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Problems Riddle Moves to Collect Credit Card Debt

CNBC - Aug 13, 2012

The same problems that plagued the foreclosure process and prompted a multibillion-dollar settlement with big banks are now emerging in the debt collection practices of credit card companies.

As they work through a glut of bad loans, companies like American Express, Citigroup, and Discover Financial Services are going to court to recoup their money. But many of the lawsuits rely on erroneous documents, incomplete records and generic testimony from witnesses, according to judges who oversee the cases.

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 cant prove the person owes the debt, said Noach Dear, a state civil court judge in Brooklyn, who said he presided over as many as 100 such cases a day.

Read Full Article from CNBC

- Posted: 2012-08-13 15:05:35


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