Automated Debt-Collection Lawsuits Engulf Courts
July 26th, 2010Great innovations in the bucket shop economy.
Via: New York Times:
As millions of Americans have fallen behind on paying their bills, debt collection law firms have been clogging courtrooms with lawsuits seeking repayment.
Few have been as prolific as Cohen & Slamowitz, a Woodbury, N.Y., firm that has specialized in debt collection for nearly two decades. The firm has been filing roughly 80,000 lawsuits a year.
With just 14 lawyers on staff, that works out to more than 5,700 cases per lawyer.
How is that possible?
The answer to that question is at the heart of a growing debate over the increasing use of the nation’s legal system to collect on bad debts.
Like many other firms, Cohen & Slamowitz relies on computer software to help prepare its cases.
…
Collection law firms are able to handle such large volumes of cases because computer software automates much of their work. Typically, a debt buyer sends a law firm an electronic database that contains various data about consumers, including name, home address, the outstanding balance, the date of default and whether interest is still accruing on the account.
Once the data is obtained by a law firm, software like Collection-Master from a company called Commercial Legal Software can “take a file and run it through the entire legal system automatically,” including sending out collection letters, summonses and lawsuits, said Nicholas D. Arcaro, vice president for sales and marketing at the company.
Related: Newspaper Chain’s New Business Plan: Copyright Suits
