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American Banker Editor-in-Chief Neil Weinberg on concerns over the methods banks use to collect debt.
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-- federal officials are in the early stages of probing some of the nation's biggest banks.
Over their debt collection practices.
Instead of third party debt collectors -- recent American banker article sheds light on the questionable practices of the banks themselves.
Joining me now with the exclusive story Neil Weinberg editor in chief of American banker.
-- welcome back to show the bank in her village so tell -- what's going on here.
Well basically what we're talking about here is a lot of consumer credit card debt and what happens is when people don't pay this debt it gets delinquent and then the bank's.
We'll try to collective -- either try to collected internally -- their own attorneys or they'll sell it and the question is do they really have the documents to prove that people -- this debt.
And we've been doing some investigations to raise some questions there.
-- does some good work on this -- this reminds me of what happened in the mortgage market the banks didn't really have the goods they didn't know who you were how much the house was worth there when you've stopped paying.
They're.
It also raises questions are about due process.
-- -- laid -- you know I know a lot of our viewers out there they think that.
If you owe them money it doesn't matter if the bank actually has the details are not.
But I think if you're coming after me -- I ought to be able to prove your case I think a lot of -- that people out there don't really understand is when it comes to this kind of debt.
It's bought and sold like a commodity.
Some of these companies -- collect this debt.
They're like they like car salesman.
Absolutely and what we found was that actually in many cases the banks do not have the original documentation or that their computers will spit out different balances for how much is really -- -- they don't provide much of that if any to the debt collectors beyond the names and just a number.
And so the question is are these numbers accurate and is there any proof we found a woman who got a letter from Bank of America.
It said thank you for paying off your debt and for three years she was chased by debt collectors and lawyers now from what I understand -- -- some.
Courts out there Bankruptcy Courts and others that are just -- mills for this kind of thing.
Well the interesting thing is and they're sort of a crack your between the regulators and the states -- it typically these.
These -- cases go to state courts and judges are all over the map in what they require but generally.
They're not too strict about the documentation they believe the banks and their lawyers when -- come -- they say Gerri owes 5000 dollars.
They don't ask.
Where's that original document where's the proof where's the contract they just -- this paper for a they do and -- -- in many cases of people go to court with their lawyer.
The -- its withdrawn because so few are actually contested.
That this is a numbers game for the collection -- the reality is people don't even show up at court what has no they don't so that the judge will have a -- you know help put a lien on property or he'll say you -- this much and it's a legal obligation of this court.
And then people.
Just have to pay it off even though they didn't show while great investigation -- great market American banker on the story wanna hear what happened so you'll have to update -- Thank you thank you very much still the.
