Debt Collection Survival
I was reviewing some sample Interrogatories a defendant debtor might send to a third-party debt buyer plaintiff suing to collect a defaulted credit card debt. Several Interrogatories asked the debt-collector plaintiff for personal identification information about the defendant, such as date of birth and social security number.
There are several potential reasons why a defendant debtor might request personal identification information about themselves from a third-party debt buyer plaintiff in the context of a debt collection lawsuit. The fundamental issues are
- whether the debt collector is suing the right person, and
- whether the account information is reliable.
1. Challenging the Plaintiff’s Ability to Identify the Debtor – By requesting the defendant’s date of birth, Social Security number, or other personal information, the defendant might be testing whether the debt buyer actually possesses accurate identifying details. Many debt buyers purchase portfolios of charged-off debts in bulk, often with incomplete or inaccurate information. If the plaintiff cannot correctly identify the debtor, it raises questions about the reliability of their records and whether they have sued the correct person.
2. Disputing Ownership of the Debt – A defendant might suspect that the plaintiff has mistaken them for someone else with a similar name or other identifying characteristics. If the plaintiff cannot match the defendant’s personal identifiers to their records, this could support a defense of mistaken identity or lack of standing to collect.
3. Attacking the Chain of Assignment – Debt buyers frequently acquire debts through multiple assignments, sometimes passing through several intermediaries. The accuracy of the personal identifying information in each assignment record can be crucial in demonstrating whether the plaintiff truly owns the specific debt in question. If different entities recorded conflicting information, the defendant can argue that the plaintiff’s claim is unreliable.
4. Forcing the Plaintiff to Prove Standing – In many jurisdictions, a debt collector must prove they own the specific debt they are suing to collect. If the plaintiff cannot produce records that match the defendant’s identifying details, the defendant can argue that the plaintiff lacks standing and should not be permitted to pursue the claim.
5. Spotting Data Discrepancies – If the plaintiff provides identifying information that is incorrect or inconsistent with what the defendant knows to be true, it may indicate data errors that undermine the credibility of the plaintiff’s case. This could be useful in arguing that the plaintiff’s records are unreliable or that they are attempting to collect from the wrong person.
6. Evaluating Compliance with Consumer Protection Laws – The Fair Debt Collection Practices Act (FDCPA) and other consumer protection laws impose requirements on debt collectors, including obligations to verify debts when challenged. If the plaintiff cannot provide the correct identifying information, it may suggest violations of such laws, which the defendant could use to counterclaim or seek dismissal.
7. Exposing Potential Identity Theft or Fraudulent Transactions – If the defendant did not open the account or did not authorize the debt, obtaining the plaintiff’s records may help identify potential fraud or identity theft. If the plaintiff’s records show an incorrect date of birth or Social Security number, it might support a defense that the debt does not belong to the defendant.
What other personal information might also be useful for these purposes?
In addition to date of birth and Social Security number, a defendant might request other personal identification information from a third-party debt buyer plaintiff to serve the same purposes (e.g., challenging identity, ownership, and chain of title). Some potentially useful pieces of personal information include:
Basic Identifiers
1. Full Legal Name – Useful for verifying whether the plaintiff has sued the correct person, especially in cases of common names.
2. Aliases or Prior Names – If the defendant has used other names (e.g., maiden name, former married name), this can help determine whether the plaintiff’s records are accurate.
Address and Residency Information
3. Current and Previous Addresses – Helps verify whether the alleged debt was incurred by the defendant and whether the plaintiff's records correctly track the debtor's location over time.
4. Billing Address on the Alleged Account – If the debt buyer’s records show an unfamiliar address, the defendant may argue that the debt does not belong to them.
5. State of Residence at the Time of Account Opening – Could be used to raise jurisdictional defenses or to argue that another state's statute of limitations applies.
Employment and Income-Related Information
6. Employer(s) at the Time of Account Opening and Default – Can help the defendant determine if the debt was tied to their actual employment history, which may be relevant in cases of mistaken identity or fraud.
7. Occupation and Salary Information – If the plaintiff’s records include inaccurate employment details, it may indicate unreliable data.
Account-Specific Information
8. Account Number (Last Four Digits at a Minimum) – Helps verify whether the defendant ever had an account matching the alleged debt.
9. Date of Account Opening – Useful in cases where the defendant does not recognize the debt or believes the statute of limitations has expired.
10. Date of Last Payment – Critical for determining whether the statute of limitations has run and whether the plaintiff's records are accurate.
11. Amount of Alleged Debt at Charge-Off – Can be compared with account statements or other records to check for errors or inconsistencies.
Financial Institution and Creditor Information
12. Original Creditor's Name – If the defendant has never had an account with the listed creditor, this could be used to dispute liability.
13. Account Holder or Co-Signer Information – Could help determine if someone else was responsible for the debt or if identity theft occurred.
Legal and Collection-Related Information
14. Date of Sale/Assignment of Debt – Helps track whether the debt buyer actually obtained legal ownership and whether they can prove standing.
15. Chain of Assignment and Prior Owners of the Debt – Useful for challenging whether the plaintiff has clear legal title.
16. Communications History – If the plaintiff claims to have sent notices or settlement offers, verifying the recipient and delivery method can be important.
Miscellaneous Information
17. IP Address or Electronic Signature Used for Account Setup – Can help in fraud or identity theft cases.
18. Security Questions and Answers Used for the Account – If the defendant never set up the account, the answers may not match.
19. Phone Numbers Associated with the Account – If the plaintiff's records contain numbers the defendant never used, this could be used to challenge accuracy.
Strategic Purpose of Requesting This Information
By asking for this information, the defendant:
- Forces the plaintiff to prove they have correct, complete records.
- Identifies errors, gaps, or contradictions that undermine the plaintiff’s case.
- Raises doubts about standing or the chain of assignment.
- Creates leverage for a stronger defense or settlement negotiations.
What is the legal reasoning to support a dismissal of the collection action for violations of consumer protection laws?
• The legal reasoning to support a dismissal of a debt collection lawsuit due to violations of consumer protection laws generally relies on the principle that a plaintiff must establish standing, meet legal evidentiary burdens, and comply with procedural and substantive regulations governing debt collection. If the plaintiff fails in these areas—especially due to violations of the Fair Debt Collection Practices Act (FDCPA), state consumer protection laws, or court rules—the defendant may argue for dismissal.
• Here are some specific legal arguments and examples:
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1. Lack of Standing – Failure to Prove Ownership of the Debt
• Legal Reasoning: Debt buyers must prove they have the legal right to sue by establishing a valid chain of title (a complete record of assignments from the original creditor to the current plaintiff). If they cannot do so, they lack standing.
• Consumer Protection Angle: Many states impose strict requirements on debt buyers to demonstrate ownership through proper documentation. If the debt buyer lacks sufficient evidence, the court may dismiss the case.
• Example:
o Midland Funding LLC v. Johnson, 137 S. Ct. 1407 (2017) – The Supreme Court discussed how debt buyers frequently purchase debts with little documentation. If a defendant challenges the plaintiff’s standing and the debt buyer fails to produce sufficient records, dismissal may be warranted.
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2. Violation of the Fair Debt Collection Practices Act (FDCPA)
• Legal Reasoning: The FDCPA (15 U.S.C. § 1692 et seq.) prohibits false, deceptive, or misleading representations in connection with the collection of a debt. If a debt buyer sues with incorrect identifying information, the defendant may argue that the lawsuit itself constitutes an unfair or deceptive practice.
• Potential Violations Leading to Dismissal:
o Suing the Wrong Person (§ 1692e, § 1692f) – If the plaintiff cannot prove the defendant is the actual debtor, they risk violating the FDCPA.
o Misrepresenting the Debt Amount (§ 1692e(2)(A)) – If the plaintiff provides inaccurate details about the debt’s amount, balance, or history, this may warrant dismissal.
o Filing Suit Without Proper Documentation (§ 1692e(10)) – If the debt buyer lacks a proper paper trail, the defendant can argue that the lawsuit itself is deceptive.
• Example:
o McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939 (9th Cir. 2011) – A debt collection law firm sued a consumer without adequate documentation. The court found the collection attempt violated the FDCPA. If the violation is severe enough, courts may dismiss the case or allow counterclaims.
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3. Violation of State Debt Collection Laws
• Legal Reasoning: Many states have stricter consumer protection laws than the FDCPA, requiring debt collectors to provide specific documentation before filing suit. If the plaintiff cannot provide the required information, the defendant can move for dismissal.
• Examples:
o California – Fair Debt Buying Practices Act (FDBPA) (Cal. Civ. Code § 1788.50 et seq.)
Requires debt buyers to have detailed documentation proving ownership before suing. If they lack it, the case may be dismissed.
o New York – Debt Collection Regulations (22 NYCRR § 208.14-a)
Requires debt buyers to prove standing with original creditor affidavits. A failure to do so may lead to dismissal.
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4. Statute of Limitations Defense
• Legal Reasoning: If the debt is past the statute of limitations, the plaintiff’s attempt to collect is unlawful, and the case must be dismissed.
• Consumer Protection Angle: Debt buyers frequently sue on time-barred debts, which can constitute an FDCPA violation under § 1692e (false representation of debt’s enforceability) and § 1692f (unfair practices).
• Example:
o Portfolio Recovery Associates, LLC v. King, 927 N.Y.S.2d 860 (2011) – A court dismissed a debt collection lawsuit because the debt was past the statute of limitations. The defendant successfully argued that the plaintiff’s attempt to collect a time-barred debt violated consumer protection laws.
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5. Failure to Comply with Court Procedural Rules
• Legal Reasoning: If a debt collector fails to meet court procedural requirements—such as properly serving the defendant, filing sufficient documentation, or proving ownership—the case can be dismissed.
• Examples:
o Lack of Proper Service – If the defendant was not properly notified of the lawsuit, they can move for dismissal.
o Failure to Provide Required Evidence – Some courts require plaintiffs to attach copies of the contract, charge-off statements, or assignment documents with the initial filing. Failure to do so may lead to dismissal.
• Example:
o CACH, LLC v. Askew, 358 P.3d 58 (Colo. 2015) – The Colorado Supreme Court ruled that a debt buyer’s failure to provide sufficient evidence of debt ownership warranted dismissal.
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6. Unfair or Deceptive Acts and Practices (UDAP) Violations
• Legal Reasoning: Many states have broad consumer protection statutes prohibiting unfair or deceptive acts (often called UDAP laws). If a plaintiff files a lawsuit with inaccurate, misleading, or incomplete information, it could be dismissed as an unfair business practice.
• Examples:
o Texas Deceptive Trade Practices Act (DTPA) – Debt collection lawsuits based on false or deceptive records can be dismissed and may lead to counterclaims.
o Massachusetts Consumer Protection Act (M.G.L. c. 93A) – A debt collector that files suit with insufficient proof may violate consumer protection laws.
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How Can a Defendant Use These Arguments?
• A defendant facing a debt collection lawsuit can file:
1. A Motion to Dismiss (MTD) – Argues that the plaintiff has no legal claim because of standing, failure to prove ownership, statute of limitations, or procedural deficiencies.
2. A Motion for Summary Judgment – If the plaintiff’s evidence is insufficient, the defendant can argue that no genuine dispute of material fact exists, warranting dismissal.
3. An Affirmative Defense – The defendant raises FDCPA or state law violations in their response.
4. A Counterclaim – The defendant can sue the plaintiff for FDCPA violations, potentially leading to dismissal and damages.
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Conclusion
• A debt collection lawsuit may be dismissed if the plaintiff fails to prove standing, violates consumer protection laws, or does not follow court rules. Common legal bases include:
• Failure to prove ownership of the debt
• Violations of the FDCPA (false, deceptive, or unfair practices)
• Failure to comply with state laws requiring documentation
• Filing suit on time-barred debt
• Procedural defects (lack of proper service, missing evidence)
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