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Credit card companies filing shady collection lawsuits

Credit card companies across the country have filed hundreds of lawsuits seeking their money on out-of-date loans without following proper legal procedures. Similar to the problems court judges have noticed in foreclosure cases, credit card companies are suing consumers and using shady practices.

Judges are reporting that the suits are based on incomplete records, generic witnesses and affidavits, and erroneous documents. They say the lenders are filing lawsuits without regard to accuracy and even accused credit card companies of providing so-called “robo-signed” documents that have been prepared generically and in advance, then submitted without review.

Those documents are often incomplete, inaccurate or flat out falsified. The mass-prepared documents often lack any proof of outstanding debts including the original contract or payment history. Creditors are presenting fake credit card statements to the courts that were produced years and years after the customer supposedly fell behind on their bills.

One review found that the same Citigroup employee signed case documents filed in four different states. Another judge, who hears as many as 100 such cases a day, even went so far as to say that nearly 90 percent of his credit card cases are flawed. Some lenders try to collect monies that have already been paid off and others increase the amount of the loan with ridiculous fees and interest costs.

Nationwide, it is estimated that U.S. borrowers are behind on nearly $9 billion in credit card debt and debt collection lawsuits are done en masse make the creditors money.

How is that possible if their records are so flawed? Because borrowers usually do not show up in court to defend themselves. They do not take the opportunity to tell their side of the story. Judges have no choice but to rule in the favor of the banks. That makes it easy for the creditors to garnish a consumer’s wages or freeze their bank accounts.

Our firm handles cases like the ones discussed in this article. It’s your right and may be in your best interest to fight your credit card company. If you would like to learn more, please visit our Burlington County, New Jersey Bankruptcy Law web site.

Source: dealbook.nytimes.com, “Problems Riddle Moves to Collect Credit Card Debt,” Jessica Silver-Greenberg, Aug. 12, 2012

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