Is Robo-Signing Sequel Being Put on Plastic?

On Wednesday, we discussed how some Chicago-area homeowners are now dealing with foreclosure notices as lenders begin to tackle backlogs that were amassed while states investigated "robo-signing" fraud. As it turns out, the practice in which bank employees sign thousands of documents and affidavits without verifying the information was not just limited to foreclosures.

On August 12, 2012, the New York Times reported that the same "robo-signing" problem is now emerging in the debt collection practices of credit card companies as well. Judges who oversee these cases told the Times that lenders are "churning out lawsuits without regard for accuracy, and improperly collecting debts from consumers." Worse yet, many judges told the Times that "their hands are tied" and they cannot question the banks or comb through the lawsuits to root out suspicious documents unless a consumer shows up to contest the lawsuit.

"I do suspect flaws," Harry Walsh, a superior court judge in Ventura, California, told the Times. "But there is little I can do."

"I would say that roughly 90 percent of the credit card lawsuits are flawed and can't prove the person owes the debt," Brooklyn civil court judge Noach Dear told the Times. He said he presided over as many as 100 such cases a day.

Are you being harassed by debt collectors for outrageous-possibly even exaggerated-credit card payments? You may be able to wipe out your credit card debt by filing Chapter 7 or Chapter 13 bankruptcy. Contact our firm today at (866) 930-7482 or complete the form located on this page to see how our Chicago bankruptcy attorneys can help.

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