Capital One has been caught by the U.S. Trustee’s office in Massachusetts.  They have been caught filing Proofs of Claim (i.e., a request for payment stating that they have a valid claim against the Debtor and are entitled to be paid) in Chapter 13 cases requesting payment for debts that had already been discharged in a preceding Chapter 7 case.

Sorry, but that pretty much qualifies as lying, cheating and stealing.  Furthermore, filing a false claim is punishable by a fine of up to $50,000 and some serious jail time.

So, what punishment has the U.S. Trustee suggested for Cap One?

They have to give the money back.  Yep, they filed false claims — thousands of them — and they have to give back the money they were paid on those claims.   Oh, and they have to hire an independent auditor to make sure that they do.

This is set out in a proposed settlement agreement, which is announced on the U.S. Trustee’s web page if anyone wants to read it.  The settlement has not yet been approved by the Court — and I hope that it won’t be.  It certainly does nothing to dissuade this kind of conduct in the future.  Nor does it do much to change the U.S. Trustee’s Office’s reputation for being a bit pro-creditor.

I think I need to get more aggressive about pursuing discharge violations.

Elaine