Weary Traveler

CC Agreements - Can They Change after Closure and/or Default?

Recommended Posts

Okay, I've been digging around on the internet with no luck thus far, so I thought I'd put it to the forum and seek your opinions on this subject.

 

So, for example:

 

A consumer applies for a credit card with Big Bank.   They sign (electronically or otherwise) a credit card agreement with Big Bank.  A few years later, the consumer becomes unemployed and defaults.   The account is closed by the credit grantor and charged off. 

 

After an account has been closed, is the consumer still bound by future changes to the Agreement? Or are they only bound by changes to an agreement through their "continued use" of the credit card after they have been notified in advance of these changes?

Share this post


Link to post
Share on other sites

Okay, I've been digging around on the internet with no luck thus far, so I thought I'd put it to the forum and seek your opinions on this subject.

 

So, for example:

 

A consumer applies for a credit card with Big Bank.   They sign (electronically or otherwise) a credit card agreement with Big Bank.  A few years later, the consumer becomes unemployed and defaults.   The account is closed by the credit grantor and charged off. 

 

After an account has been closed, is the consumer still bound by future changes to the Agreement? Or are they only bound by changes to an agreement through their "continued use" of the credit card after they have been notified in advance of these changes?

In my research on Contract Law with respect to cc big banks are required to send you changes to their cc agreement (closed or otherwise) and I'm assuming the big bank still owns your account because they closed it and have not sold it and even if they did sell it, jdb will state they own it outright.

.including cc agreement.

 

Someone out there correct me if I'm wrong...

Share this post


Link to post
Share on other sites

You accept the new agreement by use of the card. The changes tell you by use of the card you accept our terms. If the account was already charged off, it doesn't apply. If the card was in default, they may try to say you didn't opt out in writing, and will try to argue added interest is activity on the account, but your last payment could argue against that theory.

  • Like 2

Share this post


Link to post
Share on other sites
Guest

I had a large bank try this with me on a closed business card account. What you describe is not legitimate. Its a pathetic attempt by certain financial institutions to magically change the terms on a closed or charged off account, because later they created terms for current customers that are more favorable to them. If the account was closed or charged off, the only contract that applies is the last one in effect while the account was still open, end of story. I'm amazed that banks try to get away with this bs, but try they do.

  • Like 1

Share this post


Link to post
Share on other sites

I think the current terms and conditions for NEW credit cards include words that say, in effect, "...we may change these terms in the future...if you do not accept the changes, you may cancel the account by PAYING IT IN FULL...".

 

You need to read the T&Cs completely.  Its possible you agreed that even if you default, they can still change them.

Share this post


Link to post
Share on other sites

I agree with willingtocope.  The 1st place to look is your old agreement if you haven't already done that.  .

 

Some states, like NJ, have statutes about this.  For some reason, I could not post a link to it.  So just search Google for "New Jersey Statute 17:3B-41."   See if your state has anything.

 

 

 

Share this post


Link to post
Share on other sites

Even if the language in the "contract" states that only PIF can allow you to opt out of a new contract, it would be very difficult to get even a JP in AZ to agree that that language is binding.

 

Contract law is complex, but still based, to a degree, on the principle of equality of the parties. We know that there is no equality; "We can do whatever we want, just cuz" is clearly the statement of a party with all the power. But blatantly stating that changes after the closure of an account are binding on the weaker party is still not acceptable.

 

The challenge, always, is to point that out to the judge in a manner that is compelling.

  • Like 1

Share this post


Link to post
Share on other sites
Guest

Great comment @Wins the Battle.  I've had two instances where I've disputed the terms of a bank contract (or specific terms within a contract), and in both instances the bank tucked their tail between their legs and folded. In one recent instance, it had to do with exactly this topic. I have no doubt if the issue went before a Judge or Jury, I would have prevailed.  

 

This hasn't stopped one large bank from recently trying the same stunt. It's a simple matter, the contract in force when the account was open had an arbitration provision, which they realize I may invoke. The bank is trying to escape this, so they are putting forth a contract with no arbitration provision for one of the credit cards they offer today, a date long after my account was closed. 

 

I imagine somewhere someone put in a contract they were selling ocean front property in Nevada. Just because its printed on paper doesn't make it worth anything.  Actually, I take that back. All of these scenarios make it worth something - monetary penalties paid to the consumer who fights back.

Share this post


Link to post
Share on other sites

For each agreement you contend was

offered to and accepted by the defendant, including but not limited to the original account agreement, any amendment to the agreement, any notice of a change in any term of the agreement, or any schedule of interest rates or fees applicable to the account, explain how the agreement was offered to and accepted by the defendant.

Request for Production

 

For each agreement,

amendment to an agreement, or notice of change to the terms of the account you contend was offered to and

accepted by the defendant, please produce every document that evidences such offer or acceptance.

Delivery of Account Documents

Interrogatory

 

No. 7. Explain how each document containing the terms of any agreement for the account or

reflecting any amount due on the account was delivered to the defendant, including but not limited

to, the original account agreement, any amendment to the agreement, any notice of a change in a term of the agreement, any schedule of interest rates or fees applicable to the account, any credit card issued in connection with the account, and any statement of payments, charges, fees or interest for the account. Include in your explanation the date the document was delivered and a description of the manner in which it was delivered, including, if the document was delivered by the Postal Service or other courier, the location to which it was addressed and whether the document was returned undelivered.

 

Request for Production No. 14. For each document listed below that was delivered to the defendant, please produce

all documents indicating the date the document was delivered and the manner in which it was delivered,

including, if the document was delivered by the Postal Service or other courier, the location to which it was

addressed and whether the document was returned undelivered:

a. The original account a

greement for the account.

b. Any amendment to the agreement for the account.

c. Any notice of a change in any term of the account,

including but not limited to a change in the rate of interest

or amount of any fee applicable to the account.

d. Any schedule of interest rates or fees applicable to the

account.

e. Any credit card issued in connection with the account.

f. Any statement of payments, charges, fees or interest for the account.

Relevance and Authenticity of Generic Account Documents.

 

Interrogatory

No. 11. For each document you have

produced that you contend applies to the account and thatdoes not contain the defendant’s identifying information,

such as the defendant’s name, social security number,account number, or signature, explain how you know

the document applies to the account.

 

Interrogatory No. 12. For each document you have produced that you contend applies to the account that does

not contain the defendant’s identifying information, such as the defendant’s name, social security number, acco

unt number, or signature, and that was created by someone other than you, identify the source of the document by

stating the date you obtained the document and identifying the person from whom you obtained the document

Share this post


Link to post
Share on other sites

This was a great question. I would think the terms in agreements like this would stay if customer defaults then he is bound by the new rules here after or is not . But generally I would assume when you default the contract ends- but it may not really as even though they close the account, you still owe and they can still collect. If it goes to  JDB do the terms transfer?

Share this post


Link to post
Share on other sites

Great comment @Wins the Battle.  I've had two instances where I've disputed the terms of a bank contract (or specific terms within a contract), and in both instances the bank tucked their tail between their legs and folded. In one recent instance, it had to do with exactly this topic. I have no doubt if the issue went before a Judge or Jury, I would have prevailed.  

 

This hasn't stopped one large bank from recently trying the same stunt. It's a simple matter, the contract in force when the account was open had an arbitration provision, which they realize I may invoke. The bank is trying to escape this, so they are putting forth a contract with no arbitration provision for one of the credit cards they offer today, a date long after my account was closed. 

 

I imagine somewhere someone put in a contract they were selling ocean front property in Nevada. Just because its printed on paper doesn't make it worth anything.  Actually, I take that back. All of these scenarios make it worth something - monetary penalties paid to the consumer who fights back.

When you get a credit card, you sign a contract, your signature is binding to the terms of the contract and what is says you signed to. It says you agree to pay.

Share this post


Link to post
Share on other sites

@credit2011

 

You may sign an application, but you don't sign the cardmember agreement which contains the terms and conditions.

Most courts have ruled that a contract can be proven by the actions of the parties.  That's where proof of charges and payments apply.

Share this post


Link to post
Share on other sites

@credit2011

 

You may sign an application, but you don't sign the cardmember agreement which contains the terms and conditions.

Most courts have ruled that a contract can be proven by the actions of the parties.  That's where proof of charges and payments apply.

 

 

@BV80...

Most courts have ruled that a contract can be proven by the actions of the parties.  That's where proof of charges and payments apply.

 

Yep, but not necessarily according to expressed written terms they never ask the card member to sign as being agreed between both parties.If you sign an application, you have agreed to all their terms of agreement as they can be changed from time to time.An oral contract has no express written terms.The only agreement is that you can use their card. That is a contract that can be proven by the actions of the parties. A holder of a negotiable on a charge card says you haven't paid the negotiable they hold. There is no loan, nor debt, as the only agreement was that you use their card.If they sent you a waiver to sign an expressed agreement before they let you use the card, you could be held by the terms of said agreement.

They don't want that . If I want to see the whole agreement , and find they can charge 30% interest for reasons of high debt ceiling or missed ,or late, payment, I'll guarantee I ain't gonna use their card. Nor would anyone else in their right mind.

  A verbal contract does not include account stated. The plaintiff usually tries to incorporate it as a second count in the complaint. The court may decide on the alleged debt ,but not the account stated, if it was indeed a verbal contract.As hearsay rule should be raised by the defendant.

 

 

@ Weary Traveler

 

After an account has been closed, is the consumer still bound by future changes to the Agreement?....It depends on the specific agreement you signed.Were there any disclaimers on the application?

 

Or are they only bound by changes to an agreement through their "continued use" of the credit card after they have been notified in advance of these changes?

 

Again I think It depends on the specific agreement you signed. It may have stated they may reserve the right to change terms if the account is defaulted on.

Share this post


Link to post
Share on other sites

@My~Cuz~n~Vinny~

 

Law does not require a credit card agreement to be signed.  The Truth in Lending Act simply states that a cardmember agreement must contain certain information and be sent to the cardholder.  By attempting to claim that the cardmember agreement has no effect, you're attempting to undo TILA.

In addition, the Statute of Frauds, which requires a signature, does not apply to credit card agreements in Connecticut.  There's no support for your argument that you cannot be bound by an unsigned cardmember agreement.

I'm also thinking you'd have a tough time proving that a credit card account is an oral contract.

  • Like 1

Share this post


Link to post
Share on other sites

@My~Cuz~n~Vinny~

 

Law does not require a credit card agreement to be signed.  The Truth in Lending Act simply states that a cardmember agreement must contain certain information and be sent to the cardholder.  By attempting to claim that the cardmember agreement has no effect, you're attempting to undo TILA.

In addition, the Statute of Frauds, which requires a signature, does not apply to credit card agreements in Connecticut.  There's no support for your argument that you cannot be bound by an unsigned cardmember agreement.

I'm also thinking you'd have a tough time proving that a credit card account is an oral contract.

Yep. I see what your a say~n~..In my own personal experience I argued this at trial and got the account stated thrown out.I was not pleading I never had the account.I only plead that I did not owe it or own the alleged debt.@ trial they tried to introduce a generic agreement from 3 years into the account. I objected and stated I never saw the alleged written agreement, no less an oral application and agreement.The court agreed and did not award the plaintiff Citibank, Account Stated in their second count of the complaint. No attorney fees...no interest....no written express agreement.Had I not been such a greenhorn I would have changed my plea after they were denied motion for summary judgement twice.As I found out all I needed to do was change my plea from... I do not owe the plaintiff anything.... to...I do not owe the plaintiff anything because of accord and satisfaction. The last thing on my court docket was request for argument for a non-arguable matter which was put on the calendar as OFF. Been 1 year and three months and the plaintiff has made no move to collect or reopen the case.. 

 

The Court can be shown their is no express agreement. Not that there was no agreement at all. As you say the courts realize the redundant and illogical conclusion that there was no agreement to pay the negotiable held by the plaintiff. Only that there were no express written agreements ,in a verbal agreement to use the plaintiffs bankcard.

 

In my case their interrogatory were questionable.

 

"Do you admit that attached hereto as Exhibit B is a true

and correct copy of the defendant's agreement?"

Plaintiff then  provided no Exhibit B . Noticeably the

Plaintiff had "hen scratched " lines through the question.

Defendant asked Plaintiff to explain why they crossed lines

on their own request for admit in his rogs request..Plaintiff's response was:

" Plaintiff objects on the grounds that the request is overly broad, vague, ambiguous, burdensome, and oppressive. Further Plaintiff is under no obligation to justify the contents of a legal proceeding. "

 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.