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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region Forums90% of credit card lawsuits can't prove borrower owes money (more robo-signing)
Credit card debt collection may achieve the dubious distinction of making mortgage servicers look good.
The New York Times has been keeping a bit of a watch on this area, and reported earlier that credit card debt collection was a heavy user of robosigned affidavits.
A new story recounts how credit card companies frequently file erroneous lawsuits, sometimes saying a customer owes money when they’ve paid off the balance (sound familiar?) but more often, the consumer disputes the accuracy of the balance. And unlike foreclosure-land, where even after the revelation of widespread and varied mortgage abuses, most judges are pro-bank, in the credit card realm, the conduct of lenders is so bad that experienced judges are skeptical of them.
Lenders, the judges said, are churning out lawsuits without regard for accuracy, and improperly collecting debts from consumers. The concerns echo a recent abuse in the foreclosure system, a practice known as robo-signing in which banks produced similar documents for different homeowners and did not review them.
“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” said Noach Dear, a state civil court judge in Brooklyn, who said he presides over as many as 100 such cases a day….
The problem, according to judges, is that credit card companies are not always following the proper legal procedures, even when they have the right to collect money. Certain cases hinge on mass-produced documents because the lenders do not provide proof of the outstanding debts, like the original contract or payment history.
Apparently a hedge fund is backing a company that buys bad debts from credit card companies, debt they’ve already written off, shortly before the statue of limitations is about to expire, for pennies on the dollar. They then file suit. They don’t even plan to spend any money fighting, they just intent to win default judgments. So if you hire a lawyer and merely file an answer, you win. But a remarkably high percentage of people fail to do that.
http://www.nakedcapitalism.com/2012/08/judge-90-of-credit-card-lawsuits-cant-prove-borrower-owes-money.html
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ejpoeta
(8,933 posts)several years ago this company we'd never heard of got a default judgement against us. We didn't know it until one day I went to go to the store and my card (the one from my bank that gets the money out of my account) wouldn't work. The company had gotten a default judgement and had seized my bank account. My husband and I were freaking out. Well that led him down the road of research. We were never even served, though they had an affidavit that I was. He found out that a bunch of the other affidavits he pulled from towns all over this area were signed by the same person. The notary sign wasn't right. And you were supposed to go before some judge or something for the affidavit in court. Well it was weird how the same person had been in Buffalo NY AND NYC at the same time! there was no way they could have gotten to NYC in the time frame they had. Bob went to court and had the judgement set aside. The other guys never even bothered to show up. They did file a paper with the court and asked for more time. The judge left it up to bob. HE said no.
As for people failing to do anything.... people don't realize they have rights. We didn't before this fiasco. We always ask for validation if anyone calls. No matter what. Prove that you have the right to collect anything! And if the statute of limitations has run out, then pound salt. If you give them anything, then it restarts the clock. Make sure you check your credit report too. You'd be surprised how many inaccuracies there can be on there. Don't just let that go. These scum suckers will falsely update an account that is past the statute of limitations to make it look like it has had activity to make it look like it is within the statute of limitations when it is not.
malokvale77
(4,879 posts)The link didn't work for me either.
See my post about Texas.
HiPointDem
(20,729 posts)HiPointDem
(20,729 posts)ejpoeta
(8,933 posts)I have noticed more ads for lawyers to help you go after these guys. That's nice to see as Bob had a hard time getting any help. He did it pro se (on his own). He found a group online though that helped and they all helped each other.
malokvale77
(4,879 posts)JP's don't even bother to make sure the person has been properly served before signing a judgement against them.
ejpoeta
(8,933 posts)bob happened to get a judge who was fair. I always thought judge's were supposed to be impartial but it sure seems some of them are NOT impartial.
malokvale77
(4,879 posts)The Justice system is bought and paid for. I don't have that kind of purchasing power.
TBF
(36,570 posts)I hired a consumer lawyer when we had a few suits filed against us. All were dismissed as they had no evidence, in fact in the last lawsuit we dealt with the attorney who filed the suit had been disbarred.
Most people don't hire a lawyer, but I've spent less than $5K in legal fees to ward off several cases (we got ourselves in trouble with credit cards years ago - long story). Texas is one of the few states where they can't garnish wages and they have to go to court. At least we can fight back here and get the cases dismissed.
malokvale77
(4,879 posts)you don't know you're being sued. That was the point of my original post. As to getting legal help, $5K is out of reach when one's annual wages has plummeted to barely $10K. Like I said, I can't afford justice in Texas. Hell, I can just afford to eat.
TBF
(36,570 posts)but I completely understand the points about being blindsided and not being able to afford the legal fees.
The cases we had were over probably a 3-yr period and between $500 - $1000 for retainer fee, and eventually all went away. I definitely didn't spend over $5K (that might be a little high). I didn't look into legal aid or anything like that because we wouldn't have qualified. I don't know if there are clinics out there that would take on this type of work?? My only point was that at least you can fight back under Texas law - they can't immediately just start garnishing your paychecks like they can in some states.
The real problem is that these predatory companies are allowed such high interest rates & late fees. We paid off what we could, let some charge off, and eventually our slate is being wiped clean. It has taken as long as bankruptcy though (maybe longer). So many people really don't understand what they are getting into with credit cards. We only carry a few now - one that we use for vacations (Am Ex - paid off monthly), and a couple smaller ones to rebuild our credit a bit. No more endless store cards etc ...
malokvale77
(4,879 posts)In my case I'm actually judgement proof. I don't have a bank account, or credit cards. All I own is my homestead and a 23 year old car. I actually got a letter from another collection agency (same company operating under a different name) saying the judgement was removed so I now owe them the money. lol. It's just a circle jerk. Frankly, I just don't feel up to the game any longer. I just hate that so many are getting bit the same way.
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