Collection Affidavits Focus of Exposé of Debt Buying Practices

The use of the court system by debt buyers for years has been a focus of both reporters and regulators. The well-chronicled practice of “robo-signing” affidavits to attest to the validity of debt now has a new entry. But the piece goes further, calling into question the relationships between debt buyers and issuers.

CreditCards.com Wednesday ran an article titled, “Robo-signed collection cases under fire.” The piece provides a comprehensive background on the robo-signing issue with regard to debt buyers and collection lawsuits.

The site summed up the problem thusly:

Lawsuits filed to collect old debts usually rely on sworn statements called affidavits. Debt buyers draw up these statements to stand in for account records — contracts and account statements — as proof of the debt. Signers of the affidavits swear that they have reviewed account data to ensure that the claim is accurate. But a number of court cases found that major debt buyers churned out the affidavits without checking records. In a landmark class-action suit against debt buyer Midland Funding, for example, employees of the debt buyer admitted to signing affidavits at rates of 200 to 400 a day.

But beyond recounting what has been covered previously, including here on insideARM.com, the CreditCards.com piece explores the relationship between debt buyers and the credit issuers from whom they acquire accounts.

The article notes that the Federal Trade Commission’s recent report on the debt buying industry laid a lot of blame for bad information at the feet of issuers. Still, debt buyers are filing suits with this often-incomplete information.

The piece also explores the issues Chase has had in its dealing with debt buyers, most notably those that arose in the aftermath of the firing of Linda Almonte.