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pluckdogg
Joined: 19 Dec 2009
pluckdogg's page
Posts: 5
112 Magic Points
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Subject: Trying Debt Validation And Need Some Advice
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Sat Dec 19, 2009 4:08 am
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Hey guys.
I owe American Express money but the account went into collections over the summer. Now a law firm is trying to get me to pay... I sent them a validation request and they responded with a summons yesterday along with exhibit A: the terms of the card agreement (my signature or name not on it) and B: a copy of the latest card statement with my name and address and balance, and an "affidavit in support of sworn account" that's notarized stating that all "facts stated herein are true and correct." by an affiant "attorney in fact".
This debt had previously been referred to GC Services out of St Louis but apparently had given up.
The summons names me the defendant (obviously )and American Express as the plaintiff.
Also, I called Amex earlier and a rep told me that they had no information on my account since it had went into collections.
My questions are: has this debt been sold or assigned to this law firm, Slovin and Associates of Cincinnati ( I live in Ohio)?
Is what they provided me enough to validate the debt or are they just trying to intimidate me with insufficient and professional looking documents?
I know I owe Amex the money but shouldn't i deny the summons points? (which is what I'm wanting to do, hoping they back off for a while and I can save up enough money to settle the debt later on)
Will they own me in court or should I go with my instinct and try and fight it?
Thanks for any responses. |
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Justin
Joined: 17 Jul 2006
Justin's page
Posts: 1240
28942 Magic Points
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Sat Dec 19, 2009 6:15 am
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Hi Pluckdogg,
The first thing you need to do is reply to the summons and state that you are not accepting the charges. The card agreement they sent, does not have your signature on it right, so then it might be fake. They should also provide documents to prove that they own the right to collect on the debt.
Normally, when a collection agency tries to collect the debt, it implies that the creditor has sold it to the agency. However, the agency needs to provide documents in support of this. If they take you to court, do appear in court and place your case to the judge so that they cannot get a default judgment against you.
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All the Best 
Justin |
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fireyone
Joined: 26 Feb 2008
fireyone's page
Posts: 4285
127 Magic Points
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Sat Dec 19, 2009 2:27 pm
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Hi, Pluckdogg, Justin is correct. Usually if a debt collector is collecting on an old credit card debt then the original creditor has insdeed sold it. I have seen companies hire out collection agencies also but if you call American Express and they do not have any information then I would definaltely say the debt was sold.
You do want to fight this because of one of the things that happens when debts get sold is sometimes the right paperwork does not go along with the debt. This of course means they would not have the proof that they need to make you pay. Answer the summons and show up in court. |
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pluckdogg
Joined: 19 Dec 2009
pluckdogg's page
Posts: 5
112 Magic Points
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Sat Dec 19, 2009 9:44 pm
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Thanks for the responses!
Ok that's what I was hoping but when you're new to this sort of thing it can be a little nerve racking. I'm going to deny the charges; a default judgement is not an option. (A friend of mine never answered hers and needless to say, her wages just finished getting garnished).
It seems to me, after reading some experiences, that these CAs try and prey on debtors ignorant of their rights (like my friend.) After paying pennies on the dollar for these bad debts, a lot of debtors succumb to them and the CA makes a profit. I've read that other people had denied the charges and are still waiting on a court date. But I haven't seen any follow up stories and I wonder if the CA gives up or continues sending threats or shows up in court most of the time.
The balance on this card is $2505 and the law office is at least a three hour drive away from my home. Any idea what the step(s) after denying the summons will likely be? |
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AnyaRostov
Joined: 09 Jan 2010
AnyaRostov's page
Posts: 13
270 Magic Points
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Subject: Validation of debt
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Sat Jan 09, 2010 3:43 am
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The court's say a validation or verification of debt is...
Verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt. Consistent with the legislative history, verification is only intended to "eliminate the ... problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid." There is no concomitant obligation to forward copies of bills or other detailed evidence of the debt. Chaudhry v. Gallerizzo, United States Court of Appeals Fourth Circuit, 174 F. 3rd 394, 406. |
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carol
Joined: 27 Jun 2006
carol's page
Posts: 1307
Location: Los Angeles, California
29555 Magic Points
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Sat Jan 09, 2010 12:23 pm
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Hi pluckdogg
| Quote: |
| Any idea what the step(s) after denying the summons will likely be? |
You mean you will deny the debt right? Well, once you deny the debt, the court will give you a chance to defend yourself. You need to have proper documentation that would prove why you are denying the debt. However, if there is not enough proof and you cannot adequately defend yourself in court, the plaintiff will likely get a default judgment against you. Your wage can get garnished and you will have to pay up the debt to the amount owed.
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Keep in touch
Carol |
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Sat Jan 09, 2010 9:17 pm
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| A default judgment can only be obtained if you do not file an Answer to the complaint. |
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pluckdogg
Joined: 19 Dec 2009
pluckdogg's page
Posts: 5
112 Magic Points
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Sat Jan 09, 2010 9:24 pm
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Am I misunderstanding this whole thing or what? My point in denying the claims on the summons is to make the debt collector which isn't the OC in proving that I owe them the balance. I've read that they are supposed to validate the debt with certain documents, including a paper with my signature.
After I received the summons, i got a letter from the law firm responding to my request for validation. All they gave me was another copy of the statement that was in the summons, and a letter with a new balance to which they added $81 to the original.
My questions:
Is that debt validated?
If not, isn't it illegal for them to sue without first validating a debt?
Do they have the legal right to add anything to the balance, being a third party collector?
Aren't they also supposed to report the my request for DV to the Credit Reporting Agencies and if not, isn't that too against the FDCPA? (I checked a report a few days ago and there nothing on there about it)
All I want to do is settle a debt and want to buy time to negotiate but I'm not rolling over because they sent me a summons. And I'm definitely fighting because they can garnish my wages in Ohio and that is unacceptable to me.
Was also doing some research about their affidavit in support of sworn account... should i submit an affidavit of sworn, graduate denial or file a motion to strike it as hearsay? And how would i do that?
When I call AMEX (the OC) they consistently tell me that United Recovery systems owns the account and that the law firm is representing them, not AMEX, yet the law firm lists AMEX as the plaintiff... Technically, then I don't owe AMEX, I owe the CA, and since I do owe the CA, they should be the plaintiff, and they need proof that they are allowed to collect the debt, but they haven't provided it yet. So I feel that denying the debt wasn't the wrong thing to do.
I'm brand new to the whole fighting collection agencies war and still not clear on the whole picture. I've read statistics that 90% of CA's summonses (or collection attempts or something like that) go into default judgement and I'm hoping that if I show that i'm willing to not just roll over that they will not show up in court and would rather deal. I've been saving money up to do so and that's where my thought process is right now. |
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AnyaRostov
Joined: 09 Jan 2010
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Posts: 13
270 Magic Points
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Mon Jan 11, 2010 10:48 pm
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Is that debt validated?
**Yes.
Do they have the legal right to add anything to the balance, being a third party collector?
**Absolutely yes. They can add interest, late fees, attorney fees and all the costs of collection and/or a lawsuit.
Aren't they also supposed to report the my request for DV to the Credit Reporting Agencies and if not, isn't that too against the FDCPA?
**No, they do not have to report that you requested a validation. If they provide the validation, which they have, and you follow it up with another dispute, per the FCRA, the collector should report the account as 'disputed by consumer', however, that could take months to happen.
All I want to do is settle a debt and want to buy time to negotiate but I'm not rolling over because they sent me a summons.
** A settlement would be in your best interest. The chances of winning a debt collection case is next to 0. Judges rubber stamp those things. I work in all 50 states as a paralegal (I AM NOT AN ATTORNEY) and see this every day.
Was also doing some research about their affidavit in support of sworn account... should i submit an affidavit of sworn, graduate denial or file a motion to strike it as hearsay?
** Templates for Motions can be found all over the Internet. One case which comes to mind was in the news recently where the affidavits from a collector were "signed" by the mother of an employee of the company and the mother had been dead for 14 years. These things are forged all the time BUT you have to get very detailed to prove this... with Interrogatories, Requests for Admissions, Depositions before a court reporter, etc. Those things get very expensive.
When I call AMEX (the OC) they consistently tell me that United Recovery systems owns the account and that the law firm is representing them, not AMEX, yet the law firm lists AMEX as the plaintiff...
** I would fax AmEx this request or snail mail them or something to try to get IN WRITING that AmEx does not own the account. I wouldn't just ask them to give it to you in writing because what will happen is you will get referred to a supervisor who will then tell you that the other representative was incorrect, AmEx does own the account.
90% of CA's summonses (or collection attempts or something like that) go into default judgement.
**Absolutely correct. Most people who get a summons panic and don't respond. The collector then gets a default, garnishes wages, seizes bank accounts, income tax refunds, etc.
I hope that helps some. |
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pluckdogg
Joined: 19 Dec 2009
pluckdogg's page
Posts: 5
112 Magic Points
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Mon Jan 18, 2010 3:41 pm
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| So while we are awaiting a court date... what's the best way to go about offering a settlement in everyone's opinion? |
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Subject: Chaudhry v Gallerizzo not as clear cut
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Mon Jan 25, 2010 7:59 am
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Chaudhry v. Gallerizzo
This case was not about the original debt but additional charges for legal fees which had not even yet been performed. Another issue was attorney-client privilege related to the legal fee agreement. It has no bearing in for example credit card cases with very different fact issues. It is only a precedent in the 4th district - outside of the 4th it is only a persuasive argument but is not a legal precedent.
A current case would also have to share the same fact issues as Chaudhry which was not about a credit card but a construction loan.
Then we have Spears v. Brennan, 745 N.E.2d 862, 878-79 (Ind. App. 2001) which directly contradicts the Chaudhry case and is more recent. In the Spears case there was a loan agreement but only showed the original amount and interest. There as no accounting for payments made , the dates payments were made, the interest that had accrued or any late fees assessed. The Court ruled this was not valid debt verification.
Further we have the Federal Trade Commission, the Federal agency charged with interpreting the FDCPA which has issued opinion letters that while not authoritarian over Court decisions indicate more thorough documentation is required. The FTC Wohlman letter says that validation must be obtained from the original creditor not a collection agency.
On a side note the commonly used "Affidavit of Debt" by an agent of the creditor is hearsay and has no value. I recently had my motion to strike an affiant's statement granted in a Arizona Justice Court. If the affidavits claims that affiant has personal knowledge of records establishing debt it may be a violation of FDCPA as a false statement.
In Clark v. Capital Credit & Collection Servs., Inc.,460 F.3d 1162 (9th Cir. 2006) the Court adopted a lower, "reasonable" standard more in line with the Chaudhry case.
But the facts are very different from the typical credit card case. A consumer disputed a medical bill. The collection attorney, hired by the doctor, collected eight pages of itemized charges that included the nature of the charges and balance of the bill. The 9th Circuit of Appeals agreed and stated: “verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt.” But note for a credit card validation, it is generally held that a proper validation should explain how an account balance got from zero to the amount that is being claimed including all debits, credits, and fees explained.
Further are issues related to the sale of the debt from the creditor to a collection agency. This is controlled by Article 9 of the Uniform Commercial Code related to sales of accounts receivable. It provides that any debt buyer is not entitled to payment by debtor unless it provides a copy of the assignment of debt from the original creditor. The old UCC article 9 referred to as AS 45.09 originally was for secured transactions but was expanded 7/1/2001 as 45.29 which includes Intangible Property Rights, payment rights, and rights to payments arising from credit or charge cards. More details by a law firm are at http://www.lbblawyers.com/article9ppt_files/v3_document.htm as well revised Article 9 itself at http://www.law.cornell.edu/ucc/9/article9.htm
There is also an interesting case regarding FDCPA violations by the 9th Circuit Appeals Court where the debt collector in error tacked on "attorney fees" of $250 for a bill from an old apartment complex.
The Ninth Circuit upheld summary judgment for a debtor against a debt collection agency where the agency had purported to verify to the debtor that he owed, in addition to an amount due under a residential lease, a $225 fee for the landlord’s cost of having a lawyer write a demand letter. But the lease allowed recovery of such a fee only if the landlord sued.
The debt collector invoked the bona fide error defense under section 1692k(c) of the FDCPA. It asserted, in a declaration, that the landlord had always given it accurate information in the past and that it therefore reasonably relied on the false information about the landlord’s entitlement to tack on the fee.
The Ninth Circuit rejected the defense. It noted that the statute requires proof that “the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” Reliance on a creditor to get the numbers right doesn't raise a fact issue that the agency maintained “procedures reasonably adapted to avoid” a mistake in the creditor’s representations. “The procedures themselves must be explained, along with the manner in which they were adapted to avoid the error.” Reichert v. Nat’l Credit Systems, Inc., No. 06-15503, slip op. at 8 (9th Cir. July 7, 2008).
Note: I am not an attorney or giving legal advice. The above is based on my personal research acting pro se in my own case which I am sharing to perhaps help others. I recommend folks seek competent legal advice. |
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