Brooklyn civil court judge Noach Dear says that U.S. credit card companies are filing lawsuits and improperly collecting debt from consumers 90 percent of the time, reports the New York Times.
Judge Dear said that credit card companies often file lawsuits that rely on inaccurate documents and incomplete records. Many also sue cardholders for more money than is owed.
Judge Dear told the New York Times: “I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt."
Credit card companies have come under fire for “robo-signing” documents without properly checking them. Additionally, credit card companies often try to collect money from people who have already paid their bills.
In 95 percent of lawsuits, the credit card companies win because the the borrowers do not show up in court, even though the credit card lawsuits sometimes include falsified credit card statements.
Taryn Gregory, a former JPMorgan Chase employee, admitted that nearly 23,000 accounts had incorrect balances.
Tom Pahl, assistant director for the Federal Trade Commission’s division of financial practices, told the New York Times: “Our concerns center on the fact that debt collection lawsuits are a pure volume business. The documentation is very bare bones.”