The Ethical Exploitation of the Unrepresented Consumer

Abstract

This Article examines civil actions brought by attorney-represented debt buyers against unrepresented consumers, to collect debts against which the statute of limitations has already run. If the consumer were represented, an affirmative defense would be a complete bar to collection of the debt if it were raised, and malpractice on the part of the debtor’s attorney if it were not. The consumer debtor is almost always unrepresented and unlikely to raise this defense. The judgment of the court on a time-barred account starts the clock running anew on the debt instrument, and in effect blesses the exploitation of the debtor.

The Article examines the knowing exploitation of the unrepresented consumer by attorneys in the debt buying industry. It is not merely “ethically permissible” for an attorney to knowingly set this trap for the pro se defendant, doing so seems to be regarded positively, as an example of the duty of diligent or zealous representation. The adversarial process works because robust advocacy by the interests on opposing sides will illuminate for the neutral decision-maker the errors and excesses of each. The exploitation of the consumer debtor evidences one more practical setting in which core presumptions underlying this process fail – because one party is represented by counsel and the other is not.

This Article proposes narrowly-tailored regulatory and legislative solutions to curtail abuse of unrepresented consumers within this industry. The final solution is potentially broader in scope and consequence. While this Article does not propose the wholesale deconstruction of the adversarial system, in this instance when a core presumption has failed, it becomes necessary to police ethical boundaries of attorney conduct more closely. A proposed ethical rule entitled “Duty of Fairness Toward an Unrepresented Party Opponent” serves that purpose.

Keywords: unrepresented, statute of limitations, affirmative defense, debt