Bank of America Sold Card Debts to Collectors Despite Faulty Records

[Newsjock]

Source: American Banker

In a series of 2009 and 2010 transactions, Bank of America sold credit card receivables to an outfit called CACH LLC, based in Denver. Co. Each month CACH bought debts with a face value of as much as $65 million for 1.8 cents on the dollar. At least a portion of the debts were legacy accounts acquired from MBNA, which Bank of America purchased in 2006.

The pricing reflected the accounts' questionable quality, but what is notable is that the bank could get anything at all for them. B of A was not making "any representations, warranties, promises, covenants, agreements, or guaranties of any kind or character whatsoever" about the accuracy or completeness of the debts' records, according to a 2010 credit card sales agreement submitted to a California state court in a civil suit involving debt that B of A had sold to CACH.

In the "as is" documents Bank of America has drawn up for such sales, it warned that it would initially provide no records to support the amounts it said are owed and might be unable to produce them. It also stated that some of the claims it sold might already have been extinguished in bankruptcy court. B of A has additionally cautioned that it might be selling loans whose balances are "approximate" or that consumers have already paid back in full. Maryland resident Karen Stevens was the victim of one such sale, which resulted in a three-year legal battle (see related story).

... At Bank of America, records declared unreliable yet sold to CACH were used to file thousands of lawsuits against consumers, according to a review of hundreds of cases in the state courts where collection suits are typically filed. The overwhelming majority of cases end in default judgments, which are awarded to creditors when borrowers don't show up to contest the claims made against them.

Read more: http://www.americanbanker.com/issues/177_62/bofa-credit-cards-collections-debts-faulty-records-1047992-1.html

[truebrit71]

1. It is one of my fondest wishes that Skank of America goes bankrupt...

...and the thieves, liars, and soul-less assholes that direct that company get scorching cases of genital herpes....

[RobinA]

2. Oh, They All Do This

I had a dispute with Blue Cross during which they basically said I was right (they double billed me, I only paid once), but they insisted that I jump through all kinds of hoops. For instance, they said I needed to write them a letter (I had written many) stating exactly what they told me to state, word for word. I refused, stating that if they knew enough to tell me what to write, they knew enough not to need another letter from me. That was the last I heard, but then a year later I started getting calls from a collection agency. I returned one and told the woman that as far as a knew the dispute had been settled. She clicked her computer a bit and agreed with me that it was settled. Yet I continued to get calls from the collection agency for a coupl years.

This same thing happened with Macys, when my card (on an account that I had supposedly closed years ago) was stolen and used successfully. Years later, I start getting collection notices. I explained the situation to them and they went away. However it is still on my credit report as a "dispute." Ironically, I tried to open a Macy's card 6 months ago AND THEY GAVE ME ON. Some dispute. They just sell these accounts and then someone else gets to get what they can out of it. So the new company threatens everybody, figuring they will shake a certain amount of the money out of the tress. Not from this cowgirl.