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Are the Feds Taking Aim at Shoddy Debt Collection?

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According to the Boston Globe, federal regulators are widening an on-going probe into the nation’s biggest banks to determine whether these banks have been using flawed documents and incomplete records to collect on delinquent credit card debts. The probe began in 2011 when JPMorgan Chase was accused of using error-filled documents in lawsuits against debtors.

Basically, what happens is the bank files a lawsuit against a delinquent credit card holder, filing only incomplete or inaccurate records to back the claim, and then hopes the debtor will either not respond to the lawsuit nor hire an attorney to properly defend their rights in court. The bank ends up with a judgment that they can then use to garnish the debtor’s wages or levy their assets without the debtor receiving a proper defense.

See the full article here: http://www.bostonglobe.com/business/2013/05/28/regulators-probing-banks-for-faulty-debt-collection-practices/M0dzj4xok521Boz5cjOcDL/story.html

These underhanded tactics echo the wave of shoddy foreclosures that hit after the housing market collapsed where mortgage servicers were accused of falsifying records and “robo-signing” hundreds of documents without actually reviewing them.

If the federal regulators find evidence of abuses in debt collections, they could levy fines and issue an order compelling the bank to amend its practices.

In the meantime, if you have been served with a lawsuit on a delinquent credit card debt, contact a debt settlement attorney immediately. A debt settlement attorney will know how to spot flawed or incomplete documents and how to get the loan properly validated so that you do not fall victim to the banks’ illegal and underhanded tactics. A debt settlement attorney can also negotiate the debt to a fraction of what you owe, getting rid of both the lawsuit and debt at the same time.

Are the Feds Taking Aim at Shoddy Debt Collection? was last modified: November 1st, 2014 by Kevin Fallon McCarthy
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Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.
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