First-Ever National Report on Widespread Court Practices That Coerce Payments From People in Debt Without Due Process

NEW YORK — In the first-ever report on the extent and impact of cooperation between courts and the private debt collection industry nationwide, the American Civil Liberties Union found courts in 26 states and Puerto Rico in which judges issued arrest warrants for alleged debtors at the request of private debt collectors.

This practice violates the many state and federal laws as well as international human rights standards that prohibit the jailing of debtors. It worsens their financial struggles by subjecting them to court appearances, arrest warrants that appear on background checks, and jail time that interfere with their wages, their jobs, their ability to find housing, and more.

“The private debt collection industry uses prosecutors and judges as weapons against millions of Americans who can’t afford to pay their bills,” said Jennifer Turner, author of “A Pound of Flesh: The Criminalization of Private Debt,” and principal human rights researcher at the ACLU. “Consumers have little chance of justice when our courts take the debt collector’s side in almost every case — even to the point of ordering people jailed until they pay up.”

An estimated one in three adults in the United States has a debt that has been turned over to a private collection company, according to the Urban Institute. More than 6,000 of these companies operate in the U.S. At the bidding of the private debt collection industry, courts issue tens of thousands of arrest warrants every year when people don’t appear in court to deal with unpaid civil debt judgments.

By analyzing more than 1,000 cases in which judges issued arrest warrants for alleged debtors, the ACLU identified the particular ways that the courts enable the debt collection industry to coerce alleged debtors to pay up, even when there’s no evidence the debt is owed or when the person isn’t legally required to pay. For example, many judges issue the requested warrants without checking whether the person has the ability to pay.

“A Pound of Flesh” includes recommendations for legislation, changes in court rules, actions by attorneys general, reforms for district attorneys’ offices, and other ways to stop law enforcement and the courts from helping the private debt industry abuse consumers. They include but aren’t limited to legislation that prohibits courts from issuing arrest warrants in debt collection proceedings as well as laws that ensure that people aren’t jailed in cases to collect debts they haven’t been notified about, can’t pay, or aren’t legally obligated to pay.

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