Judge Slams 'Zombie Debt' Buyer In Class Action Over Phony Robosigned Affidavit Filed In Credit Card Collection Lawsuit

The Wall Street Journal reports:

• Employees in Encore [Capital Group']s Midland [Funding] subsidiary work with outside law firms to file debt-collection suits. Midland has a proprietary computer system called "You've Got Claims" that generates unsigned affidavits. In these documents, which are signed and submitted to the court, employees attest that borrowers owe the amount of debt that Midland is suing to collect.

• In a deposition filed as part of a civil lawsuit against Midland, employee Ivan Jimenez testified that he signs 200 to 400 affidavits a day. The percentage of documents checked for accuracy against other records is "very few and far between," he says. "As far as what I deal with, they just come from the printer as far as where we get them."

• U.S. District Judge David A. Katz ruled last year that the debt-collection company violated federal and Ohio laws by trying to collect $4,516.57 in credit-card debt using a phony affidavit. The company certified that the debt was genuine "based entirely" on the printout, rather than personal knowledge of the debtor, the judge concluded.

• He refused a request to throw out the lawsuit, which won class-action status. Judge Katz wouldn't comment on specifics of the case, though he says it shows that lawyers for borrowers should "be more diligent in looking to the underlying documentation" for debts being pursued by collectors.(1)

Source: Boom in Debt Buying Fuels Another Boom—in Lawsuits.

(1) Presumably, the Federal law violated here was the Fair Debt Collection Practices Act. I'm surprised there isn't a flood of class action 'sightings' alleging 'Fair Debt' violations involving robosigned affidavits in the context of mortgage foreclosure actions.