The Minnesota attorney general is suing a Florida company that was a major buyer of overdraft debt from Minnesota banks, accusing it of churning out reams of fake bank affidavits to use in its collection from individuals and businesses. United Credit Recovery LLC was allegedly churning out computer-generated affidavits with bank logos, cutting and pasting supposedly notarized signatures of bank officials onto the documents to make them look authentic. The electronically robo-signed documents were used for years on a “mass scale,” not only to persuade people that they owed the money but also to convince courts to award judgments and to hike the value of portfolios for resale, according to a complaint the state filed Wednesday in Hennepin County District Court.
Attorney General Lori Swanson said her office doesn’t know how many Minnesotans were affected, but it’s at least several thousand. “The numbers are really astronomical,” Swanson said in an interview. The affidavits go beyond the traditional robo-signing that was a hallmark of the country’s mortgage debacle, where employees physically signed stacks of paper without regard to the facts. “Here it’s a cut-and-paste job. It takes traditional robo-signing to a whole new level,” Swanson said. “We have not seen this scale both in terms of the brazenness of it and the sheer numbers.”
For more information about this specific case, see Courthouse News Service’s article.
For some further context on this wider scandal, see New York Times, 31 October 2010:
“The difference is that in the case of debt buyers, the abuses are much worse,” says Richard Rubin, a consumer lawyer in Santa Fe, N.M.” At least when it comes to mortgages, the banks have the right address, everyone agrees about the interest rate. But with debt buyers, the debt has been passed through so many hands, often over so many years, that a lot of time, these companies are pursuing the wrong person, or the charges have no lawful basis.”
See also New York Times, 12 August 2012:
“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” said Noach Dear, a civil court judge in Brooklyn, who said he presided over as many as 100 such cases a day.
Interviews with dozens of state judges, regulators and lawyers, however, indicated that such flaws are increasingly common in credit card suits. In certain instances, lenders are trying to collect money from consumers who have already paid their bills or increasing the size of the debts by adding erroneous fees and interest costs.
At times, lawsuits include falsified credit card statements, produced years after borrowers supposedly fell behind on their bills, according to the judges and others in the industry. “This is robo-signing redux,” Peter Holland, a lawyer who runs the Consumer Protection Clinic at the University of Maryland Francis King Carey School of Law.
- Where is the media on this? A search for “United Credit Recovery” on Google News currently brings up only 6 results.
- Why aren’t criminal charges being pursued? Forgery on official legal documents is a serious offense, at least I thought it was. According to Minnesota’s laws: “Whoever intentionally presents for filing, registering, or recording, or files, registers, or records a false or forged instrument relating to or affecting real or personal property in a public office entitled to file, register, or record such instrument when genuine may be sentenced to imprisonment for not more than three years or to payment of a fine of not more than $5,000, or both.”
It’s amazing how blatant this is getting. It probably already has occurred that these agencies are just fabricating debt out of thin air from people.