Okay folks...this could get interesting...!!

[RebelLady]

Okay...here's a brief history...last year, a JDB (well known) filed a claim with NAF concerning an alleged cc debt. I DV'd them and the NAF stayed the claim as it was now in discovery. The JDB sent me quite an impressive packet of information (including a copy of the last statement from 12/05 which fell way short of bringing this alleged account current. The account was written off in 01/06 and sold several months later). As you all know...NAF went belly up not too long after this claim was filed. I recently got a dismissal without prejudice from the JDB and from the NAF.

TODAY...I received a dunning letter from another JDB about this same debt and claiming to be the assignee of the OC.

Fortunately, JDB1 provided me with a cardmember's agreement for 2005 (the one they were trying to enforce) which clearly states that disputes MUST be resolved through abitration through the NAF and (in all caps) CANNOT BE LITIGATED IN A COURT. The state whose law governs this alleged cc has a SOL of three years, therefore, the DOLA was 12/05 which means that in 12/08 the SOL ran out. So here are some of my questions...at least for now...lol:

1. Can JDB2 be the assignee of the OC since they are the second JDB who has attempted to collect on it? Wouldn't they be the assignee of JDB1 rather than the OC? And isn't this a misrepresentation of the amount, status or character of this alleged debt?

2. JDB1, when they filed their claim with the NAF, chose the state in which the interest rate would be highest but the state which has the shortest SOL (3 years rather than 6 years). Can't I now claim the same thing...that the laws of the state with the shortest SOL are the governing laws that preside over this alleged cc?

3. Should JDB2 (and they more than likely will) file suit...won't they be in breach of agreement since the agreement clearly and in all caps states: "THE RESULT OF THIS ARBITRATION SECTION IS THAT EXCEPT AS PROVIDED ABOVE, CLAIMS CANNOT BE LITIGATED IN COURT, INCLUDING SOME CLAIMS THAT COULD HAVE BEEN TRIED BEFORE A JURY, AS CLASS ACTIONS OR AS PRIVATE ATTORNEY GENERAL ACTIONS." (The exception was if a third party files a claim and 'we', the cc company and I, somehow became co-defendants against 'them', this third party.)

4. Would this be considered part of the agreement NAF made to not accept any more consumer cc complaints? The dismissal was without prejudice meaning that the current JDB could pursue it later but wouldn't it become a 'new' claim since this is the second JDB to own it?

I am certain that JDB2 is just waiting for me to DV them so they can turn around and send me this really impressive packet of information JDB1 sent me earlier this year and I'm sure, included in the information they sold to JDB2. So...should I DV them or just FOAD them? Am I mistaken or has JDB2 simply bought an uncollectable debt?

Thanks for all your help,

RL

Edited August 14, 2010 by RebelLady

[jackson212]

i dont know what state you are in, but i hope to see you follow this through. im rootin for you, consider this a bump

[RebelLady]

Thanks jackson212...

I am still in the process of considering how to proceed with this...to DV or simply let them file suit (and I'm sure they will). And if I DV them...should I tell them about the information I already have on hand or just make it a simple "I dispute this debt and please provide the name and address of the original creditor" - type DV letter. This alleged debt was OOS before JDB1 filed their claim with NAF (if the governing law state prevails). The verification they provided me confirms it!

Just not sure how to proceed at this point...hmmmm. Suggestions are appreciated!

RL

[KentWA]

I would DV, I walways DV as soon as I get the letter. If they proceed to court with out validating they have yet another violation.

I like to make it messy for them and if I was goiing to sue or if I was counterclaiming I would drag JDB1 into the mess as well with "Based on information and belief JDB1 did not communicate the disputed status of the debt to JDB2".

[RebelLady]

I agree KentWa...I am sending them my DV letter this week. In it, I am advising them strongly to pay very, very close attention to the card member agreement and its arbitration procedures. There's no wiggle room there...none of this "Us or you can elect..." It says straight up and in no uncertain terms..."disputes shall be resolved through binding arbitration" and that this binding arbitration shall be conducted by the (guess who??) National Arbitration Forum!! Wow...seems like this alleged account has been there once before...lol. I guess when JDB1 was making its sales pitch to JDB2, they forgot to mention that minor little inconvenience.

The card member agreement also clearly and in all caps states that claims "CANNOT BE LITIGATED IN COURT". (Um...don't I remember something from my US Government class about a constitutional right to 'due process' and 'trial by jury'?). Talk about getting messy...I can't wait for the summons!!!

RL

[rikkivs]

Rebel Lady, I cannot think of the cases at hand, but I have seen debt collection cases where the judge struck down the legally unenforceable aspects of a contract but upheld the other legal aspects of the contract.

For example, if you borrowed $1000 from Jane and promised to pay her back, you guys have a simple contract. Now, Jane can add a provision to your simple contract that any and every dispute on the account must be settled via binding arbitration in a specific forum and she can say that both parties waive their right to litigation. However, Janes' insertions to the contract are problematic in a couple of ways, first the waiver of right to litigate is unconstitutional and secondly you know how the courts have ruled about binding arbitration via the NAF.

Suppose you default on your loan with Jane, now you owe her some money! If the arbitration forum specified by your contract is defunct and it was the only venue specified by the contract, then in the interest of justice, the judge can strike the binding arbitration clause and waiver of the right to litigate and all of that, but you still owe Jane $1000. The judge will likely allow the suit to continue, striking parts of the contract that are legally unenforceable but still holding you accountable for the money you borrowed from Jane. A suit could continue under a theory like unjust enrichment, and very little is needed to prove those types of cases.

I cannot speak about the assignment from all the JDB's but if you really owe money to the original creditor, why not contact them directly and work out a settlement (and try to negotiate a settlement close to the amount you charged, excluding late fees etc)? Since they've written off and sold the debt, they will have no interest in it and this will be all profit for them. Also, if the suit continues in a court of law best believe that they will have very little evidence since its gone through a few hands by now;)

If you are able to work something out with the original creditor, then all the crap on your credit report will similarly go away because you've NEVER had prior course of dealing with these jdbs!

[RebelLady]

If the arbitration forum specified by your contract is defunct and it was the only venue specified by the contract, then in the interest of justice, the judge can strike the binding arbitration clause and waiver of the right to litigate and all of that, but you still owe Jane $1000.

rikkivs,

Thanks for the heads up! I can see where in the interest of justice and in all fairness a judge would feel compelled to do that.

This agreement also indicates that in the event NAF is unable or unwilling to act as arbitrator, another independent arbitration organization can be chosen. I would assume the 'unable' part would apply and, therefore, come into play. The OC or JDB would still be able to submit any disputes for arbitration which would uphold the agreement without violating any rights. Sorry if my original post indicated that there was only one option available.

So, in all fairness and in the interest of justice, would the judge be able to 'uphold in part' and 'strike in part'?

I guess what it amounts to is that OC's, CA's and JDB's have used the arb clause for years to rip people off but now that it has become 'inconvenient' for them, they want to have it overturned and striken so we can all get back to business as usual.

RL

Edited August 17, 2010 by RebelLady

[rikkivs]

I wish Trueq was still on this board but as I understand it, he's part of a group on yahoo finance or something. If anyone else knows where he is, please feel free to say something!

Tq knew lots about arbitration and how the NAF debacle could be used as a benefit to consumers for a certain period of time. Since I am not comfortably familiar with arbitration via JAMS or AAA, I cannot tell you much about them!

But, I do know that arbitration fees can be large and that the burden of proof is not as stringent in arbitration proceedings, which is why the NAF used to be so biased towards creditors. If you are really interested in arbitration, consider examining the clause to see who must initiate and who must PAY the fees! As I understand it, this has been a source of contention between consumers and creditors in the past!

Like I asked before, if you think you owe the money why not work something out with the original creditor? That way you circumvent the JDB's and you might be able to sue them!

Here's an example. A few years ago, my husband got laid off and times was even rougher then than they are now! We fell behind on our TMobile bill and our phones were disconnected. We owed them a little less than $400. Within a couple of months, we got tons of dunning letters in the mail from these collection agencies. Then the legal threats started coming because somewhere along the way, I believe the debt was sold to a JDB. $400 is a lot when you are broke and have cashed out retirement to pay the mortgage...after about a year, my husbands' credit report was shot to hell by these collection agencies and JDBs inflating the amount of the debt by charging interest and other nonsensical 'fees'.

I called up TMobile and asked them if I could pay them because we had no moral obligation to the collection agencies or JDB, but we did have an obligation with TMobile. The agent was very nice and almost surprised with my attitude and accepted payment. He also said they were generating a letter for the collection agencies and the JDB to cease communication with us.

What I'm getting at is from an ethical standpoint, you really don't owe jdb's ANYTHING! You never incurred a debt with them and they really would be unjustly enriched if you paid them a dime! I also feel as though if the amount creditors claim you owe is mostly consistent of fees, and you've paid your bill over time, equal to the amount you actually charged on the bill, then they can be unjustly enriched at your expense. This is why I like Amex Green cards because they don't try to get you for more than what you've spent!

OK I am ranting now, but best wishes with this and keep us posted. Don't give those JDB jerks a dime!

[KentWA]

I do not know all the case law, but from what I remember clearly the judge would be barred from striking the arbitration provision by the FAA. The fact that none of the arbitration forums THEY selected will take their claim has no bearing in the matter. Question about the arbitration provision, does it have a provision for them to pay the fees? If it does you could burn up a lot of time and their money submitting to NAF, AAA and finally JAMS with a counter claim.

[nobk4me]

For your information, Trueq is on debtorboards.com.