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Banks investigated by State AG's for Selling Accounts to JDB's

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When the banks sell delinquent credit card debt to the JDB's they provide very little information - just a list of accounts, names addresses and SS#'s if they have it.


and most times, the accounts are sold " without recourse "


- meaning that the banks don't guarantee that this information is correct , and there is no recourse available to the JDB's if the accounts sold were disputed, ID theft or due to additional charges after the consumer paid off the account.


The JDB's then use these records to file lawsuits and attach affidavits attesting the bank records they claim to hold.





Investigators are finding that the banks often did not provide buyers of the debt with evidence that individual credit card accounts were delinquent. Instead the banks only provided basic information about how much money they thought was owed and who the borrower was, without providing original contracts, past statements, or other additional documentation.



A lot of these debt buyers are flooding state courts attempting to collect debts that they've bought for pennies on the dollar," said Ira Rheingold, executive director of the National Association of Consumer Advocates. "They're filing these affidavits about how much is owed, and who owes it, but the reality is, they have no information




While the banks are not themselves pursuing the questionable judgments on credit card debt, they could be liable for aiding and abetting the practice by providing information they cannot confirm as accurate, people familiar with the states' legal theories said




All ties back to the FTC's investigation of the Big Nine JDB's , http://www.ftc.gov/opa/2013/01/debtbuyer.shtm


and class action lawsuits against Midland robo signing http://creditboards.com/forums/index.php?showtopic=465175&hl=


and class action lawsuits against LVNV funding where 10's of thousands of lawsuits were dismissed. http://articles.baltimoresun.com/2011-09-09/business/bs-bz-debtors-settlement-lvnv-20110909_1_debt-collection-settlement-forgives








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It is way past time to clean up the way debt buyers do business.

They need to be eliminated completely.

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Odds are. they will keep on selling accounts, they will make the banks be more careful on which accounts are sold.


One former employee filed an SEC whistleblower lawsuit, and the OCC investigated Chase



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^^^ and the CRA"s who let the JDB's report these debts should be investigated also.


if they can't legally prove these accounts in courts because the OC won't gaurantee the information is correct,


why is it allowed to be on your credit report?


do the CRA's check to see if you ever had an account with the OC before letting the JDB report it?


usually not, form what i've seen.

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updating -


OCC issued a formal bulletin / guideline on this issue




Certain types of debt are not appropriate for sale. Debt clearly not appropriate for sale, because it likely fails to meet the basic requirements to be an ongoing legal debt, includes the following:


  • Debt that has been otherwise settled or is in process of settlement.
  • Debt of deceased account holders.
  • Debt of borrowers that have sought or are seeking bankruptcy protection.
  • Debt of account holders currently in litigation with the institution.
  • Debt incurred as a result of fraudulent activity.
  • Accounts lacking clear evidence of ownership.
In addition, banks should refrain from the sale of certain additional types of debt because the sales of these types of accounts may pose greater potential compliance and reputational risk. These include:
  • Accounts eligible for Service-members Civil Relief Act protections.
  • Accounts of minors.
  • Accounts in disaster areas.
  • Accounts close to the statute of limitations.

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