The debate over “rubber-stamping” and “robo-signing” documents to prove the validity of debts has been prominent in the debt collection industry for the past several years.

The California Attorney General’s Office recently announced that they filed an action against JPMorgan Chase alleging that the bank engaged in fraudulent and unlawful collection practices by “robo-singing” litigation filings, e.g., sworn documents, declarations, and verified complaints, without reviewing and confirming the information was accurate before signing.

Debt collectors should know what standard courts are following to determine what constitutes an improper or fraudulent legal document.  A good example is the recent ruling in the Suzanne Hill v. Midland Funding case.

In Hill, a federal district court in Maryland dismissed a potential class action lawsuit where the plaintiffs specifically alleged that the affidavits were “artfully and deceptively worded to falsely appear to be made upon personal knowledge.” 

The Hill Court ruled that the affidavits did not contain “false” statements, even though the affidavits were insufficient to allow a judgment in the debt buyer’s favor. The Court specifically noted that submitting affidavits that state courts rule are insufficient to obtain a default judgment against a debtor is not always “a  misrepresentation or other falsehood” that violates the FDCPA.

Lesson learned:  only sign affidavits where you have the necessary knowledge about the subject. 

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