Civil Suits Against ARM Companies Soar in 2009: U.S. Courts

Civil lawsuits brought by consumers against debt collectors, debt purchasers and other credit reporting agencies increased 52.5 percent in Fiscal Year 2009, according to data released Tuesday by the Administrative Office of the U.S. Courts.

The court statistics show that in the year ended Sept. 30, 2009, 6,463 civil cases filed in U.S. District courts were for redress under consumer credit statutes — specifically, the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA).  In FY 2008, there were 4,239 such cases; in FY 2005, there were only 1,192.

The accounts receivable management industry has been well aware of the rising threat posed by litigious consumers and their legal representation. In fact, an industry has developed to help ARM companies track such cases (“FDCPA Cases Brought By Consumers Creates New Market Aimed at Collectors,” June 22, 2009).

Overall, the U.S. Courts noted that cases of all kinds increased in FY 2009. In the district courts alone, civil cases were up 3 percent from FY 2008 while criminal cases rose 8 percent.

In fiscal year 2009, a total of 1,402,816 bankruptcy petitions were filed in the U.S. courts, an increase of 35 percent from 2008 and the largest number of bankruptcy filings in any fiscal year since 2005.

<<< Return to Newsletter