Townsend v Midland Funding Maryland Court Fails to Uphold Debtor Pro
Townsend v. Midland Funding, Maryland Court Fails to Uphold Debtor Pro... Legal Advocacy
Unfortunately, most people do not know how to defend themselves against bogus debt collection lawsuits. Even if they try to defend themselves, they have no way to prove they don’t owe a debt or that the amount being sought is wrong. Knowing that a court judgment will lower their credit score or make it hard to get a job or apartment, some people agree to pay debts they do not owe.
This case arose from a judgment entered in a small claims court trial, in which a debt buyer submitted business records into evidence based only on a sworn affidavit. The small claims court allowed the documents into evidence without a witness because the normal rules of evidence which would require a witness to testify and to be subject to cross examination, do not apply in small claims court. That ruling was appealed to Maryland’s highest Court, which affirmed the judgment.
AARP Foundation Litigation attorneys had filed a friend-of-the-court brief for AARP and seven other consumer protection organizations urging the Court, to protect alleged debtors by requiring debt buyers to prove through reliable, admissible evidence that they are suing the right person for the right amount. The brief detailed overwhelming evidence that debt buyer lawsuits are often obtained through fraud on the courts because they are based on inherently unreliable information. The ability to cross examine a witness has been viewed for centuries as essential to protect against erroneous judgments.
Maryland Court Fails to Uphold Debtor Protections
Read AARP's (PDF) A case before Maryland’s highest court asked whether judgment can be entered in small claims court without a witness who has personal knowledge of the debt. The court answer: Yes.Background
To get uncollectible assets off their books, banks often sell to debt buyers the right to collect on large portfolios of delinquent debt. The sale provides the buyer with an unprotected electronic spreadsheet that lists only bare bones information, such as a name, address, balance, and last payment date, but no account documents to substantiate the amount or terms of the debt. Debt buyers pay only pennies on the dollar because they don’t purchase any documentation about the account and the spreadsheets are known to be unreliable. They include amounts that resulted from identity theft, was never owed by the person named in the spreadsheet, was already paid, or was discharged in bankruptcy. Often the debt is so old that it can’t be collected in court because the statute of limitations has run. Debt buyers nevertheless file millions of lawsuits worth billions of dollars, supported by affidavits that falsely swear that the facts are accurate and reliable.Unfortunately, most people do not know how to defend themselves against bogus debt collection lawsuits. Even if they try to defend themselves, they have no way to prove they don’t owe a debt or that the amount being sought is wrong. Knowing that a court judgment will lower their credit score or make it hard to get a job or apartment, some people agree to pay debts they do not owe.
This case arose from a judgment entered in a small claims court trial, in which a debt buyer submitted business records into evidence based only on a sworn affidavit. The small claims court allowed the documents into evidence without a witness because the normal rules of evidence which would require a witness to testify and to be subject to cross examination, do not apply in small claims court. That ruling was appealed to Maryland’s highest Court, which affirmed the judgment.
AARP Foundation Litigation attorneys had filed a friend-of-the-court brief for AARP and seven other consumer protection organizations urging the Court, to protect alleged debtors by requiring debt buyers to prove through reliable, admissible evidence that they are suing the right person for the right amount. The brief detailed overwhelming evidence that debt buyer lawsuits are often obtained through fraud on the courts because they are based on inherently unreliable information. The ability to cross examine a witness has been viewed for centuries as essential to protect against erroneous judgments.