FedUpUSA

Archive for January 17th, 2012

There wouldn’t be anything wrong with the documentation in these lawsuits for debt collection, would there?

A sampling of court records in the major cities in five states shows that Chase collection suits have virtually disappeared. In a sixth state, Illinois, contract attorneys continue to file small-dollar cases, though at a reduced rate.

It is unclear whether Chase has stopped pursuing collection on many claims nationwide, or if intends to pursue the debts in some other fashion. The bank has not explained its apparent moratorium and declined comment.

Chase’s halt does, however, follow scattered defeats in state courts and a whistle-blower’s allegation that it falsely overstated the balances of thousands of delinquent accounts it sold to a third party. Former Chase employees and debt collection experts insist that the bank would not have abruptly retreated from its collections efforts in the absence of trouble.

A whistle-blower?  I haven’t seen this one before.

This is interesting — there’s no question that the third-party debt collection industry has used questionable tactics for decades and is rarely sanctioned with any sort of effective process.  There is a clown who listed my home address as his cellphone billing address some years ago — who knows exactly when.  He never, not even for a day, lived here — I know the ownership record of this property going back more than 20 years.  Yet I first got bills from AT&T for him here, wrote “return to sender” on them for a few months, and then the calls — including robocalls — started.

It took me months to figure out what collection agency was calling too — they’re pretty good at trying to hide themselves.  I finally did, and told them the next call they made was going to cost them money, as I’d be more than happy to file a small-claims suit against them as they had violated a half-dozen provisions of the FCRA (never mind that the debtor never lived here.)

They shut up and went away; I’m sure they bought the debt for a nickel on the dollar and figured they’d hit pay dirt once in a while on a few of these accounts, making it worth it.

But if banks themselves cannot prove up their debts, that’s an entirely different — and potentially very serious — matter, as all these debts are, of course, being carried at significant value on their balance sheets.

If there’s no ability to prove up those debts in court then they literally have zero — or nearly so — actual value, contrary to those claims.

This situation bears watching.

Back on January 5, when we first broke the news that the US debt ceiling has been reached, and breached, yet again, we said “And now the Social Security Fund pillaging begins anew until Congress signs off on the latest interim debt ceiling increase.” Sure enough, operation rape and pillage is a go.

• U.S. SUSPENDS PAYMENTS TO PENSION FUND TO AVOID DEBT CAP BREACH
• GEITHNER INFORMS CONGRESS ON SUSPENSION OF PAYMENTS TO FUND
• GEITHNER SAYS `G’ FUND PARTICIPANTS `UNAFFECTED’ BY SUSPENSION
• GEITHNER SAYS `G’ FUND TO BE MADE WHOLE AFTER DEBT LIMIT RAISED
• GEITHNER: DEBT LIMIT WILL BE INCREASED JAN. 27 UNLESS BLOCKED

In other words: Congress better pass the debt ceiling prontt, or else it will have to explain to government retirees the tens of billions in deficit funds, i.e., marketable debt, already issued will permanently offset the level in G-fund holdings.

Lastly, any comparison to similar acts of commingling performed by other insolvent entities in recent months is purely coincidental and no Obama handlers were thrown in jail as a result of this post.

ZeroHedge