Banks and Junk Debt Buyers Cannot Document Their Credit Card Lawsuits.

Junk debt buyers Video

The New York Times’ Joe Nocera’s column Why People Hate the Banks still has many pundits wondering why anyone who is confronted with a credit card lawsuit does not answer their summons and demand proper documentation. It used to be that an original creditor, a credit card bank, was the most difficult to defeat in a credit card lawsuit. But, J.P. Morgan Chase Co.’s problems with robo-signing credit card debt affidavits have caused followers of credit card debts trends to revise that thinking. Now that Chase is no longer suing, what is happening to its outstanding credit card debts? They are being sold to junk debt buyers (JDBs).

junk debt buyers

Junk debt buyers

A purchaser of my Credit Card Debt Survival Guide was being sued in Maryland for a Chase credit card account purchased by a large, well known junk debt buyer. [The suit was subsequently dropped.] American Banker started with Chase, then recently it pointed out the problems of Bank of America’s credit card debt operations.  “Bank of America sold collections agencies rights to sue over credit card debts that it has privately noted were potentially inaccurate or already repaid,” wrote Jeff Horwitz of American Banker.  Each month one junk debt buyer bought debts with a face value of as much as $65 million for 1.8 cents on the dollar, he reports.

Those of us close to these issues have known for some time that if you do get to court and ask for documentation, the debt buyers drop the case (or tries to procedurally trick you into admitting to the debt). It is not worth it for them if they have to provide actual proof.  And now, banks like Chase and Bank of America cannot properly document their claims.  Together those two banks account for one-third of the credit card market, according to

JP Morgan Chase Getting Spanked Again for Illegal DocumentationI had a purchaser of the Credit Card Debt Survival Guide tell me that when he got to the court date for his credit card debt and demanded documentation, the lawyer for the bank, another large credit card operation, said let’s both just go home.  He had no documentation from the bank. So, to avoid public scrutiny and bad PR, the banks want to sell their debts to junk debt buyers (as if they have not done it in the past.)

Here is what one publicly traded JDB wrote in their annual report as reported in the Columbia Journalism Review: “We believe the current trend toward consumer protectionism could lead to judicial proceedings or practices that create increasingly challenging requirements that could limit our ability to effectively pursue litigation on accounts.”

According to the Financial News Network JP Morgan Dropped Pursuit of Many Delinquent Credit Card Accounts [because of its failure to legally document other accounts](Do not be put off by the perceived expense of using an attorney if you are being sued for credit card debt. Consumer rights attorneys who do these lawsuits all the time for indebted consumers, understand how easy it is to win these credit card debt cases and therefore do not charge as much as their inexperienced peers.)

If you owe and cannot afford to pay, now is the time to prepare to resist a credit card lawsuit. Read my other pages and posts.

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