California Consumer Rights

Debt buyers such as Unifund, Atlantic Credit & Finance, First Resolution Investment, LVNV Funding, Palisades Acquisitions and Erin Capital Management face problems taking their cases to trial. These are companies that don’t issue credit cards but rather buy defaulted accounts and the right to collect the outstanding balance. While there is no lack of profit in this business, when a debt buyer files suit, their cases often have a fatal defect. They can’t prove they own the right to collect. That is, they often can’t prove the defendant owes THEM. Debt buying is done in massive quantities by computer. This means there is no “bill of sale” for the individual account on which they are suing, and without one, they can’t prove in court that they own the right to collect. Knowing this, when confronted by knowledgeable defense counsel, reality tends to set in as trial approaches.  Even if they should draw a sympathetic judge – one who won’t hold them to the proof the law requires –  and they win, they may be unable to collect  from a financially strapped defendant.  In short, as trial approaches,  debt buyers and their attorneys will look to get what they can, and if that number appears to be zero, to dismiss altogether.  Be warned though: All this only when pressed by knowledgeable defense counsel.  So don’t try this at home…..