Consumer Lawyer Says Credit Card Debt Collection Suits Are a 'Robo-Signing Redux'

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As debt-collection suits against credit-card holders surge, so do complaints of wrongful conduct on the part of those seeking to get their mitts on consumers’ money.

Even when the debt is legitimately owed, companies may not be able to prove the account due to poor record-keeping. In other cases, erroneous records and add-on fees have led to collection efforts concerning debt that has already been paid or arguably isn’t owed, the New York Times’ Dealbook blog reports.

Meanwhile, some court filings are being put together in the same slipshod or even flat-out fraudulent fashion that earlier came to light during the deluge of foreclosure cases that followed the mortgage meltdown of recent years, lawyers representing consumers tell the newspaper.

Attorney Peter Holland, who runs the Consumer Protection Clinic at the University of Maryland Francis King Carey School of Law, calls the situation a “robo-signing redux.”

Noach Dear, a Brooklyn civil court judge, says he has as many as 100 credit-card cases a day on his calendar. “I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” he tells the newspaper.

Most debtors, however, don’t defend the suits, which can lead to wage garnishments and frozen bank accounts.

Related coverage:

ABAJournal.com: “‘Debtors’ Prison’ Is a Reality for Borrowers Who Skip Court Dates, Ignore Court Payment Orders”

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