Protecting Consumers from Zombie-Debt Collectors
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By obtaining judgments, or persuading consumers to pay a portion of these debts, acknowledge these debts, or enter into new agreements, collectors can resurrect and enforce dead or non-existent debts. The media has labeled these resurrected debts as "zombie debts." Just as the zombies in movies come back from the dead to terrorize individuals, dead debts may resurface to wreak havoc on consumers. Even if a consumer successfully defeats one zombie-debt collector, the process may restart if the debt is resold. Legal scholarship has only begun to address zombie-debt issues, and has primarily focused on litigation. However, collectors are often successful in persuading consumers to pay dead debts without filing lawsuits. Accordingly, this Article addresses zombie-debt issues that consumers face before the onset of litigation. It identifies the failure of traditional methods to deal with this growing problem, and proposes amendments to the Fair Debt Collection Practices Act ("FDCPA") to establish uniform standards for the transfer of information and documentation to debt buyers and consumers. It recommends that penalties and statutes of limitation should deter debt buyers from violating the FDCPA. Finally, the article emphasizes the importance of providing assistance and education to consumers, and suggests that the recently formed Consumer Financial Protection Bureau ("CFPB") should coordinate a holistic approach at the federal, state, and local levels to combat zombie debts.
