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Collection Services Law Firm Faces Paying Costs for Misidentifying Defendant
With so many debtors trying to duck their obligations by skipping, collection services have no choice but to track them down using public, and commercial databases. This digital route is the only cost effective way of finding a whole lot of people who'd really prefer not to be found.
Collection Agency Services' Bottom Lines under Threat
But it's not infallible. In fact, it's a numbers game, and as such throws up errors more often than anyone--most of all those in collection agencies--would like. Misidentifications are inconvenient for the innocent citizen who's accused of avoiding debts, but it's also a costly waste of resources for collectors, who have to follow up unproductive leads with letters, phone calls, and ultimately court cases.
But if a controversial New York judge gets his way, misidentifications could be about to become a great deal more costly for collection services in the state. In fact, if his idea gains ground, it could threaten the profitability of the local industry.
Collections Agencies Make Mistakes
According to a recent story in the New York Times, Mark Hoyte ran up a sizable balance on his Sears-Citi credit card. And, by the time he was called by Pressler and Pressler--a venerable firm of attorneys, which operates out of sleek, modern offices in Parsippany, New Jersey--the debt was over $900.
Trouble is, the attorneys' agent called the wrong Mark Hoyte. The name was correct, and--presumably--the agent didn't believe the wholly innocent man when he said that his date of birth, and social security number were different from the debtor's. So the wrong Mr. Hoyte received a summons.
It was all quickly resolved when he turned up outside the courtroom, and met the plaintiff's attorney, T. Andy Wang (who appears not to be an employee of Pressler and Pressler). The two parties agreed that it was all a mistake, and went into court to tell the judge. But Judge Noach Dear wasn't prepared to leave the matter there.
Hard Cases Make Bad Law
His Honor questioned Mr. Wang about the chain of events that led up to the mistaken identification, and clearly wasn't satisfied with the answers he received. He then asked Mr. Hoyte, a building supervisor, how much he was out of pocket by losing a day's pay, and was told $115.
Mr. Wang resisted the idea of compensating the defendant for his loss, and cross-examined Mr. Hoyte about his failure to send written proof of his identity to Pressler and Pressler. Still, the judge was not satisfied, and told both parties to return to court in the new year. He said that, if compensation had not been agreed by then, he would consider holding a sanctions hearing. This could result in the law firm being forced to make a payout to the defendant.
Of course, this is just one case before one--relatively junior--judge in one civil court in one state. Other judges in the same jurisdiction, let alone in others, are unlikely to feel bound to follow Judge Dear's precedent. But the possible ramifications are still worrying.
Populist Politics
Before he was elected to the bench, Noach Dear, a Democrat, was a councilman, and candidate for state senate. Presumably, he is an astute political operator. Indeed, he won his judgeship in spite of being designated by both the Brooklyn and New York City bar associations as 'not approved', which itself takes a certain amount of political acumen.
In these circumstances, it is possible to suspect that his honor may view Mr. Hoyte's case as a minor cause célèbre. Collection agencies are hardly flavor of the month at the moment. Consumer complaints are running at record levels, and legislators are itching to beef up regulation of the industry.
Right now, any move against the bill collection business is likely to be populist, and popular. And that's a tempting prospect for any elected official.
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