Why you should always contest a credit-card lawsuit - Reuters article with very interesting links
This excellent brief piece was published in Reuters last month. Please follow the links in the first sentence to a New York Times opinion piece by Joe Nocera, and to Jeff Horwitz's outstanding investigation published in The American Banker.
Here's my executive summary of some of the salient points:
Big banks have been selling off delinquent credit card debt wholesale to companies called Junk Debt Buyers or JDBs for pennies on the dollar, often without sufficient documentation to support collection. The flaws include missing credit agreements and questionable derminations of account balance. Borrowers can often protect themselves from collection by simply answering and contesting a summons, if the case even gets that far. I'm sure it comes as no surprise to most of us that big players like JPMorgan Chase and Bank of America are systematically taking advantage of the collectors by including (in portfolios of delinquent accounts) worthless debt sold "as-is" with no warranty.
If you are facing a collection process for credit card debt, you have nothing to lose and much to gain by putting up even a minimal fight and not allowing the matter to go to a default judgment. There is a very high probability that the collector will not be able to prove the alleged debt amount or even that the debt exists.
This piece leads to a lot of recent investigative work and engaging reading for anyone who is interested in the topic.
http://blogs.reuters.com/felix-salmon/2012/04/03/why-you-should-always-contest-a-credit-card-lawsuit/
