Banks Use Flawed Records in Collecting Debts
AUGUST 13, 2012
“As they work through a glut of bad loans, companies like American Express, Citigroup and Discover Financial are going to court to recoup their money. But many of the lawsuits rely on erroneous documents, incomplete records and generic testimony from witnesses, according to judges who oversee the cases. Lenders, the judges said, are churning out lawsuits without regard for accuracy, and improperly collecting debts from consumers. The concerns echo a recent abuse in the foreclosure system, a practice known as robo-signing in which banks produced similar documents for different homeowners and did not review them.” (New York Times)
Free-market banks probably would not do this.
FEE Timely Classic
“A Free Market in Banking? Not Even Close” by Sheldon Richman