Computer-generated debt claims clogging courts
Thursday, July 22, 2010
I missed this story when it first cropped up last week in the New York Times, but it poses an interesting question: When is access to the courts too easy?
The Times reported on a debt-collection trend in which the 14-lawyer Cohen & Slamowitz firm in Woodbury, N.Y., files 80,000 lawsuits in a single year — or 5,700 per lawyer. All of them are debt-collection claims, and their preparation and filing is automated using computer software. Says the Times:
While many of the cases represent legitimate claims, critics say the lawsuits are too often based on inaccurate or incomplete information about the debtor or the amount owed.
Already, some state legislators and judges have tried to crack down on collection lawsuits, and on Monday, the Federal Trade Commission weighed in, saying the system for resolving disputes over consumer debts was broken and in need of “significant reforms.”
There isn’t much the FTC can do, since most of the cases are state-level and largely out of its jurisdiction. Some critics would like to require that the filing law firms include more details in the claims, to help separate the legitimate from the automatic. More reasonable to me would be to bar the robo-filing and require the cases to be prepared and filed by a human being, not a software program.
In the end, this seems less like an access-to-courts issue and more of an abuse of technology to target consumers — many of whom don’t owe the debts at issue, but wind up with default judgments because of insufficient notice of the court date.