American Banker Articles on Debt Collection Practices

by Jeff Sovern

The American Banker has run a couple of pieces on debt collection practices here and here.  The headline of one article says a lot by itself: Bank of America Sold Card Debts to Collectors Despite Faulty Records.  The articles have in turn drawn attention from Joe Nocera of The New York Times ("Why People Hate the Banks"), and a couple of my favorite bloggers, Ed Mierzwinski ("Banks Still Run Amok"), and Bob Lawless at Credit Slips ("One Answer to Why People Hate Banks").

My comment will be modest. The American Banker states:

B of A was not making "any representations, warranties, promises, covenants, agreements, or guaranties of any kind or character whatsoever" about the accuracy or completeness of the debts' records, according to a 2010 credit card sales agreement submitted to a California state court in a civil suit involving debt that B of A had sold to CACH.

* * * It also stated that some of the claims it sold might already have been extinguished in bankruptcy court. B of A has additionally cautioned that it might be selling loans whose balances are "approximate" or that consumers have already paid back in full.

When a debt collector attempts to collect a debt that it knows might already have been paid back in full or extinguished, or the balance of which is approximate, and states the amount of the debt to the consumer--which surely debt collection requires--wouldn't that be a false representation of the character, amount, or legal status of the debt, in violation of section 1692e of the Fair Debt Collection Practices Act? 

 

Comments

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the accuracy or completeness of the debts' records, according to a 2010 credit card sales agreement submitted to a California state court in a civil suit involving debt that B of A had sold to CACH.

[Debt Collection]

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