Another published report in the mainstream media has highlighted the growing number of court cases that collectors are filing against individuals with nothing more than a passing reference from someone in the credit and collection industry and without addressing the underlying root cause of the issue: that individuals are tougher to reach than ever before and companies are turning to lawsuits as a last resort.
“The economy is booming. So why are credit card debt cases clogging Texas courts?” blares a headline in the Houston Chronicle, which looks at the plight of a disabled law enforcement official, who fell behind on her credit cards and is being sued. She did not appear for her hearing and a default judgment was entered against her, just one of a growing number of lawsuits that have been filed in her neck of the woods. The number of suits filed in Texas has increased 140% in the past five years, according to the report. One judge commented on the increase in the number of small-balance cases, where the individual owes less than $1,000.
But other than a couple of passing comments from a spokeswoman at PRA Group, the article is entirely silent on the root-cause of the problem. Which is the same thing that happened earlier this month in an article from The Wall Street Journal.
What is also interesting about these articles is that they always seem to position the individual being sued as going up against some huge multi-national corporation that puts profits before people. And while there are a handful of really large companies in the industry who do employ a legal strategy when collecting, the majority of collection agencies are very small companies, whose hands are being forced into suing because consumers don’t respond to phone calls or letters.
It’s unlikely that the industry will ever turn public opinion in its favor, but all companies in the industry should feel a responsibility to try and educate as many people as possible about the important role they play in the credit lifecycle and why more companies are being forced into filing lawsuits. It might not change much, but it’s definitely worth the effort.
