The pervasive financial instability that persists in this country has taken a different turn as credit card issuers and collection agencies, who buy overdue credit card accounts in bulk, ramp up their aggressive tactics in pursuing litigation against consumers. Wites & Rogers, a law firm that represents consumers who find themselves in court over lawsuits concerning credit card debt, reports that creditors often use robo-signing and boilerplate affidavits to support their lawsuits against consumers.
As litigation over consumer debt mounts, however, some of the tactics in these lawsuits resemble those that marred the mortgage foreclosure cases a few years ago. “We are seeing more and more complaints and evidentiary filings that appear ‘robo-signed,’” commented attorney Marc Wites. He explained, “we see lawsuits that are computer generated in a generic manner so that there is no way to tell to whom the company claims the credit card – or cards – were issued by, how the company claims to own the debt, or even the basis for the amount of the debt. Sometimes, in collection agency lawsuits, they don’t even identify of the original creditor.”
The issue also comes up in later evidentiary filings in affidavits signed by company personnel with no apparent personal knowledge of the facts to which they attest. “The affidavits are usually form documents which contain errors and information irrelevant inapplicable to the particular case that it is obvious that no one even read them before filing with the court,” observed attorney Marc Wites .
These concerns, which the firm has observed in cases over the last couple of years, have been the focus of recent media attention by the New York Times, Time magazine, ABC, American Public Media, and other news outlets around the country after a New York state court judge, who sees about 100 credit card collection cases a day, estimated that 90% of the cases are based on legally-flawed evidence.
As the number of consumer debt defaults increase, banks and other lenders bundle the debts and sell accounts in bulk to collection agencies who then pursue some of the consumers. Many collection agencies, in turn, sell off accounts in bulkto other collection agencies. In the process of these sales and transfers, records are lost, the source ownership and basis for forming the alleged balance of the debt becomes murky, and errors occur, such as lawsuits by more than one company suing over the same debt.
“The reality is that these companies file the lawsuits expecting that most consumers will not respond to them, and they will go into default,” Wites & Rogersobserved. The number of lawsuits where this happens is overwhelming. However, there are so many errors in these cases that consumers may find themselves facing court judgments for incorrect amounts, or from entities that do not even own the debt.
When representing consumers in court Wites & Rogers aggressively protects their interests, to ensure that the entity suing them can prove their right to collect any debt and prove that the amount sought is accurate. “We scrutinize each boilerplate affidavit and call into question the record custodian’s trustworthiness and qualifications to provide testimony based upon a variety of factors including inconsistencies in the documents themselves, unsubstantiated testimony about account activity, and the record custodian’s lack of qualification to testify to the statements in the affidavit,” explained Wites & Rogers attorney Steven Canter.
“The rules of evidence apply to everyone in court; there is no exception for companies who claim to own consumer debt,” noted Law. “Consumers need to understand that they have rights, and we do our best to protect their interests in these cases. In fact, many debt collection lawyers seem annoyed when we appear in a case because it derails their usual practice of filing the case and getting a judgment without a fight from the consumer.
