Debt collection practices focusing on erroneous documents, incomplete records and generic testimony from witnesses in lawsuits by credit card companies is mirroring problems similar to those in the mortgage foreclosure process. According to Noach Dear, a civil court judge in Brooklyn, about 90% of the cases he sees are flawed and cannot prove who the person is that owes the debt. This has resulted in a multi-billion dollar settlement with big banks for their defective collection practices.
1. What types of defective practices did the article highlight? How much was the settlement?
2. Which company is the Office of the Comptroller of the Currency investigating and why?
3. According to the article, borrowers are behind on $18.7 billion of credit card debt, which is roughly 3 percent of the total. Based on this information, what is the total credit card debt?
Silver-Greenberg, S. (2012). Problems Riddle Moves to Collect Credit Card Debt. The New York Times, August 12 (Retrievable online at http://dealbook.nytimes.com/2012/08/12/problems-riddle-moves-to-collect-credit-card-debt/?hp)