Bank of America / FIA Card Services Found to Engage in “Unsound , Unsafe, and Illegal” Debt Collection Practices

On May 29, 2015 Bank of America and its affiliate FIA Card Services, were fined $30 million by the Department of the Treasury through the Office of the Comptroller of the Currency (“OCC”) for engaging in “unsound, unsafe” and illegal behavior in connection with its collections litigation process.

As someone who litigates FIA Card Services/Bank of America cases on an almost daily basis this came as no surprise.  The OCC found that FIA Card Services:

• Filed (or caused to be filed) affidavits in their debt collection cases that claimed to have been made on personal knowledge and having personally reviewed the underlying documents when in fact many cases no such personal knowledge existed and the relevant documents hadn’t been reviewed.
• Filed (or caused to be filed) affidavits with courts that weren’t properly notarized.
• Failed to oversee the outside attorneys they hired to handle their debt collection lawsuits.
• Engaged in violations of the Servicemembers Civil Relief Act

Unless you deal with this stuff all the time this likely sounds like a bunch of legal mumbo-jumbo, but when you actually see what FIA Card Services was doing it is pretty shocking.

The FIA Card Services / Bank of America Debt Collection Process

If you had a credit card with Bank of America it was actually handled by a sister company known as FIA Card Services.  Once the account went unpaid for a period of time FIA Card Services likely charged it off and then packaged it with a bunch of other delinquent accounts and sold it to a junk debt buyer like Midland Funding or Cavalry SPV.

The junk debt buyer then files a debt collection lawsuit alleging that it is now the owner of the debt and that you must pay them the full amount.  The problem is the junk debt buyer paid very little for the account that it is now suing you on and got very little in return.  Often the only evidence that your account was transferred from FIA Card Services to the junk debt buyer is a spread sheet with a bunch of names and contact information – hardly the type of evidence that will stand up in court.

The Missing Link – The FIA Card Service Affidavit

When you get sued by a junk debt buyer like Midland Funding you find yourself in the odd situation of being sued by a company that you never have had any dealings with or entered into any contracts with.  Because of this the junk debt buyer is required to prove its “standing” – or ownership of the account.

As I mentioned, the junk debt buyer will have little evidence that the account was transferred so they rely heavily on affidavits (sworn written statements) from banks like FIA Card Services, Bank of America, and other junk debt buyers, that, not surprisingly, attest that your specific account was part of the transfer from FIA Card Services to the current junk debt buyer.

These affidavits are signed under penalty of perjury and swear that they are based upon the “personal knowledge” and that the person signing it has reviewed all of the relevant documents so as to verify that your account was transferred.

The problem is, as found by the OCC, that in many cases the person signing the affidavit was completely misrepresenting the truth – and in fact had no personal knowledge about the account and hadn’t reviewed the documentation as they said they had.

In short, they were lying.

And too often they were getting away with it. My hope is that with the entry of the Consent Order entered into between the OCC and FIA Card Services that not only will the banks wise up and actually do what they say they are doing, but that consumers will be able to take copies of these Consent Orders to court and show the judge that these “pillars of the community” have actually been perpetrating a fraud on the courts for years.

If you are fighting a junk debt buyer where the original creditor was Bank of America or FIA Card Services take the time to read over the Consent Order and present the information to your judge.

You can get a copy of the Consent Order against FIA Card Services by clicking HERE.

You can get a copy of the Consent Order regarding the $30 million fine by clicking HERE.