Public Employee Press

Union fights unscrupulous debt collectors

An unscrupulous debt collection industry regularly victimizes DC 37 members and millions of U.S. consumers by suing for debts that may not even exist.

Debt collectors and buyers purchase debts, mostly from credit card companies, and go to court to garnish paychecks and freeze the bank accounts of the alleged debtors.

But when DC 37's Municipal Employees Legal Services studied 238 recent cases where members were sued for debts, the union lawyers found that an astounding 94.5 percent of the time, the firms failed to substantiate the debt.

"We continue to see cases where the debt buyer has no documentation at all," said MELS Associate Director Robert Martin. "Often they sue on debts that are beyond the statute of limitations and they even sue the wrong person."

Local 1597 member Ernest L. Taylor is a prime example. He recently had his salary garnished by a debt buyer, represented by the debt collection law firm Rubin and Rothman, LLC.

"I was shocked when I saw my paycheck," said Taylor, a Custodial Assistant at the Dept. of Health. He and MELS lawyer Karen Robinson confronted the company and pointed to serious discrepancies. The Ernest L. Taylor the company was suing lived in White Plains, while the DC 37 member was from the Bronx and had never lived in White Plains. Robinson got all of his money back.

"It can be confusing, because the collection and litigation are sometimes totally separate," said Robinson.

DC 37 and consumer advocacy groups are fighting back. The union is pressing for the state Consumer Credit Fairness Act, which would require debt collectors to have proof in hand before they file a lawsuit. The bill passed the Assembly this year but died in the Senate; it will be reintroduced next year.

The Federal Trade Commission ruled in October that for-profit companies that sell debt relief services over the telephone may no longer charge a fee before they settle or reduce a customer's debt. "Stay away from these companies," warns Martin.

In addition, several local judges are beginning to question the legitimacy of the thousands of claims filed by debt collectors. In April, a Manhattan appeals court threw out a credit card case, saying a debt collection company had sued the wrong person but pursued the case anyway. Brooklyn Civil Court Judge Noach Dear has recently written decisions that come close to saying that some collection cases are based on falsehoods.

Martin advises members to call MELS immediately if they receive a summons from a creditor and not to allow a debt collector into talking you into paying on an old debt.

"This is very serious," said Taylor after he won his case. "I hope people realize that. I was fortunate because I had help from my union."

Members can contact MELS for assistance at 212-815-1111.

— Alfredo Alvarado