We often see notices of default that are unsubstantiated, and fail under any threshold evidence tests.
This is from Professor Katie Porter and her blog www.creditslips.org.
Lying Is Wrong
You might think that we all caught the lesson that lying is wrong somewhere between Sunday School and warnings that Santa only brings presents to good boys and girls. But an Ohio federal court recently caught a debt buyer making a a load of lies–under oath, no less. The opinion in Midland Funding v. Brent shows the underbelly of debt collection and just how far such high-volume, routinized, computerized processes have strayed from the idealized litigation model of truth-telling.
The case began when a debt buyer purchased defaulted credit card debt and filed suit against a consumer. The debt buyer’s law firm used the debt buyer’s “You’ve Got Claims” system (really, that is its name) to request an affidavit from the debt buyer to file in support of the collection case. Where do such affidavits come from? According to later testimony of the debt buyer’s employee who signs 200 to 400 affidavits per day, “they just come from the printer” (again, I’m not making this up.) The court couldn’t square that answer with the first paragraph of the affidavit in which the employee attests that “I make the statements herein based upon my personal knowledge.” The court goes on to describe the affiant’s lack of knowledge of nearly all the facts in the affidavit, noting that the affiant did not retain the attorney, was not familiar with the account, did not know the last time a payment was made, did not know if the consumer was a minor or mentally incapacitated, and did not know the outstanding balance. As an additional disability, the affidavit wasn’t actually signed in the presence of a notary, making it improperly sworn. The court ruled that the use of the false, deceptive and misleading affidavit in the debt collection suit was a violation of the Fair Debt Collection Practices Act.
The law in Midland is boring. It is wrong to lie to a court, and it is wrong to lie in a debt collection. The action here is that there actually was an action. Some consumer went to the effort to put a debt buyer’s affidavit to the test, leading to the conclusion that the process for generating such affidavits was sorely lacking. How many debt buyers, or default mortgage servicers, also have employees who get their affidavits “from the printer?” Or who have “personal knowledge” of consumers they have never met and of accounts they have never reviewed? Or who send affidavits “off to be notarized?” If the processes used here are typical of the industry, there could be a lot of liars out of luck.