By: Robert J. Nahoum
It goes without saying that consumer debt collection is a high volume business. Debt buyers like Midland Funding, LLC buy tens of thousands of consumer accounts with the full knowledge that they will only collect on a fraction of them. Midland Funding’s debt collection business model is to sue consumers on these purchased accounts in debt collection courts to try and make a return on their investment.
While in the aggregate, accounts purchased by Midland are worth millions of dollars, on an individual basis they are relatively small balances due for old credit cards. How much is too small for Midland to sue on?
In one recent case filed in the Wayne County New York Supreme Court, Midland Funding LLC sued a consumer for a measly $775.02 allegedly due from a Target National Bank credit card.
Suing for this little defies reason and logic. Â Firstly, Midland sued this consumer in the Supreme Court which has a filing fee of $210.00; to have copies of the lawsuit served in the defendant will cost on average $50.00; to have a judge assigned to the case will cost an additional $95.00; and to make any motions (necessary before a judgment will be entered) costs $45.00 each.
While ultimately these costs may be charged to the defendant, the economies of scale weigh against suing consumers on such negligible balances.
Midland is represented in this foolish lawsuit but the notorious debt collection law-firm mill Forster & Garbus who filed more than 33,000 New York debt collection lawsuits in 2014 alone.
Forster & Garbus is no doubt paid by Midland on a contingency basis where they retain a certain percentage of whatever money is recovered from the consumer. Add to this contingency fee paid to Forster & Garbus the price Midland paid Target National Bank for the account and you really scratch your head to figure out how much profit Midland hopes to make from suing a consumer on a $775.02 debt in a New York court.
If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you. With office located in the Bronx, Brooklyn and Rockland County, the Law Offices of Robert J. Nahoum defends consumers in debt collection cases throughout the Tristate area including New Jersey.
The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202
www.nahoumlaw.com
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