Judge: Ninety percent of credit card lawsuits can’t prove the debt

Problems Riddle Moves to Collect Credit Card Debt – NYTimes.com.

Credit card companies are now coming under close scrutiny regarding the amount of proof they are presenting in state court debt collection proceedings.  Much in the same way mortgage servicers have been blasted for shoddy, incomplete and sometimes blatantly false supporting documentation, credit card collectors are now being criticized for offering “robo-testimony” in debt collection proceedings.

The Federal Trade Commission has stated that in a recent review of the consumer litigation system, credit card issuers were basing their collection lawsuits on incorrect or incomplete paperwork.

Adding to the problem is that an estimated 95 percent of people never show up in court to challenge the debt collectors and lose by default.  Losing in a state court debt collection proceeding can lead to garnishments of wages and bank accounts.  Unless a consumer shows up in court to dispute the debt, there is little a judge can or will do to help them.

 



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