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Debt collection firms implicated in robo-signing scandal

On Behalf of | Apr 26, 2013 | Credit Card Debt, Firm News

We’ve written in the past about the hasty and careless practices at debt collection firms. In a previous post, we discussed a Florida company that was harassing a woman who didn’t even have an active debt. Recently, reports have emerged that debt collection companies from all over the country have been using robo-signing practices to initiate judgments against borrowers.

It is typically very easy for debt collection companies to get judgments against debtors by presenting sworn statements to the court. The statements are presented in lieu of account records and contracts but are guaranteed to be true by the signers of the affidavits.

The scandal emerged when several court cases involved an investigation into those affidavits which lead to the discovery that they were being written and submitted to the court without checking the actual records for the borrower. A class action lawsuit against a major debt collection company eventually found that employees were signing between 200 and 400 of these sworn statements every day, which would be impossible to fact check or verify even for the fastest reader.

This hasty and irresponsible process resulted in serious harm for borrowers who were sometimes sued for debt that was acquired in their name as the result of identity theft or who were sued twice for the same debt.

In some cases, even the affidavits saying that the borrower had been properly notified of the action against them were found to be unverified and false.

Not only are these practices unacceptable and unfair to borrowers trying honestly to resolve debts, but a federal judge also deemed them to be fraudulent and certified class action status to suits seeking a remedy from the same company.

This is just one more example of the way the debt collectors routinely mistreat borrowers and use unfair and unlawful tactics to collect. Borrowers have a right to put an end to these harassing tactics even if they do still owe money.

Source: Fox Business, “Robo-Signed Collection Cases Under Fire,” Fred O. Williams, April 26, 2013.

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