Wheres the Proof? (2009)

8/2/2019 Wheres the Proof? (2009)

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DC 37 IVIUNICIPAL EMPLOYEES LEGAL SERVICES125 Barclay Street, New York, NY 10007-2179Telephone: (212) 815-1818 Fax: (212) 815-1343

JOAN L. B E R A r ~ B A U M Director and Chief CounselROBERT A. M,o,RTINAssociate Direclo'

December 1, 2009

Federal Trade CommissionOflfice of the Secretary60U Pennsylvania Avenue, N. W.Room H-135 (Annex A)Washington, D.C. 20580

Re: Debt Collection Roundtable - Project No. P094806To the Federal Trade Commission,

Enclosed is the report issued today by DC 37 Municipal Employees LegalServices, "Where's the Proof?"Sincerely,

Robert A. Martin

A Prepaid Lega l Services Program o f the DC 37Health andSecurity PlIln:F!:stablished by District Council 3 7, American Federation o fState, County & Municipal Employees, AFL-CIO ~ 2 0 1 " ' x 2


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When Debt Buyers are Asked to SubstantiateTheir Claims in Collection Lawsuits Against NYC

Employees and Retirees, They Dont

District Council 37Municipal Employees Legal Services

December 2009


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About DC 37 Municipal EmployeesLegal Services

DC37MunicipalEmployeesLegalServices,orMELS,isaprepaidlegalservicesplanofDistrictCouncil37,AFSCME(AmericanFederationofState,CountyandMunicipalEm-ployees),AFL-CIO.Ourin-housestaffprovidesbeneitsinarangeofcivillegalmatterstocurrentandretiredemployeesoftheCityofNewYork.MELSlawyersregularlyrepre-sentconsumersininancialanddebtmatters.

AcknowledgmentsTheprincipalauthorofthisreportisRobertMartin,AssociateDirector.LawIntern

ShelbyRuss,NewYorkLawSchool,2010,andLegalAssistantFayeRobinsassistedintheresearch.ManythankstoShelbyRussandtootherswhohelpedinthepreparationanddraftingofthereport,includingDirector andChiefCounselJoanL.Beranbaum,SystemsManagerDavidBoyd,SupervisingAttorneySheldonBarasch,SeniorAttorneysBarbaraCassandSalliBarash,andStaffAttorneysRashanaCain,KimberlyJohnson,JillMarcus,andKarenRobinson.

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Executive Summary

The lawyersofDC37MunicipalEmployeesLegalServiceshaveobservedthatwhentheyappearonbehalfofadefendantandsubmitadiscoverydemandseekingsubstantiationofthedebt,theplaintiffgenerallyfailstoproceedfurtherwiththecase.Wedecidedtoreviewandcompileresultsindebtbuyercasesopenedoveran18-monthperiod.Of the 238 cases in which our ofice sought substantiation of the debt:

Thedebtbuyerrespondedonly5.5%ofthetime.In94.5%ofthecases,theplaintifffailedtosubstantiatethedebt. Evenwhenthedebtbuyerdidrespond,ratherthanshowingthatthedebtwasowed,itsowndocumentationoftenprovedtheopposite. Thecasesinthestudybearacommonthread:inmanyinstancesdebtbuyerssuedcon-theftandmistakenidentity

yhadnolegitimateclaims.Debtbuyerssuedincasesofidentitysumerswhentheyclearl,whentheirrecordsdidnotrelectpaymentsbythedefendant,andwhenthedebtwasbeyondthestatuteoflimitations.

In65ofthe238cases(27%),ourclientshadonlylearnedofthelawsuitaftertheirsal-arywasgarnishedorbankaccountrestrained.Theseclientsweretypicallydeprivedoftheuseoffundsfor10daystothreeweeksuntilwecouldliftthegarnishmentorrestraintonanallegeddebtthatthedebtbuyercouldnotsubstantiate.

Based on our study, we recommend that the following steps be taken:

enougProhibitadebtcollector from ilingacollection lawsuitunless it is inpossessionof

hevidence,inaformadmissibleincourt,toshowthatitsclaimisvalid. PasslegislationinNewYorkrequiringaplaintiffinadebtcollectionactiontosetforthevidenceofitsclaimswhenitilesthelawsuit. Takeeffectivestepstocurbbeyondthestatuteoflimitations.thecommonpracticeofdebtbuyerssuingondebtsthatare

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Introduction

hisreporthasbeenpreparedbyDistrictCouncil37MunicipalEmployeesLegalSer-vices,knownasMELS,basedonourrecentexperiencesinlitigatingcasesiledincourtbydebtbuyers.TAsdebtbuyinghasemergedasagrowthindustry,thenumberofdebtcollectionlawsuitshassurged.DebtcollectionilingsintheNewYorkCityCivilCourthavemorethan

doubledsince2000,toaround300,000annually. Thedefaultrateinthesecaseshascontinuedtohoveraround75%ormore.2

1

Debtbuyersarecompanieswhopurchasedebtfromanoriginalcreditor,usuallyacreditcardissuer,orfromanotherdebtbuyer,andthenpursuecollectionefforts.Debtbuyerstypicallypaypenniesonthedollarorlessforthedebtstheypurchase.Technologicalchangesthatallowac-countstobesoldinbulkthroughatransferofcomputerrecordshavespurredtheescalationin

3debtbuying.Practicesassociatedwithdebtbuyinghavedrawnincreasingattentionfromconsumerad-

vocatesnationallyandinNewYork.Thosepracticesincludetheprevalenceofsewerserviceincollectionscases;thefailureofdebtbuyersrecordstorelectinstancesofidentitytheftandmistakenidentity,paymentsmadebydebtors,anddisputesb

4andlawsuitsondebtsthatarebeyondthestatuteoflimitations.yaconsumerthatadebtisowed;

Genesis of this ReportLawyersatMELSobservethatwhentheyappearonbehalfofaclientinacollectionscase

broughtbyadebtbuyer,thecasenormallydiesonthevine.Ourexperiencemirrorsthatofcon-sumerlawyersinNewYorkandacrossthecountry,whoreportthatplaintiffs,whenconfrontedwithadefendantwhoselawyerappearsinthecourtcaseandrequestsdocumentationofthedebt,arecommonlyunableorunwillingtosubstantiatethedebt.Inrecentmonthsthemedia,legislativehearings,courtdecisionsandotherforumshavebeen illedwithstoriesofconsum-ers,theirlawyersandadvocateswhoreportthatdebtbuyerssueconsumerswithlimsyevi-denceornoneatall.

5Althoughvariousstudieshavebeenconductedofcasesiledbydebtbuyers, toourknowl-edgenocomprehensivedatahasbeencompiledoftheoutcomesincourtcaseswheredefen-dantsappearinthecase.BecauseofthevolumeofcasesthatMELShandles,weundertooktocompilesuchdataoveraperiodoftime.

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The StudyIn conducting the study, we identiied and reviewed each case ile in our ofice:

Openedinan18-monthperiod,January1,2008June30,2009, Thatwasbroughtbyadebtbuyer(notanoriginalcreditor),and InwhichaMELSlawyerenteredanoticeofappearanceandservedadiscoverydemandseekingsubstantiationoftheplaintiffsclaim.

Ourdiscoverydemand inacollectionscaseconsistsofwritten interrogatoriesrequestingbasicinformation,includingthedatewhenthedefendantenteredintothecreditagreement,abreakdownofthesumssought,andthedateofthelastpayment.Inadebtbuyercase,theinter-rogatoriesrequestthenameoftheoriginalcreditorandanydebtbuyer(s)whosubsequentlypurchasedthedebt,andacopyofanyassignmentsgivingtheplaintifftherighttosueonclaim.UnderNewYorkprocedurallaw,theplaintiffisrequiredtoserveswornanswerstothethe

6interrogatorieswithin20days.We categorized each case according to the following outcomes:

No response bytheplaintifftothediscoverydemand. Formal response asrequiredbylaw. Informal response. Insomecases,theplaintiffdidnotprovidetherequiredformalresponse,butsubmittedapartialresponsebyletterfromitslawyer.

Inaddition,wetalliedthenumberofourclientswhoonlybecameawarethattheyhadbeensuedwhentheirbankaccountwasrestrainedortheirwagesgarnished.

Results of the Study

The results can be summed up very succinctly: in very few cases did debt buyerplaintiffs provide any documentation at all. Most plaintiffs simply ignored the re-quest to substantiate the debt. In the few cases in which the debt buyer responded,the documentation often showed the defendant did not owe the debt.

238casesmatchedtheproileofthestudythatis,debtbuyercasesopenedbetweenJanuary1,2008andJune30,2009,inwhichouroficeappearedandservedadiscoverydemandontheplaintiff. Theplaintiffrespondedtoourinterrogatoriesinonly13,or5.5%,ofthecasessixfor-malresponsesasrequiredbylaw,andseveninformalresponses. In94.5%ofthecasesinwhichdebtbuyerssuedconsumers,theplaintifffailedtoprovidesubstantiationofthedebt.furtheraction;althoug Inmostinstances(194cases,86.3%),theplaintiffhastakennohthecaseisstillpending,experienceshowsthatthedebtbuyerisunlikelyevertoproceed.Insomecases(31cases,or13.7%),theplaintiffdiscontinuedtheaction,eitheruponreceivingthediscoverydemandoratalaterpoint.

Thus,inthevastmajorityofcases,almost95%ofthetime,theplaintiffcouldnotorwouldnotsubstantiatethedebtonwhichithadiledsuit.Theseresultsareshocking,eventhoughwe

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werealreadyawarethatmostdebtbuyerplaintiffsinourcaseswalkawaywhenputtothetest.5


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Debt Buyer Plaintiffs Failed toSubstantiate That a Debt is Owed

FORMAL RESPONSEINFORMAL RESPONSENO RESPONSE/PLANTIFF FAILED TO DOCUMENT DEBT

Debt Buyer PlaintiffsFailed to Substantiate that FORMAL RESPONSEa Debt is Owed

2.5%

INFORMAL RESPO

3.0%

NO

RESPONSE/PLANTIFF

FAILED TO

DOCUMENT DEBT

94.5%

Formal Response

Informal Response

No response/Plaintiff failed to Document debt

Thestudyalsotrackedthenumberofourclientswhoirstbecameawarethattheyhadbeensuedandadefaultjudgmenthadbeenenteredwhentheirsalarywasgarnishedand/ortheirbankaccountwasrestrained.Thosepersonsthenhadtocontactandretainouroficetorepresentthemandileanordertoshowcausetohavethejudgmentvacated.Oncethejudgmentwasvacatedandthecaserestoredtothecourtcalendar,ittookadditionaltimeforthedefendanttoberestoredtofulluseofthesalaryandbankaccount.Typically,thiswholeprocesstookfrom10daystothreeweeks.

Andformostoftheseclients,theendresultwasthatthedebtbuyerplaintiffhavingcom-mencedalawsuitandobtainedadefaultjudgmentwasunwillingorunabletodocumentthatthedebtwasowedintheirstplace.

Sixty-ive of the clients or 27% in the study only became aware they had been suedwhen their bank account was restrained or salary garnished.Manyotherclientswerenotproperlyservedaccordingtothe law,but,fortunately,becameawareofthe lawsuitbeforeentryofadefaultjudgmentorbeforesalarygarnishmentorbankrestraint.

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Many Consumers First Learned of LawsuitWhen Pay Check Was Garnished or BankAccount Restrained

Total Numberof Cases

Defendant First Learnedof Lawsuit ThroughGarnishment or BankRestraint

Number

238

65

As Percentage ofCases in Study

(100%)

27.3%

Case Studies:The Human Side of Debt Buyers Filing Lawsuits onDebts They Cannot Substantiate

Thesecasestudiesfromtheilesreviewedforthisreportillustratethepatternofdebtbuyersilingsuitonclaimeddebts,butthenfailingtosubstantiatetheirclaimwhenMELSlawyersap-pearinthelegalactionandserveadiscoverydemand.(Thenamesusedareictitious.)

Ms. Swiftisaschoolaideinapublicelementaryschool.Shelearnedofalawsuitagainstherbyadebtbuyer,PalisadesCollection,onlyaftershereceivedarestrainingnoticeandjudgmentforover$7,000inAugust,2008.Although the lawsuit claimed that Ms. Swifthad originally owed Fingerhut, she had never done business with Fingerhut; her creditreport reveals no Fingerhut account and no other item resembling the account. MELSlawyerssucceeded invacatingthedefault judgmentandsubmittedananswerbasedonidentitytheftandmistakenidentity.Theyalsoservedademandfordiscoveryonthedebtbuyerslawyersseekingsubstantiationoftheallegeddebt,butmorethanayearlaterhavereceivednoresponse. Ms. Ramirez isaschoollunchhelperwhowassuedin2008byPeopleFirstRecoveries.AhandwrittennotationonthesummonsandcomplaintindicatedthattheoriginalcreditorwasBankofAmerica,butMs.RamirezhadneverhadaBankofAmericacreditcardandcouldnotidentifythedebt.Theplaintiffhasyettorespondtointerrogatoriesortoprovideanydocumentation.Itsattorneycouldonlystateinaletter,Theoriginalcreditorappearsto be BankofAmerica,butthatitispossiblethatthecreditcardwasissuedbyanotherin-stitution.Heclaimedtoknowthatthecharge-offdatewasin2003.InthatcasesinceBankofAmericaisbasedinDelaware,whichhasathree-yearstatuteoflimitationsthe debt isclearly beyond the statute of limitations.

Ms. Sanchez, a911operatorintheNYCityPoliceDepartment,irstlearnedshehadbeensuedwhenshereceivednoticeofagarnishmentandbankrestraintinMarch,2009.Shehad

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beensuedbyadebtbuyer,EmpirePortfolios,basedonanallegedHSBCcreditcarddebt.7


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The problem with the plaintiffs case, however, was that Ms. Sanchez had paid thedebt in full in 2005, and had a cancelled check for $4,400 to prove it. AMELSlawyerwasabletohavethejudgmentvacated,andtheplaintiffhasyettoproduceanydocumen-tationinsupportofitslawsuit. Mr. Chen, acaseworker,learnedofalawsuitbyLaridianConsultingonlyafterreceiv-ingacopyofadefaultjudgmentforover$6,000inNovember,2008.ThelawsuitclaimedthatMr.ChenhadoriginallyowedMarylandNationalBank.However, he had never hada credit card from that bank; his credit report shows no Maryland National Bank ac-count and no similar item. Aftervacatingthedefaultjudgment,MELSlawyerssubmit-tedananswerassertingmistakenidentityandidentitytheft,andademandfordiscoveryseekingsubstantiationoftheallegeddebt.Ayearlater,therehasbeennoresponse. Ms. Brown isa67-year-oldretiredschoollunchhelperwhoreceivessocialsecurityandapension.Sheswitchedphoneprovidersin2004afterreceivinganinlatedmonthlybillfromMCIforseveralhundreddollarsthatshedisputedandwhichshewasunabletoresolvewiththecarrier.InMarch,2005,shemadea$300paymentafterbeingbadgeredbyacollectionagency. InDecember,2007,Ms. Brown was sued by LR Credit 14 foran amount that did not relect the payment to the debt collector. MELS served the

plaintiff with interrogatories in May, 2008, and never received a response. InAugust,2009,afterbeingconfrontedbytheMELSlawyerwiththefactthatthedebtbuyerscasewaswelloutsidethestatuteoflimitationsfortelecommunications matters(twoyears),theplaintiffsattorneydiscontinuedthelegalaction. Mr. Davis isanoficeworkerfortheHealthandHospitalsCorporationwhowassuedbyNorthStarCapitalAcquisitionbasedonaCapitalOnecreditcardaccount.From thevery face of the plaintiffs Complaint, the lawsuit was beyond the statute of limita-tions. TheComplaint,whichwasdatedAugust,2008,indicatedthatthedefaultoccurredinJanuary,2002,thusplacingthedebtoutsidethelimitationsstatuteforwrittencreditcardagreementsinbothVirginia,whereCapitalOneisbased(iveyears),andNewYork(sixyears). Ms. Montoya isanurseaideinapublichospital.ShelearnedofalawsuitagainstherbyMidlandFundingwhenherbankaccountwasrestrained.ShewasallegedlyservedatanaddressintheBronxwhereshehadneverlived(asdocumentedbyleaserecords).Shealso had never had a credit card with HSBC, the original creditor. HerMELSlawyerwasabletohavethebankrestraintlifted,andiledananswerclaimingmistakenidentityalongwithadiscoverydemand.Theplaintiffneverprovideddocumentationofthedebt,andsixmonthslater,itdiscontinuedthecase. Ms. Warren isaParksDepartmentworker.ShewassuedbyPalisadesAcquisitionbasedonanoldSpiegeldebt. She had not made any purchases or payments on theaccount in more than 10 years and the claim was therefore beyond the statute oflimitations. MorethanayearafteraMELS lawyerappeared inthecaseandservedadiscoverydemand,theplaintiffhasyettoprovideanydocumentation.Ms.Warrenscasealsoillustratesthebarebonesnoticeofthelawsuitthatourclientstypicallyreceive.TheonlyinformationintheboilerplatesummonsandcomplaintwhichwasspeciictohercasewasanindicationthatSpiegelwastheoriginalcreditor.Therewasnoaccountnum-ber,dateofdefault,oranyotherinformationthatwouldfairlyapprisethedefendantofthenatureofthecase.

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When Plaintiffs respond to aDiscovery Demand:Debt Buyers Own Documentation Will LikelyProve the Defendants Case

Whentheplaintiffrespondedtoadiscoverydemand,itsresponsesanddocumentsgenerallydidnotsubstantiatethedebtonwhichithadsued.Infact,innumerousinstancesthedocumen-tationdemonstratedtheoppositethattheplaintiffwasnotentitledtoprevailonitsclaims.Defectsinthedocumentationtypicallyincludedafailuretoshowthatthedebtbuyerpossessedavalidassignmentestablishingthatitownedthedebtonwhichitwassuing,orthatthedebtwasclearlybeyondtheapplicablestatuteoflimitations.

InonematterinwhichMELSreceivedaninformalresponse,thelawyerfortheplaintiff,NorthStarCapitalAcquisitions,submittedaone-pagecomputerprintoutandacopyofacr cardstatementostensiblysenttothedefendantbyCapitalOneBank,theoriginalcr

editeditor,atoraboutthetimeofdefault.Ratherthansupporttheplaintiffsclaim,however,

the documentation showed that the debt was beyond the statute of limitations.

AnothercaseinwhichouroficereceivedaninformalresponsewasasuitbyadebtbuyerbasedonadebtallegedlyowedtoBankAmerica.The lawyer for the debt buyer submitteda sworn afidavit attesting to the sale of the debtto a different debt buyer. Uponourpointingoutthisratherobviousdefectintheplaintiffscase,theattorneyhastakennofur-theraction. OnematterinwhichMELSreceivedaformalresponsetoitsdiscoverydemandinvolvedasuitbyPalisadesCollectionbasedonanallegedAT&Twirelessaccount.However,thedocumentssubmittedbyPalisadesindicatedanassignmentfromadifferentcellphoneprovider,notAT&T.Inaddition,thedocumentsshowedthatthelawsuithadbeeniledmore than a year beyond the two-year statute of limitations applicable to wireless

services.

Inanothercase,theoriginalcreditorhadsupposedlyassignedthedefendantsaccoun-tanttoDebtBuyer1(CalvarySPVI),whohadthenassignedittoDebtBuyer2(CalvaryPortfolioServices),theplaintiffinthesuit.Theplaintiffprovidedacopyofbothassign-mentsinresponsetoadiscoverydemand.Examinationofthesedocumentsrevealed,how-ever,thattheassignmenttoDebtBuyer2pre-datedtheassignmenttoDebtBuyer1byfouryears.Thus, the plaintiffs documents showed that it did not even own the debtand had no standing to ile suit.

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Conclusion:

Wheres The Proof? Nowhere To Be Found andDebt Buyers Know ItThesheerweightofthenumbersinthestudyiscompelling.Debtbuyersareunabletopres-

entproofofdebts.Whyisitthatdebtbuyersrespondedtoourrequestsforsubstantiationinonly5.5%ofthecases?Wecanonlyconcludethatoneorbothofthefollowingareoccurringwiththefullknowledgeanddesignofdebtbuyers:

The debt buyer business model is geared solely toward default judgments. Plain-tiffs stop pursuing a lawsuit once a defendant retains a lawyer, and instead devotetheir resources to obtaining default judgments which do not go before a judge andrequire minimal if any proof.

Debt buyers do not possess the evidence to prove their claims in the irst place.

Eitherway,itissimplyunfairforconsumerstobesubjecte tosuchpractices.InAmerica,thecourtsexisttoadministerjusticeunderfundamentalstanddardsoffairplay.Fordebtbuy-erstousethecourtsastheircollectionsarmforunsupportedclaimssmacksofunfairness.

Ourclientsworkingpersonsorretireeswhoreceiveapaycheckorwhoseincomeconsistsofapensionandsocialsecuritysuffertremendouslyfromhavingtodefendbaselesslawsuits.Beingsuedentailsembarrassmentandharmtoonescreditrating.Beingsuedmeansenduringtheangstanduncertaintyofhavingtodefendoneselfinthelawsuit.Beingsuedinvolveswor-ryingabouttheimpactonfamilymembers.Whenourclientslearnofsuchlawsuitsonlyafterreceivingagarnishmentorbankrestraintnotice,theharmisevengreater.Thoseclientsandinourstudythereweremanywentforperiodsofuptothreeweekswithagarnishmentontheirsalaryand/orbeingdeprivedoftheuseoftheirbankaccounttopayrent,buyfoodandpurchaseothernecessities.

Itbearsnotingthatourclientsareactuallymorefortunatethanmostconsumers,whodonothavereadyaccesstolegalrepresentation.Thosepersonsareforcedtohireaprivatelawyerortrytoobtainalegalservicesattorney,bothofwhicharedificultpropositions.Lessthanone

7percentofdefendantsincollectioncasesinNewYorkCityarerepresentedbyalawyer.Theonlyotheroptionforconsumerdefendantsistoattempttonavigatethejudicialsystem

ontheirown.Thisisadauntingprospect.IfMELSlawyershavedificultyinobtainingsubstan-tiationofdebtsfromplaintiffs,itiseasytoimaginethenear-insurmountableobstaclesthatprosedefendantsface.

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Recommendations:Three Steps To Fix the Problem

Thefollowingthreerecommendationswouldgoalongwaytowardcurbingthepracticesindebtcollectionscasesthatthisstudyhasidentiied:

1. Prohibit a debt collector from iling a collection lawsuit unless it is in possession ofenough evidence, in a form admissible in court, to show that its claim is valid.

Thebasicinformationshouldincludesuchitemsaswhethertheplaintiffistheoriginalcreditor;ifnot,thenameoftheoriginalcreditorandallassignees originalaccountnumber(oridentiiableportionthereof);dateandamountoflastpayment;;andanitemizationoftheamountsought.Ifplaintiffsdonothavethisinformation,theyshouldnotbeburdeningcon-sumerswithlitigation.

Ideally,thisnationalproblemwillendwithanationalsolution.Precludingdebtcollectorsfromsuingunlesstheypossessthenecessarybasicinformationcouldbeaccomplishedinanumberofways,includingnewfederallegislationoramendmentstotheFairDebtCollectionPractcesAct(FDCPA).Anotheroptionwouldbetodeineasadeceptveandunfairtradepract

iice,bylaworregulation,theilingofalawsuitwithoutthesupportiinginformation.

2. Pass legislation in New York requiring a plaintiff in a debt collection action to pleadcertain basic information when it iles the lawsuit.

In2009,theNewYorkStateAssemblypassedlegislationthatwouldeffectivelyprotectconsumersagainstdebtcollectionlawsuitsthathavenobasis.UndertheConsumerCreditFairnessAct(CCFA),plantiffsinconsumercreditcollectionscaseswouldberequiredtosetforththebasicinformatiiondescribedabovewhentheycommencethelawsuit.Weapplaudthisbillandurgeitsadoptionbythefulllegislatureintheupcomingsession.

TheCCFAthusbarsthecourthousedoortodebtbuyerswhowouldsueconsumerswith-outtheevidencetosupporttheirclaims.Thatsasitshouldbe.3. Take effective steps to curb the common practice of debt buyers suing on debts that

are beyond the statute of limitations.SuingonadebtthatisbeyondthestatuteoflimitationsviolatestheFairDebtCollection

PracticesAct.However,consumeradvocatesnationallyreportthatcollectorsoftensueontime-barreddebt.UnderNewYorkprocedural law,thestatuteof limitationsmustbeas-sertedasanafirmativedefense norderforadefendanttogainitsbeneit.Whenaplaintiffobtainsadefaultjudgmentonatiime-barreddebt,orwhenadefendantappearsbutdoesnotknowtoraisethestatuteoflimitations,thenthedebtcollectorhaseffectivelycircumventedthestatuteoflimitations.

Inthestudysincesofewplaintiffsrespondedtothedemandfordiscoverywecouldnotcalculatethepercentageofcasesinwhichthedebtsuedonwasoutsidethestatuteoflimita-tions.Nonetheless,itwasclearinmanyinstancesthatthedebtwastime-barred.

Ourstudypointsoutthecompellingneedforeffectivelegislationtobepassedatthefed-eralorstateleveltopreventdebtbuyersfromsuingondebtsthatarebeyondthestatuteoflimitations.TheFDCPAshouldbestrengthenedtogiveteethtotheprohibitionagainstcreditorssuingontime-barreddebts.InNewYork,theConsumerCredtFairnessActwouldnotonlyshortenthestatuteoflimitationsinconsumercredittransactiions(tothreeyears),but- byendingtherighttosueondebtsthatarebeyondthestatuteoflimitations- wouldeliminatetheproblemofdefendantshavingtoafirmativelyraisethestatuteoflimitations.TheCCFAwouldthuseffectivelyhaltthepracticeofdebtcollectorscircumventingthestatuteoflimitations.

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Endnotes1Jim Dwyer, In Civil Court, One Nation Under Debt, N.Y. Times, Oct. 10, 2008; gure provided by Jus-tice Fern A. Fisher, Deputy Chief Administrative Judge, New York City Civil Courts, March, 2009.2Debt Weight: The Consumer Credit Crisis in New York City and Its Impact on the Working Poor, Urban Justice Center, Oct. 2007, http://www.urbanjustice.org/pdf/publications/CDP_Debt_Weight.pdf.; Jus-tice Disserved: A Preliminary Analysis of the Exceptionally Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York, MFY Legal Services, June, 2008, http://www.mfy.org/Justice_Disserved.pd). 3See National Consumer Law Center, Fair Debt Collection, p. 7-10 (6th ed., 2008).4

Collecting Consumer Debts: The Challenge of Change A Workshop Report, Federal Trade Commis-sion, Feb., 2009, http://www.ftc.govbcp/workshops/debtcollection/dcwr.pdf; Joel Stashenko, Service Concerns Prompt Bid to Reopen 100,000 Defaults, N.Y. Law Journal, July 23, 2009; Debt Weight, Urban Justice Center.5In its 2007 study, for instance, the Urban Justice Center analyzed cases in which the defendant failedto appear, due to sewer service or other reasons, and the documentation submitted by the plaintiffwhen it sought to enter a default judgment.6CPLR Rule 3133.7Debt Weight, Urban Justice Center, 16-17.

Documents

Wheres the Proof? (2009)