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Star Tribune: FTC to probe courts’ jailing of debtors

Federal regulators are looking into the growing use of arrest warrants in Minnesota over unpaid debts, following a Star Tribune investigation and a letter calling attention to the practice from Sen. Al Franken.

A staff attorney with the Federal Trade Commission said Thursday the agency is trying to determine why debtors are being jailed in this state, and if they have been notified properly of any debt collection claims made against them in court. The agency said it was responding to a letter sent by Franken, which accused Minnesota debt collection firms of “abusing the state court system to reap profits.” Franken urged FTC Chairman Jon Leibowitz to take “immediate enforcement action.”

Federal regulators are looking into the growing use of arrest warrants in Minnesota over unpaid debts, following a Star Tribune investigation and a letter calling attention to the practice from Sen. Al Franken.

A staff attorney with the Federal Trade Commission said Thursday the agency is trying to determine why debtors are being jailed in this state, and if they have been notified properly of any debt collection claims made against them in court. The agency said it was responding to a letter sent by Franken, which accused Minnesota debt collection firms of “abusing the state court system to reap profits.” Franken urged FTC Chairman Jon Leibowitz to take “immediate enforcement action.”

A Star Tribune series, “Hounded,” found that debt collectors are increasingly turning to the courts and police to collect old debts. A June 9 story, “In Jail for Being in Debt,” found the use of arrest warrants against debtors jumped 60 percent in the past four years, with 845 cases in 2009. In some cases, judges issued arrest warrants against debtors who owed less than $100. In many cases, people did not know that a collector had taken legal action against them.

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