AI bots are now making it possible for debt collection agencies to go after even the smallest possible lawsuits, whether or not they are valid debts or not.
Tens of thousands of such lawsuits are being filed by AI bots nationwide, affecting poor people everywhere, according to a report by Wired Magazine.
The goal of debt collection cases is simple: Turn hard-to-collect debt into easy-to-collect wage garnishments. In most states, when someone loses a debt case, a court can order their employer to redirect their wages toward a creditor instead. The easiest way for that to happen? When the defendant doesn’t show up, defaulting the case. The majority of debt cases end in default: Either the defendant chooses not to show, is confused about what they need to do or should do, or, just as often, never receives notice of a case at all. “Sewer service,” where plaintiffs deliberately avoid notifying defendants of a legal case (for example, by sending a case to an old address), has been a festering problem in debt and eviction cases for decades, and continues to this day. In some cases, people find out they’ve been sued only after noticing that their paycheck has been garnished.
Above the Law columnist Joe Patrice reports on it here, and discussed it on Robert Ambrogi’s weekly LegalTechWeek Podcast legal tech discussion last week (at the 38:03 mark).
As the Wired article points out, some hope that consumers can use AI to fight back:
But take the optimistic scenario for a moment, where ordinary people who can’t find help from lawyers get help from chatbots instead. Every day, in every state, courts are visited by people who can’t access or afford lawyers, who don’t feel that the legal system is built for them, who feel their problems are intractable and their rights unobtainable. Is it any wonder that they’re ready to turn to “robot lawyers,” even if the outputs have mistakes or user data isn’t kept confidential? The reality is that people will use tools like ChatGPT for legal help because they can’t get help anywhere else.
Maybe it works, and chatbots help people feel more empowered and confident about coming to court. Maybe the right tool, deployed the right way, helps people without lawyers overcome all of the procedural hurdles and avoid all of the potential pitfalls that arise when filing and defending court cases. Maybe high-volume small claims or arbitration filings becomes a community organizing tactic, a distributed alternative to class actions. And maybe, just maybe, large language models can be successfully deployed to help people defend themselves from predatory court cases.
But even if all those maybes come to pass, here’s the dirty secret about those debt case defaults: If each and every case were vigorously defended, not only would more defendants win, but courts everywhere would crack under the workload. Courts are incentivized to maintain a system that hurts defendants because they’re unable to manage the alternative. The real risk from AI in law isn’t putting lawyers out of work; it’s overloading courts with work, and sticking lawyerless defendants with the bill.