Project Launches to Test New Kind of Self-Help for Consumers Who are Sued for Debt Collection

Earlier this month a project was announced that is aimed at determining what kind of help would be most effective for consumers who have been sued by collectors. Eight years in the making, the initiative is led by Dalié Jiménez, James Greiner and Lois Lupica, law professors at the University of Connecticut, Harvard and the University of Main law schools respectively.

Jiménez spent a year as a policy fellow at the Consumer Financial Protection Bureau, then went on to UConn. She has been prolific on the topics of debt buying and debt collection. Among others, she authored the 2015 reports, Dirty Debts Sold Dirt Cheap and Private Student Loans and Bankruptcy: Did Four-Year Undergraduates Benefit from the Increased Collectability of Student Loans? Jiménez, Greiner and Lupica also co-authored Self Help, Reimagined, a 2016 paper that is soon-to-be-published in the Indiana Law Journal.

The 53-page paper outlines the philosophy behind their project, summarized this way:

“There will never be enough lawyers to serve the civil legal needs of all low- and moderate-income individuals (LMI) who must navigate civil legal problems. A significant part of the access to justice toolkit must include self-help materials. That much is not new; indeed, access to justice commissions across the country have been actively developing pro se guides and forms for decades. But the community has hamstrung its creations in two major ways. First, by focusing these materials on educating LMI individuals about formal law, and second, by considering the task complete once the materials are available to self-represented individuals. In particular, modern self-help materials fail to address many psychological and cognitive barriers that prevent LMI individuals from successfully deploying their contents.”

The resulting project, taking place in Maine, will identify people who are being sued in a debt collection case and assign those that meet the study criteria into one of four groups. Each group will receive a different degree of self-help or professional support. Participants will be followed over the course of three years to determine whether the project’s self-help kits have a positive impact. As a measure of impact, the team will track credit score attributes before, at the start of, and after the project. They will also measure other financial stress and wellness indicators.

The cornerstone of the self-help kit is a series of very basic cartoon drawings that aim to help consumers overcome the natural intimidation associated with the prospect of going to court.

Commenting for UConn Today, Jiménez said,

“A comparison of financial health across our four groups will provide gold-standard evidence regarding the effectiveness of self-help packets, financial counseling, and attorney representation. The result will be the richest and most detailed data set ever conducted in an evaluation of what works for individuals in financial distress. This is rigorous evidence.”

insideARM Perspective

As co-Executive Director of the Consumer Relations Consortium (a group of larger market participants in debt collection that engages with consumer advocates and regulators), I have met with Dalié Jiménez on several occasions, and she has spoken at one of our conferences. I found her to be quite knowledgeable about the nuances of debt collection, and to hold somewhat of a balanced view of the consumer-collector positions.

In a field that is brimming with anecdotes, I applaud this clearly extensive effort to pursue actual data to suggest the best way to assist consumers in the very complex world of debt collection.