SAN FRANCISCO — Personal bankruptcy fraud costs the bank credit card industry $600 million a year and hurts all cardholders, Visa U.S.A.'s president said Wednesday as he announced a nationwide crackdown on phony filers.
Jon Cristoffersen said the program, already under way in Los Angeles, Dallas, Houston and Chicago, will reach most major bankruptcy areas by year-end.
"Bankruptcy can be an appropriate way for honest people to deal with a financial problem," he said. "But our concern is with the fraudulent filing, which can be as many as one in three."
Personal bankruptcy filings have doubled since 1980 to about 600,000 last year, or one in 178 households. Cristoffersen said that socked the bank card industry with total losses from bankruptcies of $1.5 billion in 1988 as bankrupt cardholders simply wrote off their unsecured credit card debt.