A poor credit rating doesn’t always mean a person is irresponsible. Low credit scores are often due to factors outside of someone’s control. There are cases of mistaken or stolen identity, cases where credit behavior was not irresponsible but was still factored in negatively to the credit score, and simple cases of falling on hard times. And now a new problem is causing people poor credit scores at no fault of their own.
Around the country, every day, hundreds of thousands of debt collection court cases are tried. And every day, over half of the people being sued for debt collection are not even present at their own hearing. Many of these people have not been properly notified. Others do not come to court out of fear or because of a lack of resources to properly fight the case. According to the New York Times article “RoboRedux,” it is estimated that as much as 95 percent of these court proceedings find in favor of the bank and debt collectors by default.
Perhaps a default judgment in favor of the bank isn’t such a bad thing. If the person being sued didn’t owe anything there wouldn’t be any need for the case in the first place, right? That’s what we’d like to think. But the New York Times reports that many of these suits bring erroneous charges against innocent people.
Noach Dear, a civil court judge in Brooklyn, said “I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt.” Much of the evidence that is brought against the defendant is faulty. The evidence can be faulty documents, faulty records, and sketchy testimonies.
Much of the debt that banks are bringing to dispute has already been discharged through bankruptcy or has already been collected by the bank. And in cases where the defendant does still owe debt, this debt is often increased with unrealistic fees.
Consequences of these cases may go farther than the default judgment. After a judge rules in favor of the bank, the bank is then permitted to freeze bank accounts, garnish wages, or file tax liens. The court’s judgment appears on the defendant’s account for up to twenty years and brings the individual’s credit rating down. Credit may also be hurt because funds may be seized that would have been used to satisfy other debt. These companies are given carte blanche access to financially devastate potentially innocent consumers.
Advise to consumers: To protect yourself against these fraudulent collections and attacks on your credit score, always keep track of your debt. Be fully knowledgeable of what you do and do not owe. Read over any notices you receive claiming you owe more money and if you notice you are being charged for something that has already been settled, attend your court proceedings. Don’t be too intimidated to fight for your credit score!
If your credit score is currently recovering and you need to seek new sources of credit to build it, please call us about an auto loan today.