Robo-Signing: Inaccuracies in Credit Card Lawsuits

Over the last couple of years, an issue with mortgage industry’s robo-signing has been a subject of controversy. Robo-signing refers to documents against homeowners whose homes are about to be foreclosed, which were allegedly reviewed by are in fact, inaccurate. Instead of presenting the right information or correcting errors, someone will sign the declarations and affidavits and disperse them to the recipients.

One notable company that practices robo-signing was Chase bank. In a credit card lawsuit, Chase bank was found that necessary steps to correct certain errors in their documents were not taken. The fact that Chase bank was caught red-handed in applying questionable practices resulted in the bank halting all credit card lawsuits against consumers as they correct the “underlying internal issues” in document accuracy.

For debtors who are facing credit card lawsuit, this can be both a good thing and a bad thing. For one, because major banks are admitting to have internal issues in document accuracy, the debt claims will be subjected to intense scrutiny first before a summons is handed out. On the other hand, some judges don’t want to hear the argument and will move the credit card cases through the court thus, debtors will not have a fair chance of arguing their cases.

The issue also prompted the Federal Trade Commission and Department of Justice to take action against junk debt buyers who do not try to verify the debt they claimed was owed to them by consumers. The FTC and DOJ is working out a framework which will guarantee that debt claims will remain factual and find a balance between fair and accurate processes for both debtors and creditors.

Of course, it is important that debtors who are facing credit card lawsuit should demand verified, accurate information or seek the help of an attorney to tackle the issue. Although major banks are claiming that the practice of rob-signing is not widespread, the fact that supporting documents for debt claims are not produced readily points to the opposite. In most cases, old, charged-off accounts have been sold and re-sold so many times that getting the necessary documents that proving the ownership of the debt is not as easy and many delinquent debtors achieved favorable ruling from credit card lawsuit just by demanding the right documents to prove whether or not the debt is theirs.

So the next time you receive a summons or quite possibly, looking at a credit card lawsuit, make sure to check your own credit report to see if the figures are in line with the ones indicated on the summons and request proof that you own the debt from the creditor.