Customers who believe that they have been improperly sued by Bank of America (BoA) have filed a class action lawsuit against the financial institution. The suit alleges that BoA sued customers for unpaid credit card debt on debts that were securitized. These debts were sold, assigned, or transferred to a trust via credit card securitization, a financial move that resulted in BoA relinquishing its debt obligation.
Willard v. Bank of America, et. al was brought by G. Veronica Willard and was filed on March 15 in Pennsylvania’s Eastern District. The case alleges that BoA violated the Pennsylvania Fair Credit Extension Uniformity Act and the Fair Debt Collection Practices Act. It requests BoA pay punitive, actual, treble, and statutory damages along with injunctive and declaratory relief, attorney’s fees, the costs of suits, and other relief.
By Donna Smith / Common Dreams
This piece first appeared on Common Dreams.
The issue of medical debt and bankruptcy has been a part of my life since I first discovered how many Americans are driven into bankruptcy by our for-profit healthcare system. On July 17, 2007, I testified on a witness panel for the U.S. House Judiciary Committee as an American who went bankrupt while insured. Sitting next to me on that witness panel was then Harvard Law Professor Elizabeth Warren, who was one of the co-authors of a groundbreaking study on medical debt and bankruptcy. Neither one of us knew each other nor did we have any way to know we would follow our respective paths into this election cycle. Despite a few subtle hints, U.S. Senator Elizabeth Warren (D-Mass.) has stayed out of the endorsement game so far.
Two years later, I would appear on Bill Moyers Journal where they were able to retrieve a bit of that congressional testimony about 10.34 minutes into this segment that aired on May 22, 2009. From that momentous point in my life forward, I have kept up with Sen. Warren’s career, especially on the topics of interest to me. So when I recalled another time I heard Sen. Warren discuss issues related to bankruptcy law, I was taken by her clarity about what happens when representing Wall Street interests becomes more important than doing what is right for large numbers of Americans who have been devastated financially by health crises, medical debt and bankruptcy.
During Elizabeth Warren’s own appearance on Bill Moyers Journal, she describes in vivid detail one time when Wall Street influence appeared to have caused Bernie’s primary opponent, then Sen. Hillary Clinton, to change her position on bankruptcy law in a very significant way. Before she was a U.S. senator representing New York, Hillary knew the bankruptcy law would hurt people like me and millions of Americans. Hillary changed her mind after being elected to the Senate. If the influence of the financial service industry wasn’t a factor in that change of position, then perhaps another explanation will be forthcoming. Let me be very clear, this appearance by Warren was years ago and well before anyone could have envisioned a Bernie run at the presidency. The video seems to confirm the sort of influence peddling Wall Street does and just how accurate Bernie’s reflections are in 2016 about and what is at stake.
OCC Pressures Banks to Clean Up Card Debt Sales
Major banks face a wave of state investigations into sales of defaulted credit card debt. Now the banks may be facing an even more pressing challenge from their primary federal regulator, the Office of the Comptroller of Currency
Chase Halts Card Debt Sales Ahead of Crackdown
JPMorgan Chase (JPM), which is bracing for a crackdown over its credit card debt collections practices, is trying to give regulators less ammunition.
The nation’s largest bank has halted most sales to third-party collectors of debts it has already charged off its own books. Bank executives have cited concerns that such sales could cause further damage to its reputation, according to sources familiar with its actions. Court records show that third-party collectors’ lawsuits over Chase debts have dropped off precipitously since the beginning of the year.
A group of state attorneys general is looking at the possibility that banks have sold credit card accounts to debt collection firms that were supported by inaccurate and robo-signed documents.
On a side note: reporters said that state AGs spoke with Chase’s employees in San Antonio Texas and Frederick, Virginia. Here is the video: http://t.co/i0F20Rz0
Discover Financial Services (DFS) has agreed to refund hundreds of millions of dollars to settle a regulatory probe of its credit card marketing practices.
The issuer’s Discover Bank subsidiary will return $200 million to cardholders who purchased credit card protection products from the company via telephone unknowingly over a roughly three-and-a-half-year period beginning in December 2007, as part of an agreement with the Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau, the company said late Friday,
Discover also agreed to pay a combined $14 million in penalties to the agencies and to improve its sales practices.
“We have worked hard to earn the loyalty of our cardmembers, and we are committed to marketing our products responsibly,” Discover CEO David Nelms said in a news release.
American Banker (subsciption req.):
Echoing elements of the mortgage robo-signing controversy, investigators are looking at whether JPMorgan Chase and other banks botched the documentation and amounts owed on credit card debts they sold.
Credit card firms and collection companies are churning out slapdash lawsuits to collect unpaid sums, say exasperated consumer advocates and some judges.
Judges complain that many lawsuits are so lacking in documentation, it’s impossible for them to know who’s right or wrong. Advocates say the companies sometimes victimize card holders by inflating the amounts owed, not giving their targets proper notice, and suing for debts already paid.
“They do get pretty loosey-goosey on documents,” said Frank Cox, the chief magistrate court judge in Cobb County. “When they are contested, most of the time they can’t present sufficient evidence to win the lawsuit.”
The companies defend their practices and accuse consumers and their lawyers of using diversionary tactics and legal loopholes to deprive them of money legitimately owed.
From the article:
As they work through a glut of bad loans, companies like American Express, Citigroup and Discover Financial are going to court to recoup their money. But many of the lawsuits rely on erroneous documents, incomplete records and generic testimony from witnesses, according to judges who oversee the cases.
Lenders, the judges said, are churning out lawsuits without regard for accuracy, and improperly collecting debts from consumers. The concerns echo a recent abuse in the foreclosure system, a practice known as robo-signing in which banks produced similar documents for different homeowners and did not review them.
“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” said Noach Dear, a state civil court judge in Brooklyn, who said he presides over as many as 100 such cases a day….
The problem, according to judges, is that credit card companies are not always following the proper legal procedures, even when they have the right to collect money. Certain cases hinge on mass-produced documents because the lenders do not provide proof of the outstanding debts, like the original contract or payment history.
At times, lawsuits include falsified credit card statements, produced years after borrowers supposedly fell behind on their bills.