I've been working with someone who was going to pay off his equity loan originated by Associates, now Citi Financial, but the balance didn't look right to him.
I'm aware of class actions against Citi over Associates lending regulation violations and an FTC settlement. However, I didn't see anything about ACCOUNTING fraud.
In 6/01 Citi announced that "Associates Home Equity Services, Inc has changed its name to CitiFinancial Mortgage Company, Inc!"
The borrower had ordered accounting from Citi in 1/03, but they didn't cover the first year of the loan in 99, but started the accounting in 10/00.
That sure makes me think that they were quite aware of accounting problems and they deliberately omitted the first year.
He finally received full accounting last week and noticed that a $1,386 extra payment in the first month of the loan in 10/99 was credited on the 11/99 statement, but the principle balance on the NEXT statement in 12/99 entirely ignored that payment and this payment is also missing from the Citi accounting.
It appears that while Associates received and posted the payment, it was ignored by the accounting software. How can that happen without anyone noticing?
Hopefully a lawsuit will be filed and discovery should reveal whether other borrowers complained about missing credits and whether Associates/Citi know of or should have known about the software problems.
Obviously, all loans should be audited and alerts should be sent to all borrowers.
If you had an Associates loan in 1999 or 2000, please do check your statements for posted extra payments that are not included in the balance calculations.
Where is that money?
I'm CONSTANTLY seeing banks and creditors failing to apply payments they clearly received. Pacific Bell failed to credit my $120 payment, GTE (Verizon) billed me for a $90 check they sent me in error although I didn't cash the check. Compass Bank didn't notice a $500 error, and I see these accounting "irregularties" constantly on readers' and clients' accounts.
Why is the US government condoning this rampant accounting fraud?
Because it only hurts people like you and me and the corporations who defraud us pay for their elections?
Posted by Christine at June 1, 2004 12:35 PM | TrackBack