It is no secret anymore that the majority of the collection lawsuits are entirely bogus or are based upon false information — the amount owed, etc. Debt collectors (debt buyers) don’t have proof that the consumer owes the debt collector.
A Judge recently commented that 90% of the collection suits are based upon faulty proof.
This has led to a firestorm and the debt collection industry is scrambling to fight back because once the public knows that the same nonsense that occurred in the mortgage industry is occurring in the credit card industry, the public will turn on the credit card companies and the debt buyers.
Notice what the collection industry spokesperson says — and his attempt to be clever and change the focus. I will give him credit, he was trained very well for this. It is still bogus and not particularly skilled but he was trying. Expect to see more of this as the industry marches lock step on this lie.
REHM10:15:59 What do you — or how do you respond to the New York judge who said that 90 percent of the credit card debt cases have fraudulent documentation or generic witnesses?
BARTLETT10:16:16 I respond with an incredulous shake of my head. I don’t know the judge, and I read that case — or read that judge’s comment. The idea that 90 percent of transactions could be fraudulent just is — defies any — the most bizarre science fiction you could — imagination. So test it yourself. Call tonight, look on your credit card statement, call the 800 number and say, hey, this third item on the bill, I want to know what it’s all about.
BARTLETT10:16:40 Credit card company will tell you, just from that phone call, what you bought, when you bought it, what time of day, whether you left a tip and when it’s due, so it defies imagination that so — take this fifth item on your account or take another account, and you get the same answer. So the idea that 90 percent or even 9 percent would be fraudulent makes no sense. The borrower bought a washing machine and is using the washing machine.
REHM10:17:07 Steve Bartlett, he is president, chief executive officer of The Financial Services Roundtable.
The judge talked about fraudulent documentation in the lawsuits.
Not that the transactions listed on your current credit card statement are fraudulent. The industry can’t argue about all of the bogus lawsuits. That is a losing argument.
So the industry is trying to rewrite what the judge (and many others over the past few years) actually said. The issue is bogus documentation. The issue is debt buyers who don’t own the debt suing.
Sure Joe Blow may have defaulted on a Citibank account.
But does that mean he owes Midland or LVNV or Portfolio Recovery?
Only if they truly own the debt.
So why don’t they prove they own the debt when they sue?
They either don’t have the proof or, just like in the mortgage industry, they are so sloppy and care so little for the intergrity of the judicial system that it is unimportant to them.
Peter Holland, a great consumer attorney and professor, points this out:
HOLLAND10:20:47 That consumer should pay for it. We are not talking here, Diane, about people who owe money and the so-called, you know, will they owe the money anyway? What we’re really talking about — and judges have coming out more and more — we’re talking about an assault on the integrity of the judicial process itself by filing incomplete paperwork, by filing sometimes false paperwork, forged paperwork, robo-signing. So just like I believe that every person should pay what they owe, a parallel American value is don’t stake a claim to something that you don’t own.
HOLLAND10:21:28 And what happens in these cases, because of the incomplete documentation, OK, no contract is filed with the lawsuit, yet they want 30 — 29 percent interest rate. They want a $39 late fee every month. They want a $39 over-the-limit fee. They want lawyer’s fees. Well, if you’re going to ask me to pay all of those, what I call, junk fees, but — if you want to make me to pay those fees, don’t you think you ought to have the contract that contains the provisions that says I owe them?
You can read the entire interview by Diane Rehm here — it also includes some excellent comments from Thomas Pahl of the Federal Trade Commission and Kathy Kristof of Kiplinger’s Personal Finance.