In recent years the number of filings in the New York Civil Court to collect unpaid credit card debts has skyrocketed. The New York Times recently reported on this unfortunate development for consumers in an article entitled: In Civil Court, One Nation, Under Debt. Here is a brief excerpt:
The lawyers for the banks had virtually no documents on the cases, just printouts with names, account numbers and the amount that was supposedly owed. When it was Miranda Gee’s turn, she produced papers showing that she held a different account with Capital One than the one listed on the printout, which claimed that she owed about $1,000.
These attorneys often are employed by debt collection agencies, not banks, who have purchased the debts for pennies on the dollar. For that reason, they come to court without key documents supporting their claims such as the original credit card contract and monthly statements.
Given this situation, debtors, who the majority of the time are unrepresented, have viable defenses that they can assert such as: lack of privity and lack of standing (translated: the debt collector cannot legally prove that it owns the debt); the documents in the possession of attorneys are hearsay and cannot be authenticated; violation of the statute of limitations (note: if the credit card contract has a clause stating that Delaware law applies, the statute of limitations is trimmed to 3 years); and that the penalties and interest rate increases are usurious.
Armed with this knowledge, consumers may be able to fight it out successfully before the judge or negotiate a fair settlement.
In any case, with filings involving debt on credit cards nearly tripling since 2000 with court officials projecting a total about 350,000 this year, it is clear that the New York Civil Court has become a Credit Card Court.
Click here for a look at a related report issued in June 2008 by MFY Legal Services.
Bookmark/share a post