Legislation introduced by Congressman Alex Mooney (R-WV-2), and being considered in a U.S. House of Representatives Committee this week, would exempt attorneys and law firms from rules designed to protect West Virginians from abusive debt collection practices. As attorneys we know that this legislation is tragically misguided.
H.R. 5082, the Practice of Law Technical Clarification Act of 2018, would severely weaken the federal Fair Debt Collection Practices Act by carving out an exception, just for attorneys that immunizes them from liability when they abuse the debt collection process in court. It would also prevent the Consumer Financial Protection Bureau from exercising its supervisory and enforcement authority over lawyers and firms engaged in abusive debt collection practices.
According to the Urban Institute’s findings, 42 percent of West Virginians have debts in collections, nearly 10 points above the national average. More than half of the residents of Braxton and Clay counties, in Representative Mooney’s district, have debts in collections. If his bill should pass, hundreds of thousands of West Virginians will likely be exposed to harmful and aggressive debt collection practices previously made illegal under federal law.
Every year thousands of cases are filed in the courts against West Virginia consumers to collect debts. The majority of these cases are filed by lawyers representing debt buyers— out-of-state businesses that buy delinquent debts for pennies on the dollar. Many of the debts cannot be verified as actually owed by a particular defendant, or include inflated amounts due, or indeed, have already been completely satisfied. Yet consumers rarely have the resources to contest these cases. As a result, many cases result in a default judgment for the collector, allowing the debt buyers to seize the assets and wages of the consumer-defendant. These judgments will generally have a long-lasting impact on the consumer’s credit report, making it more difficult for consumers to obtain housing, a loan, find a job or even secure insurance.
Some Recent Examples of Abuses Against West Virginia Consumers Include
Parents being harassed and threatened for debts owed by their adult child
A bank foreclosed on the wrong property and took the owners’ furniture, clothes and other belongings to the town dump--and it was the wrong house!
Harassing a woman for debts she did not owe after her identity was stolen
Debt collectors lying to consumers by telling them to pay up or the police were on their way to arrest them if they didn't pay in full immediately
Consumer getting sued for a medical debt she had already paid in full
The current federal consumer protection law provides a remedy for consumers who have been abused in these ways, and allows them to sue lawyers who bring these cases in unfair, deceptive, or abusive ways.
But Congressman Mooney’s bill—H.R. 5082—eliminates these protections for consumers, simply for the benefit of the attorneys who are hurting consumers. If it passes, his bill would allow lawyers to subject West Virginians to numerous unfair litigation tactics currently prohibited under this federal law. In short, Congressman Mooney’s bill will hurt those he is supposed to represent.
This effort to shield attorneys and law firms from the consequences of breaking the law will come at the expense of West Virginia consumers, their families, and the majority of debt collectors and attorneys that abide by the law.
Lawyers occupy a privileged role in our justice system and should be held to the highest ethical and professional standards. For that reason, to support West Virginia consumers and ethical attorneys engaged in debt collection, we urge Rep. Mooney to pull his support for this bad bill.
--Jason Causey, of Bordas and Bordas, represents consumers throughout West Virginia and Ohio; Margot Saunders, who lives in Hurricane, WV, has been an attorney with the National Consumer Law Center for over 25 years, a national public interest law firm representing low-income consumers before Congress and the federal agencies.
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