Debt collectors beware: Judge's ruling could change the game

HAWTHORNE, N.J. (AP) — Ever had a debt collector on your back for money you knew you didn't owe? Listen to the story of Steven Psaros and take heart.


The Great Recession forced Psaros into foreclosure on the house he had bought in this northern New Jersey town in 1999.


Then, another blow. A debt collector demanded about $11,000 in homeowners' insurance, money Psaros claimed he didn't owe under terms of a mortgage refinance signed several years earlier.

He fought back in court and, in a ruling that could change how law firms handle debt collection, a federal judge held last month that the firm representing the debt collector could be liable for damages even if it didn't know its client was relying on incorrect information.


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