Jenny Vo of South Philadelphia ekes by as a manicurist and single mother raising two sons. So when a debt collector told her in February 2008 she owed $14,237.38 on her credit card, she was stunned.

She knew she had charged purchases of food, clothing, and household supplies, and she knew she was behind in payments. But Vo, 37, thought she owed just a "couple of thousand dollars" on the card.

So she got a lawyer to challenge Unifund CCR Partners' claim in Philadelphia's Court of Common Pleas - and the company could not provide credit card bills itemizing her purchases. The most it was able to document was $5,738.33.

Frustrated with a lack of evidence presented by Unifund, Judge Idee Fox dismissed the case Feb. 17, which stripped Unifund of the right to demand payment from Vo.

Vo's case reflects a problem in the credit card industry as defaults rise during hard economic times. The increasing complexity of lending in recent years has made it more difficult for creditors to document what they say they are owed.

But Vo's remedy - taking the collection agency to court - is not available in most of the rest of the country, where credit card disputes are decided through arbitration. And last month, the nation's biggest dispute arbitrator, the National Arbitration Forum, agreed to withdraw from that line of work amid allegations about its financial ties to the collection industry. A second arbitrator, the American Arbitration Association, followed suit.

Now regulators around the country are scrambling to consider alternatives, such as the courts.

Even in Pennsylvania, whose rules since 2006 put most credit card disputes in the state's courts, collectors lack documentation.

Why? Since the 1970s, credit card accounts have increasingly changed hands - much as home mortgages are typically sold by the lender to other financial firms. Vo's collector, Unifund, said it had bought her account from Citibank, which had issued Vo an AT&T Universal Card.

Citigroup Inc. and Unifund did not respond to requests for comment. Philadelphia lawyer Frederic Weinberg, representing Unifund, said he had provided 34 pages of documents. But Judge Fox ruled that Unifund failed to establish the chain of ownership, as well as the amount owed.

If Vo had not asked for proof, Unifund might have automatically won the right to take a lien against her house.

That happens. For example, borrowers never came to court in more than one-third of the 7,914 collection cases in the Municipal Court of Philadelphia in the first six months of this year. The result is that those collectors automatically won their cases.

Mitchell Sommers, a consumer lawyer in Ephrata, said many cardholders think they cannot afford lawyers.

But when borrowers do get legal help, the collectors typically withdraw cases, said Vo's attorney, Peter Schneider of Community Legal Services, adding, "They don't have the proof."

Addressing this issue, the Municipal Court of Philadelphia in late February tightened the procedure for filing credit cards claims against consumers. For example, a collection firm can no longer win its claim just because a cardholder fails to show up for a hearing. It still must have adequate proof to support its claim.

And in Western Pennsylvania, Blair County formed a Credit Card Court in January that encourages conferences before trial, similar to Philadelphia's mortgage-foreclosure program, created last year during the housing crisis. In the seven months since then, 75 percent of the cases in which the borrowers showed up have been resolved in conference.

Vo is thankful she challenged Unifund. "They called me every day until I found Peter," she said. "Then they stopped."

A Growing Problem

As the recession drags on and the job market worsens, Americans are piling on more credit card debt and defaulting on more of it. Figures are for the first three months of each year.

Nationwide

2008 credit card debt in default*: 2.63 percent of balances that totaled $31.4 billion

2009 card debt in default: 3.06 percent on balances of $44.6 billion

Pennsylvania

2008 card debt in default: 2.33 percent of balances that totaled $1.17 billion

2009 card debt in default: 2.46 percent on balances of $1.45 billion

New Jersey

2008 card debt in default: 2.09 percent of balances that totaled $926 million

2009 card debt in default: 2.49 percent of balances that totaled $1.37 billion

*Payments past 90 days due.

SOURCE: Experian-Oliver Wyman Market Intelligence Reports

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Contact staff writer Sonja Ryst at 215-854-2614 or sryst@phillynews.com.