Missouri Attorney General Chris Koster wants a Supreme Court committee to alter court procedures surrounding debt collections. It’s an initiative that Koster says is an extension a public policy push emanating from the unrest in Ferguson.
During a press conference in St. Louis on Thursday, Koster told reporters that Missouri has seen a big spike in debt-collection litigation. He says some companies purchase debt from creditors at a steep discount and then use aggressive tactics to collect money.
“Frequently that means lawsuits that are filed very quickly in state court,” Koster said. “The problem is many of these suits have no legal merit. And their success depends on the debt buyers’ exploitation of the legal process to obtain judgments that they otherwise would not be entitled to. Oftentimes, these buyers file suits without proper documentation that the debt is even owed.”
In response to this phenomenon, Koster is suggested several amendments to the state’s rules of civil court procedures. He sent them to the Missouri Supreme Court’s Commission on Racial and Ethnic Fairness. They include:
- Making debt collectors provide documentation at the onset of litigation to pursue debt collection from somebody
- Limiting the number of times defendants have to appear in court to obtain a default judgment
- Restricting how debt collectors can recover attorneys’ fees.
“It is important to note that the proposals advanced today are aimed specifically at collection firms that are threatening or filing suit without legal justification,” Koster said. “When legitimate debts are owed, they should be paid. And the rules and regulations proposed will not impair the collection of debt that is properly documented and timely perused.
“But it is clear that some debt collection companies are co-opting the courts to recover nonexistent or questionable debts in our state by skirting ethical and legal obligations,” he added.
Legal Services of Eastern Missouri executive director Dan Glazier said that the proposed changes would be helpful to low-income individuals.
“We have seen, firsthand, clients as the attorney general just mentioned who are barely holding onto jobs that they badly need,” Glazier said. “They have to go back to court time and time again. Because if they miss a court date, they will lose their jobs.”
Debt collection agencies have received heightened scrutiny as of late. National publications such as ProPublica have highlighted how aggressive debt collection can be especially harmful to African-American St. Louisans. And changing debt collecting practices was part of a Ferguson Commission call to action related to ending “predatory lending.”
When asked why he waited until his seventh year in office to advocate for these types of changes, Koster replied: “I think that what has happened over the last year has really brought to the forefront – not just in St. Louis, but all over the country – inequities that we are trying to drill down and analyze at a heightened level.
“I think the experience of the last year has changed all of our attitudes and understandings,” Koster said. “And it’s putting the pressure on all of us to step up and do better in every aspect. Not just in public service, but journalism, policing and across the board.”
Koster said he hopes that the Supreme Court Commission can work through his suggestions in six to eight months.
