Missouri Attorney General Chris Koster Launches Crackdown On Tactics By Abusive Debt Collectors

Missouri Attorney General Chris Koster announced today a massive crackdown to protect individuals from abusive debt collectors.

The problem his office faces is that there are no state laws in Missouri to protect individuals from abusive debt collectors. Under current conditions a consumer’s only option to fight abusive debt collectors federal court using federal consumer protection laws.

According to Fox4kc.com, research by Pew Charitable Trusts, eight out of ten Americans credit card, student loans or a mortgage debt.

In his report to the Missouri Supreme Court’s Commission on Racial and Ethnic Fairness, Koster’s office also claims minorities are often the main target of abusive debt collectors because according to research, they tend to owe more than whites and are unfamiliar with consumer protection laws.

Koster outlined three proposed amendments to Missouri’s rules of civil court procedure aimed at curbing litigation used by abusive debt collectors:

1. Require debt collectors to produce documentary proof at the outset of litigation establishing their right to pursue collection of the debt in question.  This would help prevent invalid and frivolous lawsuits.
2. Preclude debt buyers from manipulating court procedures with stalling tactics in which they repeatedly request consumers to appear in court hoping to obtain a default judgment the first time the consumer misses a court date. 
3. This tactic permits debt collectors to recover on debt without presenting evidence to the court or allowing the targeted consumer to challenge that evidence.  The proposed change would protect consumers by limiting the circumstances in which a default judgment could be granted.
4. Strengthen the proof needed before creditors can recover for attorneys’ fees and litigation costs by requiring that creditors’ attorneys attest that the fees sought were contractually authorized, necessary, and actually performed to recover on the debt, and that costs claimed were legitimate.   This would temper unjustified and excessive awards of attorneys’ fees and litigation costs.

“These proposed changes would provide important protections for consumers from the Wild West world of debt-collection by forestalling abusive litigation practices, including frivolous litigation.  I believe these reforms would also serve as an important step toward eliminating the disparate impact of debt-collection litigation on minorities who become targets of such litigation.”