Story on Debt Collection "Rocket Dockets" Largely Misses the Point

An article appearing earlier this week in American Banker focused on the use of resolution conferences in certain court jurisdictions to handle debt collection cases was largely incorrect and based on a fundamental fallacy, according to ARM attorneys with experience in the counties profiled.

The story, “Courthouse ‘Rocket Dockets’ Give Debt Collectors Edge Over Debtors” focuses much of its attention on the perceived unfairness of the resolution conferences, often called “rocket dockets” by consumer advocates. Several jurisdictions have set up the conference process to give alleged debtors one last shot at directly communicating with creditors, to either resolve the debt or actively defend it, before the plaintiff asks the courts for summary judgment.

The piece focused on the rocket dockets of two Maryland counties that border Washington, DC – Montgomery and Prince Georges. There are only a handful of courts that employ the conferences and all were set up as an additional layer of consumer protection against debt collection legal action.

But according to consumer advocates, because there are no judges or defendant attorneys present, the conferences unfairly tilt power in the direction of debt collection attorneys and their clients. Furthermore, they insist that the language used in summons imply that consumers must attend the conferences.

This is not the case, according to an ARM attorney with direct experience in the counties. “This is actually an additional protection afforded to consumers in these jurisdictions,” the attorney told insideARM.com. “The alternative to these conferences is default judgment in favor of the creditor plaintiffs.”

The attorney noted that the resolution conferences come into play only after all other communication attempts with the debtor have failed. Furthermore, consumer defendants are directed to conferences, administered by court clerks, only after they fail to state a defense to the debt collection suit, as required in the summons.

The National Association of Retail Collection Attorneys (NARCA) also took issue with the story.

“We are disappointed in the article,” said Joann Needleman, President of NARCA. “It largely ignores the fact that the conferences are an opportunity for consumers to get together with creditors in a neutral way. The safest place for consumers is in the courthouse. They have far more protections there than through any other communication channel used in debt collection.

In fact, the article did include statements from Maryland judges that directly refuted many of the contentions argued by consumer advocates and supported the position of NARCA.

They noted that the conferences are set up to aid consumers, there is always pro bono legal help present, attendance is voluntary, and that judges need not attend the conferences since that directly contravenes the purpose of the process in the first place: to resolve portions of the large volume of debt collection lawsuits. But those statements appeared in the article after more than 1,700 words of consumer stories and a thorough rehashing of the Encore Capital affidavit issue.