Does the business records exception to the hearsay rule allow debt collectors to collect on debts that were generated by other businesses?

As I have often pointed out, debt collectors, by their very nature, are not the entities that created the records concerning the debt for which they are suing defendants. Rather, they bought the supposed debt from someone else: another debt collector or the original creditor (who did create any records there might be). This creates a problem for the debt collector when it brings suit: any records it may attempt to use to prove the debt are “hearsay.”

What Is Hearsay?

Hearsay is sometimes referred to as “he said, she said,” but in legal terminology it is simply a statement that was made out of court that is trying to be used in court to prove the thing that was said. For example, Bill overhears Sue say, “Jim’s eyes are green.” If Bill later attempts to prove that Jim’s eyes are green by testifying he heard Sue say so, that would be hearsay.

Business Records Exception to Hearsay

Business records regarding how a debt was created or maintained are obviously hearsay, since they were created outside of court and cannot in any event be subjected to oath. Under certain circumstances, however, they are allowed as evidence because they are considered particularly trustworthy. They are considered trustworthy because the business that created them probably depended upon them to be trustworthy and probably created specific methods of keeping them so that they would remain trustworthy. After all, a business does rely on its records created by various people over time in order to fulfill its obligations and collect money due to it.

Debt collectors take this simple insight and pervert it grotesquely.

Requirements of the Business Records Exception

The business records exception requires that the party seeking to introduce business records have been created during the normal course of business, in known and predictable ways that guarantee accuracy. And it requires that the party seeking to introduce the records be able to prove these “predicates” (requirements) based on personal knowledge.

What Debt Collectors Get

Debt collectors are generally provided electronic records of debt when they buy the debt, and it might be that the records were honestly and accurately made. Of course it might not be, too. That’s the whole point of the business records exception-that someone gets to look the record keeper in the eye and make sure that the business in question was set up to keep the records straight in the first place. Otherwise the debt collector could “launder” bad debts by buying them and their records and simply claiming that the records were good.

Naturally, this fundamental flaw will not 債務舒緩 stop the debt collector from making the argument that their records (that they got from another business) are business records because they (the debt collector) relied upon them and kept them in the “ordinary course of business.”

Ordinary Course of Business

Some courts have held that debt collectors cannot keep records in the ordinary course of business. That’s because debt collectors have no ordinary course of business in the sense that would make the records reliable. They do not provide any services, and have no obligations to fulfill, for the consumer. Instead, debt collectors exist to collect debts that are either disputed or not being paid for some other reason. And that means that every business purpose they have is promoted by claiming the debts are good, obligations of the original creditor have been made and kept, etc. There is nothing to keep the debt collector from inflating the obligation or claiming it was due from the wrong person.

And in fact debt collectors are notorious for doing just that.

And of course the debt collectors are still not able to testify regarding the integrity of the records before the debt was purchased.