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Ruling could affect the way debt collectors do business

Jan 06, 2011 Kyle Duncan

Ruling could affect the way debt collectors do business
The ruling from Federal Circuit Court judge Denny Chin could have a significant impact on the way debt collection agencies conduct their skip tracing methods, AOL Daily Finance reports.
 The companies named in the case were accused of circumventing standard debt collection practices by forging lawsuits, but never informing the target, which would lead to frozen bank accounts, Daily Finance details. Chin was tipped off when a document revealed that one of the accused law firms signed 40,000 affidavits stating the accuracy of debts collected, even though the paper trail supporting such statements gave them no legitimacy. "Assuming 260 business days a year, [the employee] had to have personally (and
purportedly knowledgeably) issued an average of 20 affidavits of merit per hour, i.e., one every three minutes, over a continuous eight-hour day," Chin wrote in his decision. Chin's decision to rule in favor of the plaintiff, which accused a law firm, a process-serving company and a debt-buying company of illegitimate practices, could open the door for such enterprises to be charged under the Racketeer Influenced Corruption Organization law. The judge heard the case because it was a violation of the Fair Debt Collection Practices Act.