New bill could make it easier for debt collectors to get you to pay

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By Jim Carr By Jim Carr
By Mike Gertzman By Mike Gertzman

PEORIA, Ariz. -- Three years ago, debt collectors began coming after Hayden Scheider for $18,000, a loan he says he never took out.

“My reaction was, ‘I don't owe this. I don't know anything about it,’” he said.

Scheider says he asked the collections agency multiple times to provide proof -- a contract, social security number, anything -- that tied him to the debt but says all he kept getting was a bill.

“I called them and they just gave me the runaround, and they kept giving me the runaround,” he explained. “Finally, I told them I'm not going to pay for it.”

But Scheider says calls from the debt collector kept coming, and he was eventually sued.

“How in the heck can they do this to you? You know, you're just, inside your torn up and it's not right,” he said.

Scheider hired his own lawyer, went to court, and actually won because he says the collection agency never could provide proof that he took out the loan.

But under a new Arizona bill, HB 2664, debt collectors wouldn't have to show much proof at all; just a bill saying you owe is all it would take to connect consumers like Scheider to a debt.

“This is an effort by the debt buyers who know they don't have good evidence to circumvent the rules of evidence, and the rules of contract, to get a judgment easier,” said Ellen Katz, director of the William E. Morris Institute for Justice.

She says collection agencies obviously support the bill because when debts are bought and sold, crucial information is lost.

“That's the kind of document that debt buyers get because they're purchasing this debt from the original debtor for pennies on the dollar and because they pay so little they get so little in evidence,” she explained.

If HB 2664 becomes law, Katz believes it would be nearly impossible for consumers like Scheider to challenge a debt.

But the bill's sponsor, Rep. Jeff Dial, who declined our interview request, said during an open meeting in March that the bill protects responsible spenders.

“The fundamental purpose of this bill is when people purchase something on their credit card, they basically need to pay their bills,” Dial said.

Scheider says he is responsible but if this bill was in place during his legal battle, he'd be paying an $18,000 debt that wasn't his.

“They want you to cave, and most people do,” he said. “You've got to take it to this level, and it's going to be harder to take it to this level now.”

As of April 17, 2012, HB 2664 is awaiting a house vote. If passed, it will likely go to the Governor who can veto it or sign it into law. Click here to track the bills progress.