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A lawsuit
brought by the state of Colorado late last year sheds light on the world
of buying charged off consumer debt. In a lawsuit against several debt
collectors and debt buyers Colorado said the companies had purchased thousands of charged off debts from U.S. Bank and Wells Fargo for likely just pennies on the dollar.
But even though the banks transferred the debts to the companies, no
documents related to the debts were also transferred. The only document
provided to the debt buyers was a spreadsheet containing information
about the account holder's name, address, Social Security number, amount
of debt and the date the debt was charged off. If the debt buyers
requested additional documents related to each account they were
allegedly charged more money by the banks. Because of the limitations on
obtaining account documents directly from the lenders, the
state of Colorado alleges that at least one of the debt buyers "engaged
in a routine and pervasive scheme to fabricate documents" when
pressed to do so by a defendant consumer. Unfortunately, most consumers
do nothing when sued by a debt collector. If you're facing debt
collection contact us immediately so we can discuss what defenses might be available.
