AARP is asking the Ohio Supreme Court to sanction a debt collector for bringing a lawsuit that the debtor alleges had no basis in the law and sought damages that were well in excess of those permitted by law. AARP is concerned that many debtors fall prey to aggressive tactics such as these and will find themselves paying massive debts they do not owe, forcing them to choose between food, shelter, medical care and payment of debts that actually do not exist.
First Resolution is a debt collection firm that sued Sandra J. Taylor Jarvis to collect on a credit card debt it had purchased from Chase Bank. Jarvis filed claims against First Resolution, alleging that it had engaged in deceptive practices illegal under Ohio and federal law, the suit was barred by the statute of limitations stated in the underlying credit contract, and it sought to collect an interest rate on the allegedly overdue funds of 24 percent, which was well in excess of that permitted by law.
First Resolution withdrew its suit and the court dismissed Jarvis’ counter claims. Jarvis appealed in order to get a judgment regarding First Resolution’s allegedly deceptive practices.
AARP Foundation Litigation attorneys filed AARP’s friend-of-the-court brief on behalf of Jarvis detailing the deceptive practices used by debt collectors, the dangers these pose – particularly to older consumers and those on fixed incomes – that literally can be life threatening when a debtor is forced to choose between paying for food, shelter, medical needs, or debt. The brief also discusses the business practices in the debt collection industry and its built in incentives for abuse. Numerous studies show that collectors often do not have sufficient evidence to support claims yet clog the courts with hundreds of thousands of collection lawsuits every year, knowing the vast majority of the judgments will be granted by default. Commonly, old debt is purchased in portfolios containing masses of accounts with each individual account costing only a few cents on the dollar. The incentives are to press forward with cases regardless of the validity, practices which harm consumers as well as courts.
What’s at Stake
AARP has participated in other cases advocating for the interests of victims of debt collection abuses because the issues of abuse in the debt collection industry especially impact older people. People age 50 and above are incurring and amassing increasingly unaffordable levels of debt, often triggered by the need for immediate cash due to medical treatment. Older people are also extremely vulnerable to the tactics of and threats made by debt collection agencies and are fearful of challenging debts even if those debts are erroneous, old, or had actually been paid off. The bad data, record keeping, and collections practices in the debt collection industry cause consumer abuses of significant concern, particularly in a down economy where collectors are more zealous and debtors have even fewer resources.
Jarvis v. First Resolution is before the Ohio Supreme Court, the state’s highest court.