Credit card companies use erroneous documents in debt collection suits

August 17, 2012 1:32 pm Published by Leave your thoughts

Business owners need to ensure that any lawsuits they file against customers, clients, competitors or partners are accurate and appropriate. Petty lawsuits will only lead to a waste of financial resources and a loss of support in one's industry. However, before filing a necessary lawsuit, Arizona companies may need to speak with a Phoenix business law attorney to ensure that the issue cannot be resolved without litigation.

Numerous lawsuits have recently been filed by credit card companies against consumers who allegedly did not pay off their debt. However, judges in the cases have said that many of these suits are based on inaccuracies and improper debt collection processes, according to The Bulletin.

The news source detailed how this litigation method pursued by the credit card companies is similar to the previous foreclosure issues that banks took part in. These financial institutions were left to settle through a multi-billion dollar payment, as their foreclosure fraud included sending in fake documents regarding mortgage problems.

Credit card businesses like American Express, Citigroup and Discover Financial are also using erroneous documents, fake testimony and incomplete records, according to the judges supervising the cases.

"I would say that roughly 90 percent of the credit-card lawsuits are flawed and can’t prove the person owes the debt," Noach Dear, a state civil court judge in New York, told the news source.

The judges overall seem to be concerned with how these companies are taking advantage of the litigation process, according to a press release on SBWire. With the many charges that credit card companies can enforce on its consumers, this further puts the industry in jeopardy, as many will lose trust in their policies.

To have in place the right contracts and provable claims in court, Arizona businesses may consider using a law firm in Phoenix for their transaction and litigation needs.

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