Bank of America has sold
collections agencies rights to sue over credit card debts that it has privately
noted were potentially inaccurate or already repaid.
In a series of 2009 and 2010
transactions, Bank of America sold credit card receivables to an outfit called
CACH LLC, based in Denver. Co. Each month CACH bought debts with a
face value of as much as $65 million for 1.8 cents on the dollar. At
least a portion of the debts were legacy accounts acquired from MBNA, which
Bank of America purchased in 2006.
The pricing reflected the accounts’
questionable quality, but what is notable is that the bank could get anything
at all for them. B of A was not making “any representations, warranties,
promises, covenants, agreements, or guaranties of any kind or character
whatsoever” about the accuracy or completeness of the debts’ records, according
to a 2010 credit card sales agreement submitted to a California state court in
a civil suit involving debt that B of A had sold to CACH.
In the “as is” documents Bank of
America has drawn up for such sales, it warned that it would initially provide
no records to support the amounts it said are owed and might be unable to
produce them. It also stated that some of the claims it sold might already have
been extinguished in bankruptcy court. B of A has additionally cautioned that it
might be selling loans whose balances are “approximate” or that consumers have
already paid back in full. Maryland resident Karen Stevens was the victim of
one such sale, which resulted in a three-year legal battle.
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