April 11, 2012
Host: Ted Simons
Debt Collection Bill
- While creditors are supporting a bill (HB 2664) moving through the state legislature that deals with credit card debt, others are saying it’s a bad deal for consumers. Hear from attorneys on both sides of the issue.
- John Kaitis - Attorney of Arizona Creditor Bar Association
- Veronika Fabian - Attorney of Consumer Debt Collection
| Keywords: credit card
, HB 2664
Ted Simons: If you use a credit card you are required to pay back what you borrow but sometimes people can't or won't pay their debt. Creditors can use litigation to try to collect or they can give up and sell the debt to a debt buyer for a fraction of what they're owed. The debt buyer then tries to collect the debt. House Bill 2664 is an attempt to address the system of debt collection. Supporters see the bill as a way to streamline the process. But opponents say it's an attack on consumer protections. The bill failed in the Senate yesterday but today -- but it was revived by a motion to reconsider. No word when another vote will take place. Here in support of the bill is John Kaites, an attorney who represents the Arizona Creditor Bar Association and opposed to the bill is Veronika Fabian, an attorney who represents consumers in debt collection cases. Good to have you both here. Thanks for joining us. We appreciate it. Did I get that right as far as describing what debt buyers do?
John Kaites: You got it right but those wouldn't be my clients. And I think that sometimes the debt buyer gets used as a red herring in these matters so that you can kind of vilify the issue. This bill only deals with cases 2 in which people do not appear in court. So if you don't pay your credit card bill, if you get sued, if you get served, and you don't appear, all this bill does then is, when you get to -- when the lawyer for the credit card company goes to court, he can get a default judgment because you failed to appear, and he can show your final bill as evidence of what is owed. That's all the bill does.
Ted Simons: Is that all the bill does?
Veronika Fabian: I disagree. There's one provision that deals with default situations but there's also provisions that allow the creditor and debt buyer, the credit under the bill is specifically defined to include debt buyers, can prove the interest rate on the contract by showing a billing statement or terms and conditions. This is not just in default situations. The bill also allows a creditor or debt buyer to show that the consumer accepted the terms of the contract just by the use of the credit card without requiring that the consumer ever saw the terms of the credit card agreement.
Ted Simons: Why not use that final statement as proof, as a contract, if you will, that an agreement was made?
Veronika Fabian: Well, we see many, many mistakes notice final billing statement. For example, I had, once I represented a disabled veteran. He was being sued for credit card debt and the final billing statement showed all these amounts, he allegedly owed and he was like there's no way I owe this much. I went back through all the previous credit card statements and found out that he had been charged thousands of dollars for disability insurance when he was disabled so he did not -- that would never have been useful for him.
Ted Simons: How do you make --
John Kaites: I would never defend a case like that. She's absolutely right. Those people should not be held liable for debts they don't open. It's only a two-page bill. This is not the medical health care bill of 16,000 pages. You can read the two pages and on line 4 it specifically asserts the rights of individual consumers by saying, in no case is a credit card holder liable for any charges or interest that result from the unauthorized use of the credit card. We want, we obviously want to protect legitimate rights.
Ted Simons: But do mistakes happen? And when those mistakes --
John Kaites: Sure.
Ted Simons: Who is responsible?
John Kaites: If a mistake happens, you call your credit card company and they by Federal law have to clear up the mistake. If you sue somebody and they fail to appear, that's the situation we are dealing with in this bill, but if they do appear, it says right in the bill, right here, on -- no, it says right in the bill -- here we go. That if you end up suing and you show up for your contested case, you are perfectly capable of trying a case under current law. So Veronika would be able to show on behalf of her clients and win that case. She would win that case every single time whether this law passed or not.
Ted Simons: What's wrong with that?
Veronika Fabian: Well, first of all, there's already protections. There's already rules of evidence, rules of contract law that are in place. A judge should have the discretion to make a decision whether the evidence that they are providing is sufficient to establish amount of the debt. Just so it's clear, I mean, the plaintiff already gets a lot of benefit when is there's a default situation. The contract is deemed, the breach is deemed credited. All they have to prove under the Arizona rules of evidence is the amount due under the contract. And the judge has been doing, judges want to do justice and they have been making these decisions based on what's competent evidence of the amount due for a long time and the legislature shouldn't be telling judges what is competent evidence.
Ted Simons: Please.
John Kaites: The question comes down to, if somebody charges a lot on their credit card, they don't pay the bills, they get sued, they get served and they don't show up in court, you do waive all those rights. Veronika is right. You waive all those rights because you don't show up. But if you show up here we ensure in here you have all your rights and we enforce them in the legislation.
Ted Simons: What does this bill do?
John Kaites: The problem is there's an inconsistency in the limited jurisdiction courts. These right small claims courts or the justice courts with how the damages have to be proved. If the case in controversy is only $1,000 or $1500, and I have to put on a whole damages case, it could cost me, $3,000, $4,000, $5,000 in a case where the other side didn't show up. This makes it more efficient to collect the debt to the benefit of all credit card holders.
Ted Simons: Does this address inconsistencies as far as judges are concerned?
Veronika Fabian: Well, it -- I don't think that there's that many inconsistencies. I think the rule is pretty clear about what they need to submit. They have to submit an affidavit of someone who has the knowledge of the debt or the custodian of the records of the original debtor. In this case that's the problem with the debt buyers. They don't have a custodian of the original creditors to testify as to the amount due. They can't submit that affidavit. I also want to point out with respect to these default judgments, it's not that everybody gets served with this information and has the opportunity to dispute it. The Arizona rules of civil procedure allows people -- the rule itself allows service not necessarily by handing it to the person but allows you to leave it at the home with someone of suitable age or discretion. There's also alternative servers where people get served through publication or by mailing to the last known address. This particularly can affect military members, who move around a lot. These people aren't always people who get notice of the suit. Their interests should be protected in the default proceedings by the judge who has discretion and legal knowledge to know what's appropriate.
John Kaites: That's the current law. That's nothing in this bill changes how you have to serve somebody. And, in fact, if you have to serve somebody from publication, you have to prove they are avoiding your service. So the bottom line is if people don't pay their bills, and if people don't show up for court, then, the whole system, all of us, have to pay this charge. All of us have to pay this cost. The consumer is the one that ultimately benefits from this bill because of making the legal system more efficient in small claims cases.
Ted Simons: Critics say this allows for, actually allows for forcing repayment of what's already been paid or what may already have been dismissed or forgiven. Thinks a possibility with this bill?
John Kaites: No. We specifically tried -- we specifically say you can't collect those kinds of cases. You have to allow the current Federal law, the current state law, that protects consumers right now is reinforced in language in this bill on page 2.
Ted Simons: You agree that?
Veronika Fabian: I do not agree with that. I believe that this will continue to allow creditors to use the courts as a collection arm. They already have a great deal of power because they are the ones with all the records able to establish their cases quite easily. You know, again, this isn't just about default judgments. Again, there's two provisions of this bill that apply when it's contested action. They can establish their interest rate through a billing statement or terms and conditions without any proof that the consumer ever got it. They can establish the existence of a contract just by the fact that the consumer used the credit card.
John Kaites: Right so you can establish -- you can -- listen to her words. You can establish the existence of the contract because you were out there charging things on your credit card. Of course you can. If I buy a TV at Wal-Mart and put that in my house I have to pay that back. If you don't everybody pays for it in increased costs on their credit card. The people who pay their credit cards are the ones that pay the costs of these collections not happening.
Ted Simons: Bottom line, critics say this benefits collectors, debt buyers, if you will, not consumers. Your response.
John Kaites: I believe that the vast number of consumers, 99% of the consumers want to see this loophole go away because they're the ones that will benefit.
Ted Simons: Bottom line, supporters say this makes the legal system more efficient. Your response.
Veronika Fabian: My response is that supporters want to put their thumb on it easier to make it easier for debt buyers to prove their case, even though they’re often mistaken.
Ted Simons: We have to stop it right there. Good discussion.
John Kaites: Thank you very much.
- An Arizona Capitol Times reporter provides a mid-week update on news from the Arizona State Legislature.
- Jim Small - Reporter at Arizona Capitol Times
| Keywords: legislative
Ted Simons: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. Former Maricopa County attorney Andrew Thomas defended himself and his record at a raucous press conference today. Thomas was disbarred yesterday for abusing his prosecutorial powers while in office. Thomas today said that he will try to run a voter initiative to fight corruption, and he said that he has a contract to write a book. At one point today Thomas compared himself to Gandhi and Martin Luther King, Jr. Thomas did not say if he's decided to appeal his disbarment.
Ted Simons: Things were no less eventful at the state capitol where Tucson representative Daniel Patterson resigned after the House Ethics Committee voted to expel him over numerous allegations including domestic violence and trying to trade votes for sex. Here with more on our weekly legislative update is Jim Small of the "Arizona Capitol Times." Always good to see you. Thanks for joining us. We have been talking about this Patterson thing for a while. Resigns. Was that really a surprise?
Jim Small: You know, I think it was kind of split. I think some people thought he was going to stick it out to the bitter end and we would see him on the floor making a defiant speech. There was another camp of people who thought he wouldn't go that far, he would walk right up to the edge and resign which is ultimately what he did today.
Ted Simons: I heard there might have been some attempts to get him to stay on. He actually tried to he keep his salary until the end of the year. What's that all about?
Jim Small: There was some talk. I think he had tried to get some payment for some legal fees and get his salary and some stuff like that. It's not going to happen. It's kind of a moot issue at this point since he did resign today.
Ted Simons: And he apparently one of the reasons he said he quit is because the House had become, to him, a hostile work environment. There's a lot to be said for that particular allegation.
Jim Small: That was one of the claims in what he said for the reason of his resignation letter was the House had become a hostile work environment with what's going on with Democrats calling for him to be ousted, saying that they are scared, saying they think he would be a violent person. He's repeatedly said that's not the case, that he is not violent and not a danger to anybody else. But they took away his office, they took away his access to almost every part of the building, shoved him into a little unused office up on the third floor, kind of behind an unused conference room. So, you know, in that respect it certainly had become difficult for him to do his job. Although I think, you know, that was kind of a bed he made. He was lying in the bed he made more than evening else was putting him in that position.
Ted Simons: As well it sounds as though the Committee, the Ethics Committee that voted to expel him weren't looking as much, although I guess they noted the domestic violence charges, but they were looking at how he dealt with fellow lawmakers. Correct?
Jim Small: Yeah. The complaint was originally about his domestic violence issue. That was kind of what sparked it and in the complaint it mentioned this was part of the latest thing in a pattern of disruptive behavior on his part. And the ethics committee was investigating not just the domestic violence thing but the way he had comported himself throughout his tenure at the legislature, as -- whether this was a pattern and that was really what they focused on. So for the past four years how had he handled himself and treated his colleagues and staff members, how had he, you know, just really behaved himself or not behaved himself as it were at the Capitol.
Ted Simons: Elected as a Democrat, changed to an Independent. Who replaces him?
Jim Small: It will be an Independent. The Pima County Board of Supervisors will have to -- supervisors will elect a panel of voters to vote on the nominee. Interesting thing there is no requirement that any of these Independents be Independents for long. They could register today. They could be Democrats today or Republicans today, register as Independents, be on this panel, be appoint, nothing saying whoever gets appointed doesn't change their registration once they are in office.
Ted Simons: Wow, all right. As far as the session is concerned, are we closing in on a sine die here?
Jim Small: I think we are closing in on it. It remains to be seen how quickly we are closing in. I know Republican leaders wants to end next week. Ideally they would like to get done middle of the next week, right around the 100th day. It all depends on the budget. I don't know that they are quite there yet. Talked to some people today and they are making progress but they are not quite ready to have a budget done. So it will be, maybe the week after, I think, maybe more optimistic look, so end of April.
Ted Simons: Last question. We have talked so much this week about the Andrew Thomas and the disbarment and that story keeps going on here. What kind of fallout, reaction at the Capitol? Obviously, this is county stuff but you are there. They are there. What's the reaction?
Jim Small: Strangely, for something as big a story as that is, there hasn't been much reaction and I think it's largely because of all the circus at the Capitol, the Daniel Patterson thing, right at the end right session and kind of hitting that home stretch where they are considering a lot of bills and a lot of controversial bills and things that are -- people's attentions and I think their emotions are wrapped up in their legislative work. Not a whole lot of people are, you know, going out and making a stand certainly in the Andrew Thomas.
Ted Simons: Not a lot of marching in support of Andrew Thomas and Joe Arpaio?
Jim Small: None. I can't think of a single person who I have seen who is proactively come out and said, boy, I think Andy Thomas got a raw deal here. Although I have no doubt there are people that feel that way.
Ted Simons: Thanks for joining us.
Jim Small: Absolutely.
Technology & Innovation: A Working Tricorder
- In the television series “Star Trek,” the character Spock used a “tricorder” to take measurements after being transported to a planet. A University of Arizona researcher, Dr. Peter Jansen, has developed a working tricorder. His model can measure temperature, humidity, magnetic fields, atmospheric pressure, ambient light levels, distances, and contains a colorimeter, GPS, accelerometer, and gyroscope. It is also open-sourced, with plans available for anyone to build one.
- Dr. Peter Jansen - Researcher, University of Arizona
| Keywords: AZ
Ted Simons: In our continuing coverage of technology and innovation issues, we look at a case of science fiction turned science reality. In the Star Trek TV series the character Spock would use an electronic hand-held instrument called a tricorder to get readings on a newly discovered planet. A post-doctorate research fellow from the University of Arizona has created a real-life working tricorder. And here to talk about his enterprise is Dr. Peter Jansen. Did you get the enterprise joke there? You probably heard every single joke, haven't you?
Peter Jansen, Ph.D.: I've heard a lot of them.
Ted Simons: What is a tricorder?
Peter Jansen, Ph.D.: So a tricorder is really a very general scientific tool that's sort of like a Swiss Army knife of science. You can use them both for just doing science research as well as science education. And they contain sort of every different sensor that you can think of and you can fit in such a confined area.
Ted Simons: I know in Star Trek a tricorder seemed to do atmospheric conditions, electromagnetic conditions. Is that what these do as well?
Peter Jansen, Ph.D.: Very much so. It can sense things like atmospheric temperature or pressure or humidity, spatial things like distance or motion or GPS locations. Those are all here.
Ted Simons: I think we have some shots of the schematics, if you will, and diagrams as far as getting involved. What kind of operating system does this use?
Peter Jansen, Ph.D.: So the first one uses a very custom operating system. And the second one uses a commodity operating system called Linux, open source and freely available.
Ted Simons: Open source meaning I have a great idea if I move that USB that will attract elephants I can do it?
Peter Jansen, Ph.D.: Exactly. You can go to the website, tricorderproject.org, and down load the schematics, the plans, the diagrams, and build your own right in your basement.
Ted Simons: We are looking, we were looking a little bit at the construction, kind of the guts, if you will, of this -- what got you started in all this?
Peter Jansen, Ph.D.: I have wanted to build a tricorder ever since I was a kid. My dad and I used to sit down and watch Star Trek together which was absolutely great. And ever since then, I was just absolutely fascinated by the technology. And went into science in order to build it.
Ted Simons: Yeah. And was there a point at Star Trek where you went, you could have done a phaser?
Peter Jansen, Ph.D.: I am Canadian. We don't do phasers.
Ted Simons: I got you. You got a couple of these on set here. This one, the first one is your original model.
Peter Jansen, Ph.D.: So this is more of a proof of concept. And it's really, was really to prove to myself that I could build a tricorder. When I came into this I was fairly new in building tricorders. And it can sense things like magnetic fields, there's temp and humidity and all those sorts of things are available here. And then the second tricorder that I have now --
Ted Simons: Let's take a look at that one, too.
Peter Jansen, Ph.D.: It’s a bit fancier. I really designed it for me. I designed it to be the sort of beautiful instrument you could do a lot of visualization work, and really make, really make people intuitively understand what you are trying to sense.
Ted Simons: This is you are basically recording. You are measuring things here. Correct?
Peter Jansen, Ph.D.: Exactly. Here we are seeing some magnetic fielding on the side here. Down here we have noncontact temperature so I think we are measuring the contact in the ceiling right now.
Ted Simons: Sure.
Peter Jansen, Ph.D.: But that giant blip that we just saw is my hand moving.
Ted Simons: Isn't that something?
Peter Jansen, Ph.D.: It's really kind of cool.
Ted Simons: And you got a keyboard below that so it's somewhat familiar to those of us who aren't in the tricorder --
Peter Jansen, Ph.D.: Very much so.
Ted Simons: In terms of real life application, medical? Like diagnosing? Like Bones used to do there in the Sick Bay?
Peter Jansen, Ph.D.: In Star Trek they had two different kinds of tricorders. One was a tricorder that Spock would get and he would take down with him on an away mission on a planet to figure out all sorts of interesting things and the other was a medical tricorder they would use in Sick Bay to really just figure out what was wrong with you, with the press of a button.
Ted Simons: Now, how far along are these to doing, especially the medical application?
Peter Jansen, Ph.D.: Right. So these are squarely science tricorders right now. But the X-prize foundation, the same folks who sponsored the $10 million X-prize to reach space, they have just announced a tricorder X-prize squarely aimed at medical tricorders and diagnosing all sorts of different diseases from cancer to bacterial infections to whatever you can think of.
Ted Simons: Basically the contest is, get a tricorder, point it, don't poke it at anybody but point it at them and if you can diagnose something or sense something, you win a big prize?
Peter Jansen, Ph.D.: Exactly. It's really exciting and I imagine it's just going to absolutely blow away medical science.
Ted Simons: You know, a lot of things with Star Trek you see apps, android and iPad apps that do similar stuff, some sort of close approximation, I should say. Compare and contrast those with these.
Peter Jansen, Ph.D.: So modern cell phones have really gotten very advanced and many of them include a couple of different sensors. Most of them aren't designed for accurately sensing the environment but they're things like to adjust the contrast or brightness of your screen if you are in a light environment or daylight. These are really very different instruments. They have very accurate sensors and they are really designed to do exciting science.
Ted Simons: A last question here. Any copyright or licensing problems? Because you are using a tricorder and there was no such thing as a tricorder before Star Trek.
Peter Jansen, Ph.D.: So apparently, Gene Roddenberry negotiated in his original contract that if anybody makes the actual technology, that they can use the name. I think that this is one of the first instances that I am aware of that that's actually happened.
Ted Simons: Isn't that something?
Peter Jansen, Ph.D.: It's really kind of cool.
Ted Simons: Basically the idea is, if you can do it, you can take it and it sounds like you are doing it.
Peter Jansen, Ph.D.: We have to work on the warp drive next.
Ted Simons: Congratulations and good luck. I hope we see some leaps and bounds with this sort of technology. It certainly is exciting. Old Star Trek fans it's kind of fun, too. Good to have you.
Peter Jansen, Ph.D.: Good to be here.