Banks Falsify Credit Card Lawsuits in Ninety Percent of Cases?

Philip Taylor (CC)

We hear every week about the massive LIBOR interest rate fixing, or the shady practices by which banks drain money from local municipalities, or the false promises given to homeowners across the country by the finance industry, or as much as 90% of foreclosed homes remaining off the market but still shuttered in and out of dispassionate algorithms, or that San Francisco’s assessor discovered ‘errors’ in 84% of home mortgage foreclosures (read: scams). It’s not a big leap of the imagination then to consider that almost all credit card lawsuits brought by banks are fraudulent. Lenders are still continuing the dubious fraud that caused such a scandal last year with robo-signing.

via Russia Today:

US credit card companies have been churning out lawsuits and improperly collecting debt from consumers 90 percent of the time, at least according to a New York judge who deals with these cases.

Lawsuits produced by credit car companies to recoup unpaid bills often rely on inaccurate documents, incomplete records and generic testimonies from witnesses who repeatedly testify, the New York Times reported. The companies often sue clients for more money than is owed.

“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” said Brooklyn civil court judge Noach Dear. The judge told the Times he sees as many as 100 such cases a day.

By “robo-signing” documents, banks “robotically” mass-produce similar papers for different clients, without properly reviewing them. In the process some of the papers get falsified.

Lenders often try to collect money from clients who have already paid their bills. Other times, they increase the lenders’ debt by unfairly adding fees and erroneous interest costs.

Some clients claim they don’t owe anything, but most disagreements come from credit card companies conflicting with clients about how much is rightfully owed.

But in 95 percent of lawsuits, the credit card companies win – even though the lawsuits sometimesinclude falsified credit card statements produced years after the borrowers fell behind on payments.

A former JPMorgan Chase employee admitted that nearly 23,000 delinquent accounts had incorrect balances.

Taryn Gregory said she was sued by Discover for more than $7,000 in credit card debt, even though she had only accumulated $4,000. Upon examining the lawsuit, the Times found that the documents said they were produced in 2004, even though the advertisements on the bottom of the page were from 2010.

American Express borrower Felicia Tancreto was sued for $16,000. She admitted having fallen behind on payments, but contested owing that much. After attending court, the judge dismissed the lawsuit for lack of evidence.

But in most cases, the borrowers do not attend court, causing the lenders to win 95 percent of the time.
“Our concerns center on the fact that debt collection lawsuits are a pure volume business. The documentation is very bare bones,” said Tom Pahl, assistant director for the Federal Trade Commission’s division of financial practices.

The extent of the “robo-signing” is not known, but the erroneous lawsuits have been a problem for years. In April 2011, JPMorgan Chase & Co. abandoned over 1,000 debt collection lawsuits after their bank documentation was questioned by courts.

But unless lawsuit victims defend themselves in court, suspicious judges suspect the credit card companies will continue to get away with overcharging their clients.

“I do suspect flaws,” said Harry Walsh, a superior court judge in California. “But there is little I can do.”

via Russia Today

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  • Liam_McGonagle

    To riff off Yakov Smirnoff:  “In America, credit card buys YOU!”

    But more seriously, any “libertarians” out there care to comment on ‘voting with their dollars’ by depleting their life savings defending themselves from predatory collection suits by banks and credit card companies?

    • http://wearechangeatlanta.com/ Camron Wiltshire

      That is a very good point Liam.  I imagine (just my conjecture) many libertarians would offer that in a freemarket this type of predatory lending would be held in check by competition.  I do know actual libertarians who have spent their life savings fighting the system and are now working to correct the system from within.  I think it’s time we all soften our ideological boundaries, connect as humans and focus on solutions together.  Just my two cents.  

      • Liam_McGonagle

        Some people consider the problem to be that citizens have accepted the passive role of merely choosing between 2 equally unrealistic boilerplate options handed to them, instead of proactively creating alternatives themselves.

        I think our society may be a good 10 or 20 years from developing such a proactive democratic ideal to the actual electoral stage.  What we need first is a useful way to discuss issues without reducing them to slogans or watering them down into worthless calls for “bipartisanship”.  We need a medium to argue constructively.

        I recommend more people take up some creative activity.  Could be anything, art, music, philosophy, whatever strikes a person’s fancy–provided they take actual ownership of the content.

        Reposting articles may be a good place to start.  At least they represent a form of research and idea sharing.  But they don’t critically engage the poster in the same way that writing a piece THEMSELVES might.  It’s one thing to see that a reposted article could be improved, but it’s another for the writer HIMSELF or HERSELF to admit that the chosen strategy has some pitfalls.

        The point shouldn’t be to reconcile all differences.  That’d be like turning our mental universe into a mausoleum.  The point should be to find more INTERESTING differences.

      • Simiantongue

        The subject of that post was predatory collection, not predatory lending. Somewhat different aspects within banking industry, though intricately connected.

        As for predatory collection see the link in my other post, apparently free market solutions for debt settlement are ripe with more predatory collection corruption than the government judiciary process.

        As much as I would agree with any criticism of the corruptibility in the government judiciary, at least there is the faint possibility of some type of accountability, the free market solution is apparently downright scandalous.

  • Simiantongue

    This is nothing. You should see the cases that go to private arbitration rather than a court.

    Something like 99.6% are decided in the banks favor. Weeeee!

    If you’re not a reader don’t bother with the link there are no pretty pictures or rad videos to awe you.
    http://www.counterpunch.org/2009/07/20/judicial-apartheid/

  • http://buzzcoastin.posterous.com BuzzCoastin

    years ago I found the Mafia to be better bankers to borrow from
    for one thing, they’re more straightforward & their paperwork is intelligible
    and on the whole, a better class of criminal to deal with