Debt Industry Could Be 'robo-signing'

New reports suggest the recent robo-signing scare within the mortgage industry may also be plaguing the consumer debt business.

Some debt buyers, who collected money on delinquent credit card accounts, loans and bills, used error-filled information when processing cases. In some instances, workers were required to read and sign more than 2,000 affidavits verifying consumer information daily, according to some estimates.

"At least when it comes to mortgages, the banks have the right address, everyone agrees about the interest rate," Richard Rubin, a consumer lawyer, told the Times. "But with debt buyers, the debt has been passed through so many hands, often over so many years, that a lot of time, these companies are pursuing the wrong person, or the charges have no lawful basis.”

Troubled consumers who find themselves the victim of the infraction could pursue legal action. This does not mean that past-due credit card or electric bills will disappear, The New York Times reports. However, some lawyers have reported a high winning percentage in such cases.

Minnesota Senator Al Franken has introduced a bill to offer increased consumer protection from debt collectors. The bill would also call for a enhanced verification methods and increased transparency.