Sections of a new proposal from Missouri Attorney General Chris Koster to curb debt collection practices he believes are abusive has the support of the Missouri Collectors Association.
Nick Jarman, president and chief operating officer at Delta Outsource Group and an ACA International board member, said the Missouri Collectors Association agrees that deceptive and unlawful practices shouldn’t be tolerated in the collection industry.
ACA, the larger association representing collection agencies, plans to continue reviewing Koster’s proposal and proactively seek ways to work with his office to improve various ideas already put forth.
Koster announced plans last week to reform court rules surrounding collection lawsuits. The proposal would require debt collectors to prove at the start of litigation that they have the right to collect the debt in question, limit the circumstances allowing courts to grant a default judgment to debt buyers and increase the proof needed for creditors to recover attorney’s fees and litigation costs.
Koster further wants to stop the practice of collectors repeatedly asking consumers to appear in court, since frequent court dates are costly and make it difficult to hold a job.
Koster's proposal states that he believes some collection practices unfairly target minority and low-income residents. Those concerns were raised by the Missouri Supreme Court’s Commission on Racial and Ethnic Fairness during a review of racial disparities following the 2014 fatal shooting of Michael Brown in Ferguson, Mo.
Koster had sent a letter to the court commission seeking changes in court rules that he believes will help prevent what he calls unscrupulous collection practices. The commission, convened by Gov. Jay Nixon, cited overzealous debt collection as among the issues that needed to be addressed.
The AG’s office received 1,217 complaints about debt collection issues last year. Koster, a Democrat who’s running for governor in 2016, said Missouri and the rest of the nation has seen a dramatic rise over the last decade in collection litigation. "Enforcement actions for violating the rules could include criminal lawsuits or civil suits brought by the attorney general’s office or private counsel," according to a press release from the attorney general.
The collection industry commonly states that legitimate debt collectors aren't the problem and that it’s a small number of nefarious agencies creating issues. Also, the industry points out that it’s already illegal at the federal level to threaten a lawsuit or arrest when trying to collect debt from a consumer.
