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Some judges on East Coast say flaws exist in credit card debt lawsuits

The idea of "robo-signing" made news during the heyday of the foreclosure scandal. Now, some judges on the East Coast who hear cases involving credit card debt are raising concerns that flaws are showing up in cases--one judge reportedly told the New York Times that an employee of at least one creditor provided generic testimony about the creditors records that amounted to what the judge characterized as "robo-testimony."

The judge further told the Times that he "would say that roughly 90 percent of the credit card lawsuits are flawed and can't prove the person owes the debt." Lawsuits seeking payment on a debt may end in a judgment on the debt. Some debtors may oppose the debt altogether, or dispute the amount of the debt.

The flawed records, if accepted in a civil court case, may lead to a judgment. Many creditors use a judgment on a debt to seek to garnish wages or seize assets in a bank account, which can cause increased stress for a person who is already struggling financially.

The employee who the judge believes has provided "robo-testimony" had testified in a case before the judge in April. The judge said the employee had provided similar testimony in other cases about the creditor's records. The judge dismissed the case in April finding a lack of evidence, according to the Times. American Express had sued a woman claiming that she owed more than $16,000 on her credit card.

Some judges believe that credit card companies may not be following the proper procedures, resulting in a new kind of "robo-signing" type issue, according to the Times. But the credit card companies dispute that there is any problem. An American Express spokesperson denies the judge's comments about flawed records. She reportedly says that the company has policies to ensure accuracy in testimony and affidavits filed with the court.

Source: New York Times, "Problems Riddle Moves to Collect Credit Card Debt," Jessica Silver-Greenberg, Aug. 12, 2012

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