing at trial, even when relevant discovery requests have gone unanswered.91

Even more convoluted is a plaintiff ’s tactic of asking the court to apply the summary judgment standard to the question of standing. When a defendant moves for summary judgment (and seeks related damages) on the ground that the plaintiff has brought suit without standing, plaintiff can oppose entry of summary judgment on defendant’s claim by arguing that judgment cannot be entered where standing has not been demonstrated.92 This tactic leaves defense attorneys in the bizarre position of having to prove standing on behalf of the plaintiff in order to prevail.93 The only recourse available to the defendant is to seek dismissal without prejudice and then bring a separate suit against the plaintiff.94 For consumer attorneys, who often run small firms on a tight budget, the extra litigation cost of this separate suit can be sufficiently significant to deter private attorneys general actions, which were intended by Congress through the FDCPA.95

Civil dockets are bloated by the effects of the debt buying litigation industry. Since the current prevailing model in the industry relies on filing lawsuits in quantity to harvest as many default judgments as possible, the most successful industry participants are those who can file the most lawsuits.96 Though exact numbers are not available, one study of Texas state courts in Dallas indicates that debt buyers initiate perhaps one-third of debt collection cases, which in turn account for approximately three-fourths of civil actions.97 If that estimate applies to Kansas, for example, where approximately three-fourths of civil cases are also brought on collections, about a quarter of all civil cases would be brought by debt buyer plaintiffs.98 In the Dallas, Texas study, nearly two-thirds of the debt buyer suits were brought by the same five plaintiffs.99 The top two accounted for thirty-six percent of debt buyer suits.100 In other words, almost ten percent of civil cases filed in the Texas state courts in Dallas during this period were brought by just two debt buyers.

V.  Proposed Requirements for Plaintiff’s Affidavits in Order to Receive a Default Judgment

Since so much of the perverse incentive surrounding bought-debt litigation hinges on the mass entry of default judgments, the most expedient reform begins there. If plaintiffs, in order to be awarded a default judgment, were required to file a detailed affidavit according to a specific form, attesting to specific facts concerning the account at issue, and with supporting documentation attached, many of the problems surrounding this area of litigation could be resolved or mitigated. In addition to the usual material laying the foundation for the affiant and the attached documents, the affidavit would demonstrate the basic elements as outlined above: the debt is valid, the plaintiff has standing and the defendant is the proper party, and the amount pled is proper. Instead of a statement that the plaintiff has a vague idea that a debt is owed in an approximate amount, this form of affidavit would be fully sufficient to demonstrate all elements necessary for a judge to properly award a default judgment.

A.  Validity of the Debt

Demonstration of the validity of the debt would take different forms depending on the plaintiff ’s theory of recovery. For open account actions, the form would show a complete accounting of all charges from the beginning of the account, or at least from a zero balance.101 If a complete accounting is unavailable, then the plaintiff could still prevail in a claim for the items for which accounting is available, but not for any balance from the time demonstrable accounting begins.102 Without a corresponding contract claim (which obviates the need for an open account cause of action anyway), a plaintiff would be unable to recover fees or interest, at least beyond statutory interest according to the jurisdiction.103

For a breach of contract cause of action, the plaintiff would be re- quired to produce the underlying contract.104 Additionally, proof of as- sent to the contract by the defendant would be required, such as proof that the defendant used the account or that the defendant signed the contract or that the defendant made a payment against the debt.105 Since a signed contract proves both of these elements, it would make most sense for creditors to retain them and pass along the originals or at least copies to buyers of the debt.

For account stated, the affidavit would be more sensitive to jurisdiction due to variations on the application of the elements, but usually, the theory would require the most recent account statement, proof that payment was made on the account at least once in the past, and an affidavit from the holder of the account at the time of the most recent statement that the defendant did not timely object to the balance reflected on that statement.106

Other causes of action, such as unjust enrichment or money had and received, would follow this pattern, requiring comprehensive prima facie evidence of the original debt to be produced in conjunction with the affidavit.

B.  Standing

Having demonstrated the existence of the debt, the debt buyer would then be required to demonstrate that it has standing to collect the debt.107 By the time an account arrives at the point of litigation, many hands have held it, and a plaintiff must be prepared to demonstrate each link in the chain of assignment before that plaintiff can expect a court can legitimately award damages.108 One apparent way to establish each link in the assignment would simply be to collect the contracts, bills of sale, and data files that accompany each portfolio as it is passed along, and then present all of them with the affidavit to the court when a default judgment is sought, instead of the current practice of passing along a single database entry and then attempting to secure the paperwork from the original creditor between discovery and trial.

In a practical sense, however, documenting a chain of assignment is no small task. 109Just as a prosecutor must be able to trace a chain of custody for evidence in a criminal trial, every step in a chain of assignment of sold debt would need one or the other party to attest to the validity of the contract, bill of sale, and data file that was involved in each transaction.110 Essentially, a separate affidavit is needed for each step in the chain.111 Either the current practice of contractually limiting the number of documents later buyers can request would need to be eliminated, or affidavits would need to be created at the time of sale to accompany either individual accounts or entire portfolios. In the first instance, a plaintiff seeking default judgment would need to contact each buyer in the chain of assignment to obtain an affidavit confirming each assignment. Considering the necessity, assignment contracts contemplating ultimate litigation would need to protect buyers’ rights to request and timely receive such documentation, and at significantly higher percentages than is currently customary. Considering that one of the major delays in court proceedings now is plaintiffs asking for continuances so that they can wait out limitations in the debt buying contract that restrict their right to ask for affidavits to a certain number per month, any change in this process would improve judicial efficiency.

The alternative would insert an affidavit into each file at the time each sale was made. Although this would require each account to be inspected by trained personnel at each stage to create an affidavit swearing that the account was examined and found complete and that according to the business records, including the associated contract and bill of sale, the account was transferred from one party to another. This has the disadvantage of generating a large amount of paperwork at the time of sale, but the advantage of eliminating the need to request the paperwork later, when it is a process of mailing back and forth and additional research.

Statutes of limitation also affect the question of standing. Since the FDCPA prohibits “the false representation of the . . . legal status of any debt,”112 and filing suit on a debt that is past its statute constitutes a false representation of the legal status of the debt, reform action should include language specifying that any collection action should be accompanied by an affidavit from the plaintiff ’s attorney stating that the debt is not past the relevant statute of limitation.113 Although the running of the statute of limitation is traditionally an affirmative defense that must be raised by the defendant or waived, case law has held that suits on time-barred debts violate the FDCPA.114 The proposed reform seeks to reduce or eliminate illegitimate suits filed in hopes of easy default judgments, and leaving this loophole open might invite debt buyers to pressure their attorneys to violate federal law.

Debt buyer plaintiffs should also be required to prove that the party being sued is the party to the original contract. Credit reports or public records tying the debtor to their current address or social security number are important to conclude that the defendant is the person who owes the debt to the plaintiff and not merely someone sharing the debtor’s name.115 In many cases, this is as simple as showing that the defendant still lives at the same address, but in others, where a defendant has moved or the plaintiff does not possess documentation of the debt, the plaintiff must still prove that the defendant who has been served is the debtor, rather than simply suing someone with the same first and last name, as sometimes happens now.116

C.  Value Calculations

In many cases, demonstrating the amount currently owed by a debtor is the most difficult task facing a debt buyer’s attorney. Under a system that requires debt buyer plaintiffs to provide complete records of the account from the beginning, however, the job becomes substantially less difficult. Open account actions become a simple matter of providing the accounting and calculating the statutory interest, if applicable, from the most recent transaction.117

Likewise, a breach of contract claim would become relatively simple to prove, since the original creditor would provide the contract to the debt buyer in each account.118 The debt buyer has only to take the contractual rate of interest and make simple calculations for the court.119 In cases where interest rates are tied to market rates or other factors, software normally available to banks may be required. Plaintiffs would be required to prove assent to the contract and its terms, but in most cases, the signed credit agreement or application would be sufficient.120 A reconstruction of such documents is not sufficient.121 Under the proposed rules, accounts stated and money had and received become completely obsolete, since debt buyers know up front that courts will not grant them default judgments without complete paperwork. Ideally, this hard incentive would be enough to preclude any sort of market in accounts with partial documentation. As an added benefit, creditors would need to make careful choices about destroying account records when they suspect the information could be used against them later, giving stronger effect to banking regulations designed to protect other public policy goals.

The process could be streamlined further if creditors made simple reforms to the original contracts. For example, simple language setting a specific interest rate after account default and charge off could reduce the calculation to something that could be worked out on a simple spreadsheet or even a calculator. Such foresight would likely have the added benefit of raising the value of a bank’s charged off accounts. These changes might also have the effect of making contracts more understandable to consumers.

VI.  Approaches to Implementation

Without implementation, even the most perfect idea for reform is meaningless. This proposal to require a complete set of affidavits with any motion for default judgment has at least three realistic avenues to implementation, each with its own advantages and drawbacks: federal law, state law, or court rules.

While an amendment to the FDCPA or a new federal law setting standards for courts to award default judgments on bought-debt collection actions would create the most stable national market for debt collectors and give judges and attorneys the benefit of a unified statutory basis across all jurisdictions, federal reform would likely face the greatest opposition from debt buyer lobbies.122 Even under the best circumstances, Congress has recently had more difficulty than usual enacting laws, a downward trend only starting to turn around.123

State statutes, already in place in some states, can go a long way toward protecting defendants, offering guidance to attorneys, and keeping courts of that state from being inundated with collection suits. State statutes are also generally easier to get onto the books. State statutes, however, can create issues for debt buyers working across multiple jurisdictions when differences in statutes and case law not only complicate the work of their attorneys but could lead to logistical issues as a patchwork of differing state laws require varied processes to manage debts within the same portfolio.124 This issue could be partially ameliorated through a uniform code or, as happened with the various consumer protection statutes,125 each state following other states to a greater or lesser degree when adopting statutes.

A third option is simply to require complete affidavits on default judgments through state court rules, either through the state supreme court or local court rules. These affidavits would need to prove the same set of facts: the debt is valid, the plaintiff has standing and the defendant is the proper party, and the amount pled is proper. Though this option may be the easiest path to reform, it might exacerbate the jurisdictional difference issues inherent in state law reform. New York City Civil Court has had notable success in pursuing local reform through a court rule.126 In 2009, the NYC Civil Court issued a directive advising judges to examine several questions before awarding de- fault judgments in debt collection cases, including whether a defendant had been legitimately served, whether the debt is time-barred, whether the defendant is income exempt, whether the defendant acknowledges the debt, and whether the plaintiff is licensed for collection work.127 A second directive, aimed at debt buyer collection cases, adds requirements to provide affidavits to demonstrate sale of portfolios from each seller and a complete accounting of the chain of assignment by the plaintiff.128 The directive, however, does not fulfill New York case law requirements, in that it does not require plaintiffs to demonstrate how they calculated the amount due.129 Due to the complexities of a credit card contract, New York precedent dictates that it is nearly impossible for a clerk to ascertain the amount due at the time of default judgment.130 Perhaps more importantly, the directive does not require the plaintiff to prove that the account in question was part of the particular portfolios mentioned in the sale affidavits, leaving in question who own the particular account that forms the basis of the cause of action.131 Still, the NYC Court directives demonstrate that even partial reform through local rules can help protect a jurisdiction from abuse.132

In Missouri, an existing state statute allows Associate Circuit judges, who see the vast majority of debt buyer cases, to set the standard for default judgments in their court rooms.133 Given that enforcement of evidentiary standards across courts has been inconsistent, however, expansion of these statutes is necessary,134 and local judges who impose court rules requiring debt buyer plaintiffs to demonstrate proof of debt and assignment have even found themselves under attack as a result.135

At least one judge in Missouri has invoked § 517.131.136 Following Askew, Judge MacPherson began examining the standing issue sua sponte.137 In one case, for example, when a pro se defendant appeared in front of her, she continued the case and gave the plaintiff 30 days to show standing.138 In response, the plaintiff filed a motion for change of judge, which Judge MacPherson denied on grounds that a hearing had already been held.139 Not long after, six writs of prohibition were filed against her in the Southern District Court of Appeals for this and other cases, embroiling her in a legal battle of her own.140 All six writs were eventually denied.141

At least one other Missouri judge has also been targeted by debt buyer plaintiffs through writ petitions.142 Judge Thompson was forced to defend at least four writ petitions when he struck debt buyer pleadings as sanctions for failing to answer discovery in several cases then refusing the plaintiff ’s request for a change of judge.143 The Missouri Court of Appeals also agreed with Judge Thompson.144

As discussed above, debt buyers may struggle to gather and verify the data needed to provide complete affidavits. In at least some cases, no verification is even attempted,145 so some oversight by the courts is needed. One prominent consumer attorney suggests reform of the statutory affidavit standards, possibly to include more detail and to attach the documents relied upon in their preparation.146 Since Missouri law requires demonstration of standing for a case to proceed, an affidavit demonstrating standing and proper party defendant would be needed before a case could proceed in any event.147 Another affidavit, this one demonstrating the amount due and the debt status, would be needed before a default judgment could be awarded. The reality of the situation is that reform will be difficult since so much money opposes any change.148 “There is no debtor’s lobby. Debtors are power- less people, so it falls to us to defend them.”149

Another experienced consumer attorney urges a specific evidentiary standard.150 In addition to the original agreement, the Truth in Lending Act disclosure statements are most important, since, he says, the meeting of the minds is demonstrated by this document.151 A reproduction is enough, but a recreation is not, because, like with the affidavits, records used to recreate these documents can get lost or scrambled.152 Debt buyers should be required to produce proof of assignment, which in Missouri and other states can be a business record affidavit from each seller and referencing the account.153 Finally, since litigating cases that are past the statute of limitation is a violation of the FDCPA, plaintiffs should be required to provide evidence of the last payment made on the account to prove that the claim is still viable.154 Mr. Rapp suggests an administrative solution: since Congress has delegated power to enforce the FDCPA to the Consumer Finance Protection Bureau, they have to power to set and enforce rules regulating the debt buying industry nationwide.155

VII.  Conclusion

Under the proposed reform, debt sellers would have no product unless they provided buyer what the buyer needed to legitimately demonstrate the debt in court, and so would need to create and retain records to that effect. Debt buyers would need to review their portfolios care- fully before filing suit, but would be able to effectively prosecute the suits that they did file.156 Courts would enjoy freedom from a significant portion of the litigation that currently clogs the works; at the very least, litigation would be streamlined as fewer cases were brought and those that were brought would never rely on a defendant’s discovery responses to make the plaintiff ’s case. Defendants would be freed from the burden of proving a plaintiff ’s case and the burden of paying judgments on specious lawsuits, which could not survive if properly litigated.157 Perhaps most importantly, order would be restored to the process of collecting bought accounts, and the attorneys involved would be protected by the process, since nothing would be gained by pressuring them into filing lawsuits on the hopes that no one looks too closely at them.

These reforms would come at a cost to the original creditors, who would now be responsible for maintaining more detailed records longer, a volume of paper that is not insubstantial given the volume of paper that a given account may accumulate, times the vast number of accounts that a single creditor may hold. In the digital age, however, where the cost of sufficient hard disk space to store such a file diminishes by the year, this cost lies more with retooling the industry’s practices than with actual labor or hardware.158 The cost of setting up a system to write a copy of each account statement to a customer’s folder every time one is generated to send out via mail or email is minuscule in comparison to the problems created by maintaining incomplete records, since the cost of scanning a signed contract pales in comparison to the cost of not doing so.159

A more substantial cost would come to the debt buyers themselves, at least indirectly. By forcing original creditors to improve the quality of their portfolios or see them drop to no value, requiring prima facie proof at default judgment would raise the value, and therefore likely also the cost to the buyer, of each account. Though each account would improve in value because it can be properly documented in court, the difference between the cost paid for any affected account and the amount a debt buyer could ultimately collect would shrink. Whether this loss would be offset by reduced collection costs is unclear, but the price of the necessary retooling of the debt collection industry would certainly be appreciable.

The greatest cost, though transitional, would be accounts that are open at the time this proposal is enacted and for which proper documentation has already been destroyed. Though creditors are required by the Equal Credit Opportunity Act to keep credit applications for at least twenty-five months after an account is opened, a large window remains before ac- counts are typically sold.160 Though keeping a the original contract that one might someday need to enforce would seem a logical best practice, since the consumer finance industry typically destroys paperwork after the five-to-seven-year mark, a requirement that this paperwork be produced even for default judgment purposes would have a significant impact on the industry.161

Even though the costs of transition would be significant, perhaps the time has come to let the sun set on the debt buying industry’s practice of seeking easy default judgments. The harms of allowing debt buying corporations to gamble with their own financial futures are immense for courts, consumers, and even collectors’ attorneys. The current practice of nearly all jurisdictions to grant judgment to a plaintiff based solely on a solemn promise that the plaintiff is fairly certain an individual owes them money compromises basic judicial values. Asking every debt buyer to produce basic documentation of the debt in question would, in a single step, both prevent abuse and protect everyone involved. The foundation of the industry would be shaken, but would be made more stable in the process.

  1. Throughout this article, “debtor” and “defendant” are used interchangeably to refer to the same party, who remains the same party no matter how many times the debt is sold. “Creditor” refers to the original creditor with whom the defendant incurred the debt. “Plaintiff ” refers to a litigating debt buyer who has brought suit against a defendant as part of a collection action.
  2. LISA STIFLER & LESLIE PARISH, CTR. FOR RESPONSIBLE LENDING, THE STATE OF LENDING IN AMERICA & ITS IMPACT ON U.S. HOUSEHOLDS, 6-8, 9 (2014), http://www.responsiblelending.org/state-of-lending/reports/11-Debt-Collection.pdf; Danielle Douglas, Taking on the Country’s Biggest Debt Buyer, N.Y. TIMES, May 9, 2014, https://www.washingtonpost.com/business/economy/taking-on-the-countrys-biggest-debt-buyer/2014/05/09/fbd65a24-a94d-11e3-b61e-8051b8b52d06_story.html; N.Y.C. BAR, REPORT BY THE CIVIL COURT AND CONSUMER AFFAIRS COMMITTEES IN SUPPORT OF INTRO. 0660-2007 (2009), http://www.nycbar.org/pdf/report/Consumer_Debt.pdf; see Encore Capital Grp., Inc., CFPB No. 2015-CFPB-0022, 7-10 (2015) [hereinafter ENCORE].
  4. ENCORE, supra note 2; STIFLER & PARISH, supra note 2; Peter A. Holland, The One Hundred Billion Dollar Problem in Small Claims Court: Robo-Signing and Lack of Proof in Debt Buyer Cases, 6 J. BUS. & TECH. L. 259, 268 (2011).
  5. Portfolio Recovery Assocs., CFPB No. 2015-CFPB-0023, 7 (2015) [hereinafter PORTFOLIO]; STIFLER & PARISH, supra note 2, at 10-11.
  6. PORTFOLIO, supra note 5, at 8 (2015); Douglas, supra note 2; STIFLER & PARISH, supra note 2, at 3.
  7. Chris Arnold, Millions of Americans’ Wages Seized Over Credit Card and Medical Debts, NAT’L. PUB. RADIO (Sept. 15, 2014, 4:52 AM), http://www.npr.org/2014/09/15/347957729/when-consumer-debts-go-unpaid-paychecks-can-take-a-big-hit; JONATHAN SHELDON ET AL., COLLECTION ACTIONS, 5 (3rd. ed. 2014); Paul Kiel & Annie Waldman, The Color of Debt: How Collection Suits Squeeze Black Neighborhoods, PROPUBLICA (Oct. 8, 2015), https://www.propublica.org/article/debt-collection-lawsuits-squeeze-black-neighborhoods.
  8. See SHELDON, supra note 7, at 55-99.
  9. See, e.g., Fed. R. Civ. P. 11 (noting that factual contentions will likely have evidentiary support); MO. CT. R. 4-3.1 (noting that a lawyer shall not bring a proceeding unless there is a basis in law and fact).
  10. See SHELDON, supra note 7, at 79.
  11. See, e.g., Citibank v. Miller, 222 S.W.3d 318, 320 (Mo. Ct. App. 2007).
  12. See Farley v. Chase Bank, 37 So. 3d 936, 937 (Fla. Dist. Ct. App. 2010).
  13. SHELDON, surpa note 7, at 87.
  14. Id. at 81.
  15. Id. at 80.
  16. Id.
  17. Id. at 83.
  18. Id.; see, e.g., Davis v. Discover Bank, 627 S.E.2d 819 (Ga. Ct. App. 2006); Am. Express Travel Related Servs. v. Redner, No. 264904, 2006 WL 664698, at *4 (Mich. Ct. App. Mar. 16, 2006).
  19. SHELDON, supra note 7, at 80.
  20. Id. at 86.
  21. 1 AM. JUR. 2D Accounts and Accounting § 24.
  22. Id.
  23. See SHELDON, supra note 7, at 90.
  24. Id.
  25. See Capital One Bank v. Celevenstine, No. 2008-4139, 2009 Pa. Dist. & Cnty. Dec. LEXIS 68, at *156-157 (Pa. D & C.5th Jan. 30, 2009).
  26. See Citibank v. Cooper, No. 305-10-08, (Vt. July 10, 2009) (NCLC, Unreported Decisions).
  27. WIS. STAT. § 425.109(2).
  28. N.Y. GEN. BUS. LAW § 517 (McKinney).
  29. Jaramillo v. Portfolio Acquisitions, L.L.C. No. 14-08-00939-CV, 2010 WL 1197669 (Tex. App. Mar. 30, 2010); SHELDON, supra note 8, at 99.
  30. Dulong v. Citibank, 261 S.W.3d 890, 893 n.3 (Tex. App. 2008).
  31. SHELDON, supra note 7, at 99.
  32. Id.
  33. Id.
  34. Id.
  35. Minor v. Baldridge, 55 P. 783, 785 (Cal. 1898).
  36. Inv’rs Title Co. v. Hammonds, 217 S.W.3d 288, 293 (Mo. 2007) (citing Blue Cross Health Serv. v. Sauer, 800 S.W.2d 72, 75-76 (Mo. Ct. App. 1990)).
  37. FED. TRADE, supra note 3, at 17.
  38. See id.; Bad Debt Prices Up Amid Supply Shortage, COLLECTIONS & CREDIT RISK, ( July 2, 2010 11:09AM), http://www.collectionscreditrisk.com/news/ccr_dealspricing/bad-debt-prices-up-amid-supply-shortage-3002377-1.html; Douglas, supra note 2.
  39. FED. TRADE, supra note 3, at 1.
  40. CACH, L.L.C. v. Askew, 358 S.W.3d 58, 62 (Mo. 2012); Ass’n of Battery Recyclers, v. EPA, 716 F.3d 667, 674 (D.C. Cir. 2013).
  41. STIFLER & PARISH, supra note 2, at 14.
  42. Conor P. Duffy, A Sum Uncertain: Preserving Due Process and Preventing Default Judgments in Consumer Debt Buyer Lawsuits in New York, 40 FORDHAM URB. L.J. 1147, 1170 (2013).
  43. FED. TRADE, supra note 3, at 21.
  44. Royal Fin. Group, L.L.C. v. George, No. ED 92972, 2010 WL 1223791, *3, *4 (Mo. Ct. App. 2010).
  45. STIFLER & PARISH, supra note 2, at 10.
  46. FED. TRADE, supra note 3, at 35, 39.
  47. See id. at iii; STIFLER & PARISH, supra note 2, at 11; PORTFOLIO, supra note 5; ENCORE, supra note 2.
  48. See FED. TRADE, supra note 3, 35, 35 n.150, 39.
  49. Id. at 45.
  50. Asset Acceptance v. Lodge, 325 S.W.3d 525, 527 (Mo. Ct. App. 2010).
  51. FED. TRADE, supra note 3, at C-11.
  52. Dalié Jiménez, Dirty Debts Sold Dirt Cheap, 52 HARV. J. ON LEGIS. 41, 80-81 (2015).
  53. Id.; Jeff Horwitz, Bank of America Sold Card Debts to Collectors Despite Faulty Records, AMERICAN BANKER (Mar. 29, 2012), http://www.americanbanker.com/issues/177_62/bofa-credit-cards-collections-debts-faulty-records-1047992-1.html.
  54. Jiménez, supra note 52, at 81; STIFLER & PARISH, supra note 2, at 7; FED. TRADE, supra note 3, at 34-35.
  55. Holland, supra note 4, at 268.
  56. FED. TRADE, supra note 3, at 34-35, 39-40; Holland, supra note 4, at 262; Jiménez, supra note 52, at 69-70.
  57. FED. TRADE, supra note 3, at 34-35; Holland, supra note 4, at 268; Jiménez, supra note 52, at 65-72.
  58. See Interview with Jovanna Longo, Consumer Attorney, Longo Law Firm, L.L.C., in Butler, MO (Sept. 28, 2015).
  59. See, e.g., Midland Funding L.L.C. v. Loreto, 2012 NY Slip Op 50338 (Feb. 23, 2012) at 5.
  60. See Interview with Jovanna Longo, supra note 58.
  61. Id.
  62. See SHELDON supra note 7, at 74-75; see also CACH, L.L.C. v. Askew, 358 S.W.3d 58, 62 (Mo. 2012).
  63. “The parole evidence rule bars extrinsic evidence, unless an integrated contract is ambiguous.” Exec. Bd. of Mo. Baptist Convention v. Carnahan, 170 S.W.3d 437, 448 (Mo. Ct. App. 2005) (citing Royal Banks of Mo. v. Fridkin, 819 S.W.2d 359, 361 (Mo. 1991) (en banc)); “Where the language of a contract is unambiguous, the intent of the parties is to be gathered from the contract alone, and a court will not resort to construction where the intent of the parties is expressed in clear unambiguous language.” Dunn Indus. Group, Inc. v. City of Sugar Creek, 112 S.W.3d 421, 428-29 (Mo. 2003) (en banc); “If a written document appears on its face to be a complete agreement, it is conclusively presumed to be a final and complete agreement between the parties.” Polka v. Jamison, 4 S.W.3d 611, 613 (Mo. Ct. App. 1999); Holland, supra note 4, at 262.
  64. See Holland, supra note 4, at 265.
  65. Id. at 269.
  66. See FED. TRADE, supra note 3, at 36-37.
  67. See SHELDON, supra note 7, at 81; Jiménez, surpa note 51, at 84-87.
  68. See Jiménez, supra note 52, at 84-87.
  69. SHELDON, supra note 7, at 81.
  70. Id.
  71. See, e.g., FED. R. CIV. P. 11(b); MO. CT. R. 55.03(c).
  72. Under § 807(10), “The use of any false representation or deceptive means to collect or attempt to collect any debt” is sanctionable. 15 U.S.C.A. § 1692e, invalidated by Townsend v. Quantum3 Group L.L.C., 535 B.R. 415 (M.D. Fla. 2015).
  73. See Interview with Jovanna Longo, supra note 58.
  74. Brian Burnes, Jackson County Jury Assesses $82 Million Verdict Against Debt Collection Firm, KANSAS CITY STAR, May 15, 2015, http://www.kansascity.com/news/local/article21073359.html; Portfolio Recovery Assocs., L.L.C. v. Mejia, No. 1216–CV34184 (16th Cir. Ct. Mo. 2014) (NCLC, Unreported Decisions).
  75. Portfolio Recovery Assocs., L.L.C. v. Watson, No. 1231-CV11458 (31st Cir. Ct. Mo. 2014).
  76. ENCORE, supra note 2, at 162; PORTFOLIO, supra note 5, at 63.
  77. FED. TRADE, supra note 3, at 7.
  78. Holland, supra note 4, at 266-67.
  79. Id.; Interview with Michael Rapp, Consumer Attorney, Consumer Legal Clinic, L.L.C., in Kansas City, MO (Oct. 28, 2015).
  80. Holland, supra note 4, at 265.
  81. Jeremy Gogel, Remedies (and Lack Thereof ) for Victims of Abusive Debt Collection Practices, 66 J. MO. BAR 330, 334 (2010).
  82. Holland, supra note 4, at 266-67; Victoria J. Haneman, The Ethical Exploitation of the Unrepresented Consumer, 73 MO. L. REV. 707, 721-25 (2008).
  83. See Interview with Jovanna Longo, supra note 58.
  84. Id.
  85. Id.
  86. See Haneman, supra note 82, at 708.
  87. FED. TRADE, supra note 3, at 7 (“[R]elatively few consumers who are sued for alleged unpaid debts actually participate in lawsuits. [M]ost panelists indicat[ed] that the rate in their jurisdictions was close to ninety percent.”).
  88. Judith Fox, Rush to Judgment: How the Fair Debt Collection Practices Act Fails to Protect Consumers in Judicial Debt Collection, 13 FLA. ST. U. BUS. REV. 37, 46 (2014).
  89. Interview with Jovanna Longo, supra note 58.
  90. E.g., CACH, L.L.C. v. Askew, 358 S.W.3d 58, 62 (Mo. 2012); see, e.g., Ass’n of Battery Recyclers, v. EPA, 716 F.3d 667, 674 (D.C. Cir. 2013).
  91. Interview with Jovanna Longo,supra note 58.
  92. Id.
  93. Id.
  94. Id.
  95. Id.; 15 U.S.C.A. § 1692(a).
  96. Mary Spector, Debts, Defaults and Details: Exploring the Impact of Debt Collection Litigation on Consumers and Courts, 6 VA. L. & BUS. REV. 257, 295 (2011).
  97. Id. at 278.
  98. Cf. id.
  99. Id. at 280.
  100. Id.
  101. See Farley v. Chase Bank, 37 So. 3d 936, 937 (Fla. Dist. Ct. App. 2010).
  102. See Capital One Bank v. Denboer, 791 N.W.2d 264, 281 (Iowa Ct. App. 2010).
  103. See FIA Card Servs. v Kirasic, No. AR06-009360 (Pa. Ct. Com. Pl. Alleghany Cty. Nov. 7, 2007) (Wettick, J.) (NCLC, Unreported Decisions).
  104. 12 C.F.R. Pt. 30, App. A(I)(B)(II)(C); LVNV Funding, L.L.C. v. Moehrlin (Fla. Volusia Cnty. Ct. Aug. 2006) (NCLC, Unreported Decisions) (Green, J.) (dismissing count where no contract proven and affidavit was not proper).
  105. See Jackson v. Pasadena Receivables, Inc., 921 A.2d 799, 802 (Md. 2007).
  106. See Univ. of S. Ala. v. Bracy, 466 So. 2d 148, 150 (Ala. Civ. App. 1985) (reversing a judgment for a directed verdict upon a showing of this information).
  107. See CACH, L.L.C. v. Askew, 358 S.W.3d 58, 62 (Mo. 2012).
  108. See Midwestern Health Mgmt., Inc. v. Walker, 208 S.W.3d 295, 298 (Mo. Ct. App. 2006).
  109. Interview with Michael Rapp, supra note 79.
  110. Id.
  111. Id.
  112. 15 U.S.C.A. § 1692e (West), invalidated by Townsend v. Quantum3 Group L.L.C., 535 B.R. 415 (M.D. Fla. 2015).
  113. Id.
  114. See, e.g., Kimber v. Fed. Fin. Corp., 668 F. Supp. 1480, 1488 (M.D. Ala. 1987) (holding that debt collector’s filing of lawsuit on a time-barred debt violated the FDCPA); Royal Fin. Group, L.L.C. v. George, No. ED 92972, 2010 WL 1223791 (Mo. Ct. App. 2010) (holding that FDCP was not violated because plaintiff should have known defendant was not liable for debt); DEE PRIDGEN&RICHARD M. ALDERMAN, CONSUMER CREDIT AND THE LAW § 12:24 (“[T]he Eighth Circuit [has] held that a debt collector violates the FDCPA when it threatens or pursues litigation to collect on a potentially time-barred debt that is otherwise valid.”); Thomas R. Dominczyk, Collecting Time-Barred Debt: Is it Worth the Risk?, BUS. L. TODAY (Apr. 2014), http://www.americanbar.org/publications/blt/2014/04/04_dominczyk.html (“[C]ourts expanded on the statute of limitations problem, finding violations where a collector threatened suit on time-barred debts, but did not actually file them.”).
  115. See Portfolio Recovery Assocs., L.L.C. v. Mejia, No. 1216–CV34184 (16th Cir. Ct. Mo. 2014) (NCLC, Unreported Decisions) (mistaken identity by plaintiff resulted in $82 million jury verdict against debt buyer).
  116. Id.
  117. See, e.g., Berlin v. Pickett, 221 S.W.3d 406, 410 (Mo. Ct. App. 2006); Capital One Bank v. Toney, No. 06 JE 28, 2007 WL 969420, *6 (Ohio Ct. App. Mar. 28, 2007).
  118. Bevington v. Cavalry Portfolio Servs., L.L.C., 738 S.E.2d 329, 331 (Ga. Ct. App. 2013).
  119. Id.
  120. Target Nat’l Bank v. Greiner, No. CI-09-03069, (Pa. Ct. Com. Pl. Lancaster Cty. Sept. 30, 2009), (NCLC, Unreported Decisions).
  121. See 12 C.F.R. Pt 30, App. A(C).
  122. Interview with Dale Irwin, Consumer Attorney, Slough, Connealy, Irwin, and Madden, in Kansas City, Mo (Oct. 19, 2015).
  123. Philip Bump, The 113th Congress is Historically Good at not Passing Bills, THE WASH. POST, July 9, 2014, https://www.washingtonpost.com/news/the-fix/wp/2014/07/09/the-113th-congress-is-historically-good-at-not-passing-bills/; Drew Desilver, Current Congress is Looking a Little More Productive—So Far, FACT TANK, (Aug. 31, 2015), http://www.pewresearch.org/fact-tank/2015/08/31/current-congress-is-looking-a-little-more-productive-so-far/.
  124. Interview with Dale Irwin, supra note 122.
  125. For a summary of the similarities and differences of state “Unfair and Deceptive Acts and Practices” statutes, such as the Missouri Merchandising Practices Act, see CAROLYN L. CARTER, CONSUMER PROTECTION IN THE STATES: A 50-STATE REPORT ON UNFAIR AND DECEPTIVE ACTS AND PRACTICES STATUTES (2009).
  126. Advisory Notice, Consumer Debt Cases: N.Y. C.P.L.R. § 3015(e); Validation; Allocutions of Stipulations, AN-9 (N.Y. Civ. Ct. June 21, 2008), http://www.nycourts.gov/courts/nyc/SSI/directives/AN/consumerdebt.pdf; see Duffy, supra note 42.
  127. Advisory Notice, C.P.L.R. § 3015(e).
  128. See Directives and Procedures, Default Judgments on Purchased Debt, DRP-182 (N.Y. Civ. Ct. May 13, 2009), http://www.nycourts.gov/courts/nyc/SSI/directives/DRP/drp182.pdf; see also Duffy, supra note 42, at 1183-84.
  129. Collins Fin. Servs. v. Vigilante, 915 N.Y.S.2d 912, 915-16 (N.Y. Civ. Ct. Richmond Cty. 2011); see Duffy, supra note 42 at 1187; see also Eric Y. Wu, Vigilante Justice: Ensuring That Consumer Credit Plaintiffs Are Not Above the Law in Collins Financial Services v. Vigilante, 60 AM. U. L. REV. 1561, 1569 (2011).
  130. Duffy, supra note 42, at 1187-88.
  131. See id. at 1184; Vigilante, 915 N.Y.S.2d at 915-16.
  132. Duffy, supra note 42, at 1183-84.
  133. “A default judgment may be entered in favor of a party filing a claim upon appearance by such party in person or by attorney upon written oath made by such party or upon such evidence as may be determined by the judge when the opposing party has been duly and timely served with summons and does not appear in court on the return date or subsequent date to which the case has been continued.” MO. ANN. STAT. § 517.131 (West); see also MO. ANN. STAT. § 408.556 (West) (default judgment for lender requires adduction of a verified petition showing lender’s entitlement of the relief demanded).
  134. Interview with Dale Irwin, supra note 122.
  135. Id.
  136. See Portfolio Recovery Assocs., L.L.C. v. Edward Discher, No. 14OZAC00116 (44th Cir. Ct. Mo. July 10th 2014).
  137. Id.
  138. Id.
  139. Id.
  140. Missouri ex rel. Portfolio Recovery Assoc. v. Hon. Cynthia Ann MacPherson, SD33862 (S.D. Mo. Ct. App. Apr. 16, 2015); Missouri ex rel. Portfolio Recovery Assoc. v. Hon. Cynthia Ann MacPherson, SD33863 (S.D. Mo. Ct. App. Apr. 16, 2015); Missouri ex rel. Portfolio Recovery Assoc. v. Hon. Cynthia Ann MacPherson, SD33864 (S.D. Mo. Ct. App. Apr. 16, 2015); Missouri ex rel. Portfolio Recovery Assoc. v. Hon. Cynthia Ann MacPherson, SD33865 (S.D. Mo. Ct. App. Apr. 16, 2015); Missouri ex rel. Portfolio Recovery Assoc. v. Hon. Cynthia Ann MacPherson, SD33866 (S.D. Mo. Ct. App. Apr. 16, 2015); Missouri ex rel. Portfolio Recovery Assoc. v. Hon. Cynthia Ann MacPherson, SD33867 (S.D. Mo. Ct. App. Apr. 16, 2015).
  141. See cases cited supra note 140.
  142. Missouri ex rel. Portfolio Recovery Assoc. v. Hon. James Carey Thompson, SD33279 (S.D. Mo. Ct. App. Apr. 24, 2015); Missouri ex rel. Portfolio Recovery Assoc. v. Hon. James Carey Thompson, SD33280 (S.D. Mo. Ct. App. Apr. 24, 2015); Missouri ex rel. Portfolio Recovery Assoc. v. Hon. James Carey Thompson, SD33293 (S.D. Mo. Ct. App. Apr. 24, 2015); Missouri ex rel. Portfolio Recovery Assoc. v. Hon. James Carey Thompson, SD33294 (S.D. Mo. Ct. App. Apr. 24, 2015).
  143. See cases cited supra note 142.
  144. See cases cited supra note 142.
  145. One debt buyer employee whose job it was to create affidavits for use in litigation swore under oath that if the debt buyer’s computer screen told him that the moon was made of green cheese, he would conclude that it was true. Another admitted to preparing 2,000 affidavits a day, roughly one every 13 seconds. David Segal, Debt Collectors Face a Hazard: Writer’s Cramp, N.Y. TIMES, Oct. 31, 2010, http://www.nytimes.com/2010/11/01/business/01debt.html?_r=0.
  146. Interview with Dale Irwin, supra note 122.
  147. CACH, L.L.C. v. Askew, 358 S.W.3d 58, 62 (Mo. 2012).
  148. Interview with Dale Irwin, supra note 122.
  149. Id.
  150. Interview with Michael Rapp, supra note 79.
  151. Id.
  152. Id.
  153. Id.
  154. Id.; see § 807(10), supra note 72.
  155. Interview with Michael Rapp, supra note 79.
  156. Jiménez, supra note 52, at 113.
  157. See, e.g., Portfolio Recovery Assocs., L.L.C. v. Mejia, No. 1216–CV34184 (16th Cir. Ct. Mo. 2014) (NCLC, Unreported Decisions).
  158. A History of Storage Cost (Update), MKOMO.COM, http://www.mkomo.com/cost-per-gigabyte-update.
  159. See, e.g., Mejia, 1216–CV34184.
  160. 12 C.F.R. § 202.12.
  161. See SHELDON, supra note 7, at 81.