Coffee_before_tea

Chase gets smacked down by CFPB - Potentially very important info going forward

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Actually, there was a fair bit of this kind of talk in the beginning.  What I observed is that as people started processing what the order actually said, the excitement started to wain and people started backing off of their initial hype over how important this order is.  I've tried to capture this progression with the following posts.

 

 

First, part of the title of the thread itself:

"Potentially very important info going forward"

Entire post dedicated to the list of things chase was found "guilty" of here:

http://www.creditinfocenter.com/community/topic/326260-chase-gets-smacked-down-by-cfpb-potentially-very-important-info-going-forward/?p=1325897

Another entire post dedicated to the financial penalties here:

http://www.creditinfocenter.com/community/topic/326260-chase-gets-smacked-down-by-cfpb-potentially-very-important-info-going-forward/?p=1325900

 

(I don't see how this will change anything about Parker.  I do agree it could cast a doubt as to the trustworthiness of evidence with individual JPs, but our Justice Court appellate system has made it's "hands off" policy pretty clear when reviewing evidence admission by the lower court. I'm definitely interested to see a case anywhere go to SJ or trial using the info in this order, but especially here in AZ.)

So after all of the initial hoopla, it now seems this order is nothing more than a glimmer of hope to keep Chase's records from being admitted at summary judgment or trial.

 

Fair enough.

 

My excitement hasn't waned at all.  I've read the consent order, and re-read it again, yep still excited.  

 

The title of the thread reads:  "Potentially very important info going forward"  

 

Definition of Potential:

1.

possible, as opposed to actual:

2.

capable of being or becoming:

3.

Grammar. expressing possibility:

 

 

Unfortunately, the thread conversation has changed, and has been mired down into: but but but but Summary Judgment, and show me show me show me.  Not only was the thread derailed, it was derailed by incoherent rambling, by someone that just simply cannot understand the concept of trustworthy, as it relates to evidence.  Then, it was pounded on that this Chase Consent Order means nothing, and nothing will change.  Despite a significant number of things that have already changed because of it.   

 

Hey, does anyone know someone that had a Chase account that was one of the 533,000 accounts that won't be collected on?  Oh oh oh, I do!  Thanks CFPB for making Chase sign a consent order that means nothing.   ;-) ;-)

 

If you don't see how this could possibly change Parker, then there is no hope for you and the people from AZ.  If you read the cases you've cited regarding parker, then you'll also see the term "indicia" of trust, in regards to records from a 3rd party.  In regards to a Chase account, that trust is no longer "probable".  I guess the appellate judge (harris is that the correct name?), will have to explain in her opinion how Chases records from 2009-2014 were wholly untrustworthy, yet those same records being submitted by XYZ-JDB is somehow reliable & trustworthy.   I never said it would work, but if you're not trying this argument, then that's unfortunate.

 

So after all of the initial hoopla, it now seems this order is nothing more than a glimmer of hope to keep Chase's records from being admitted at summary judgment or trial.

 

In many courts, a glimmer of hope preventing records from being admitted, is a huge step forward.  Especially when you're the defendant.

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Affidavits admitting records by a JDB?  Sorry, no can do.

 

Here's another interesting tidbit in the Consent order:

 

Page 29, Par 73.

 

f. In their contracts or other agreements with Debt Buyers, Respondents will prohibit Debt Buyers from swearing to the validity or otherwise attesting to the accuracy of any documentation or information provided by Respondents, unless the Debt Buyer must do so as part of filing a bankruptcy proof of claim (POC) based on information from Respondents or are otherwise allowed by law to do so.

 

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If you don't see how this could possibly change Parker, then there is no hope for you and the people from AZ.  If you read the cases you've cited regarding parker, then you'll also see the term "indicia" of trust, in regards to records from a 3rd party.  In regards to a Chase account, that trust is no longer "probable".  I guess the appellate judge (harris is that the correct name?), will have to explain in her opinion how Chases records from 2009-2014 were wholly untrustworthy, yet those same records being submitted by XYZ-JDB is somehow reliable & trustworthy.   I never said it would work, but if you're not trying this argument, then that's unfortunate.

They weren't wholly untrustworthy.  It was a portion of some accounts from that period of time.  What portion has not been determined.  It could be 1% or 90%.  Even if it was 50%, I can see where an appeals court would say that it's just as likely as not that any particular account was included and side with the defendant.  Since there's nothing that spells out how to know what accounts were affected I wouldn't be the least bit surprised if the courts here require a defendant to show independent corroborating evidence that their account was inaccurate.  So in that sense, the order doesn't really help.

 

At any rate, your response isn't about changing the effect Parker has on these cases.  One party can still introduce the records of a non-party - that's what Parker does.  The reliability has always been a component of those introductions.  Until one of these cases go before Harris or a real CoA here, there's no way to know how it will view what's happened with Chase on an account from the affected date range.

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Affidavits admitting records by a JDB?  Sorry, no can do.

 

Here's another interesting tidbit in the Consent order:

 

Page 29, Par 73.

 

f. In their contracts or other agreements with Debt Buyers, Respondents will prohibit Debt Buyers from swearing to the validity or otherwise attesting to the accuracy of any documentation or information provided by Respondents, unless the Debt Buyer must do so as part of filing a bankruptcy proof of claim (POC) based on information from Respondents or are otherwise allowed by law to do so.

This paragraph was perfect until they included this gaping loophole at the end.  "Law" includes caselaw.  Parker (and all similar rulings and statutes) allows one party to swear to the validity of another party's records.

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Yes harry I did use the term "icing on the cake". Hopefully this won't cause widespread devistation.

Way to go with finding the negativity in any thread, you are very gifted in that area.

Do you have something productive or even interesting to contribute here or are you just the corny side show act?

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Affidavits admitting records by a JDB?  Sorry, no can do.

 

Here's another interesting tidbit in the Consent order:

 

Page 29, Par 73.

 

f. In their contracts or other agreements with Debt Buyers, Respondents will prohibit Debt Buyers from swearing to the validity or otherwise attesting to the accuracy of any documentation or information provided by Respondents, unless the Debt Buyer must do so as part of filing a bankruptcy proof of claim (POC) based on information from Respondents or are otherwise allowed by law to do so.

 

 

@Coffee_before_tea

 

That provision is related to sales after the effective date of the order (which is the date the order was issued).   As of yet, we don't know if Chase will resume selling debts.  But, if they do, definitely use that part of the Order.

 

However, in a lawsuit based upon a Chase account that was sold before the effective date, I would raise that part of the Order to show that Chase has agreed to such a prohibition in future debt sales and that it would be unfair to allow a debt buyer to swear to the current debt simply because it was sold before Chase agreed to the prohibition.

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They weren't wholly untrustworthy.  It was a portion of some accounts from that period of time.  What portion has not been determined.  It could be 1% or 90%.  Even if it was 50%, I can see where an appeals court would say that it's just as likely as not that any particular account was included and side with the defendant.  Since there's nothing that spells out how to know what accounts were affected I wouldn't be the least bit surprised if the courts here require a defendant to show independent corroborating evidence that their account was inaccurate.  So in that sense, the order doesn't really help.

 

At any rate, your response isn't about changing the effect Parker has on these cases.  One party can still introduce the records of a non-party - that's what Parker does.  The reliability has always been a component of those introductions.  Until one of these cases go before Harris or a real CoA here, there's no way to know how it will view what's happened with Chase on an account from the affected date range.

You can't say that it definitively doesn't help.  You have no idea, as there are many factors that will be in play, so unless you're the great carnac, then maybe you should use words like "potentially" to qualify your statements.

 

It really doesn't matter the percentage of untrustworhty accounts, the burden of proof still remains on the JDB.  Many people dislike when I bring up the TILA 1643, but this is another scenario to use it.  This doesn't mean the defendant has to rummage through their records, to find any evidence that will help the JDBs case.

 

I would think the more likely scenario, would be the Court requiring the JDB to provide more corroborating evidence, to show that the Chase account is accurate, valid, and collectible.  It's an impermissible shift of burden.

 

 

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You can't say that it definitively doesn't help. You have no idea, as there are many factors that will be in play, so unless you're the great carnac, then maybe you should use words like "potentially" to qualify your statements.

Yes, you're right. I'll revise my opinion to say that it probably and in all likelihood doesn't help then.

By the way, if we're going to break down each other's use of qualifiers, you could use some work in this area as well. You did say it "will" and "does" affect litigation.  I don't have time right now but I know I could find a dozen other examples from you in just this thread.  That is what started this branch of the discussion, donchano.

 

It really doesn't matter the percentage of untrustworhty accounts, the burden of proof still remains on the JDB.  Many people dislike when I bring up the TILA 1643, but this is another scenario to use it.  This doesn't mean the defendant has to rummage through their records, to find any evidence that will help the JDBs case.

It absolutely matters what percentage are untrustworthy.  What makes you think there is no difference between 1% and 100%?  Or even 30% vs. 70%?  It's huge.  One is more likely to have happened than the other.  That's all the courts look at in a civil "preponderance of evidence" case.

 

TILA 1643 applies when there is a claim of unauthorized use.  If this is truly the case, we have seen it time and again where JDBs fold at the sight of an ID theft/fraud victim affidavit so TILA will "likely" not come into play on any Chase JDB suit where there has been unauthorized use (at least for the near future).

 

I would think the more likely scenario, would be the Court requiring the JDB to provide more corroborating evidence, to show that the Chase account is accurate, valid, and collectible.  It's an impermissible shift of burden.

Possibly.  As I and others keep trying to convey, the effect remains to be seen in each jurisdiction.  No one knows.

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Yes, you're right. I'll revise my opinion to say that it probably and in all likelihood doesn't help then.

By the way, if we're going to break down each other's use of qualifiers, you could use some work in this area as well. You did say it "will" and "does" affect litigation.  I don't have time right now but I know I could find a dozen other examples from you in just this thread.  That is what started this branch of the discussion, donchano.

 

It absolutely matters what percentage are untrustworthy.  What makes you think there is no difference between 1% and 100%?  Or even 30% vs. 70%?  It's huge.  One is more likely to have happened than the other.  That's all the courts look at in a civil "preponderance of evidence" case.

 

TILA 1643 applies when there is a claim of unauthorized use.  If this is truly the case, we have seen it time and again where JDBs fold at the sight of an ID theft/fraud victim affidavit so TILA will "likely" not come into play on any Chase JDB suit where there has been unauthorized use (at least for the near future).

 

Possibly.  As I and others keep trying to convey, the effect remains to be seen in each jurisdiction.  No one knows.

 

It will affect litigation, as it gives you evidence of untrustworthy records.  Make the argument, and it will affect the course of trial.  It's difficult to quantify how much it will affect it, but it will.  Even if you have another appeal point.

 

It does not matter the percentage of accounts that are untrustworthy.  This is a legal conclusion that has to be proven in court.  Chase hasn't identified what percentage was defective, and neither has the CFPB.  What was identified, is that Chase, from 2009-2014 was found to have used deceptive practices, robo-signed affidavits from people without knowledge, and sold bad/false/uncollectible accounts.  The Court can't make the assumption that a particular account is one of those affected, or not.  They will need to see admissible evidence to make that determination.  

 

Once again, for the millionth time:  It is a preponderance of ADMISSIBLE evidence.  If 9 out of 10 records are not allowed as evidence, then it will be a preponderance of that 1 record.  Each bit of evidence needs to have foundation laid, be authenticated, and exhibit trustworthiness, in order to be admitted into record.

 

 

1643 (b Burden of Proof:  In any action by a card issuer to enforce liability for the use of a credit card, the burden of proof is upon the card issuer to show that the use was authorized or, if the use was unauthorized, then the burden of proof is upon the card issuer to show that the conditions of liability for the unauthorized use of a credit card, as set forth in subsection (a) of this section, have been met.

 

Nowhere in the statute does it say that the cardholder must make a "Claim".  It says in "Any action", the burden is on the card issuer (or assignee), to show that use was authorized.  The only thing the debtor has to do is dispute the account, and cite TILA 1643 a & b.  The burden shifts to the plaintiff.  That brings us to, how can a JDB show that the account use was authorized, especially when chases records are already suspect.  Like I said before, people can add this angle to their defense if they want to, or not, I don't care either way.

 

The "effect" can only be known, if pro se's and attorneys start using the things discussed in this thread as part of their defense, then we can start to see if it will have a positive effect.  

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It will affect litigation

Ok so you can continue to make absolute statements AND take issue when others do the same?

That's called being a hypocrite.

 

It does not matter the percentage of accounts that are untrustworthy.  This is a legal conclusion that has to be proven in court.  Chase hasn't identified what percentage was defective, and neither has the CFPB.  What was identified, is that Chase, from 2009-2014 was found to have used deceptive practices, robo-signed affidavits from people without knowledge, and sold bad/false/uncollectible accounts.  The Court can't make the assumption that a particular account is one of those affected, or not.  They will need to see admissible evidence to make that determination.

 Of course they can.  They do it all the time.  That's their job.  Again,  the "preponderance of evidence" makes that job that much easier. 

 

Nowhere in the statute does it say that the cardholder must make a "Claim".  It says in "Any action", the burden is on the card issuer (or assignee), to show that use was authorized.

Which is accomplished with account statements showing charges and payments.

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Ok so you can continue to make absolute statements AND take issue when others do the same?

That's called being a hypocrite.

 

 Of course they can.  They do it all the time.  That's their job.  Again,  the "preponderance of evidence" makes that job that much easier. 

 

Which is accomplished with account statements showing charges and payments.

 

Doing nothing would give no effect.  Doing something alters the course of litigation.  This "something" is purely speculative, but could end with stricken records, dismissal, judgment, continuance, etc...  I stand by my claim that it will affect litigation; whether it is a positive or negative result, the course of litigation is affected by adding additional arguments

 

Your account statements & payments?  You mean from the Chase account that has bad information?  You mean the account records, that you'll be moving to strike, because they are untrustworthy?  Who made the charges, were they authorized?  Is that on the statement?  Who made the payments?  Is that on the statement?  Were these paper statements, or were they email only?  What email address were they sent to?

 

Maybe I need to explain the way Court works:

 

1. JDB requests records to be entered into evidence.

2.  Evidence has to have foundation, authentication and be trusworthy

3.  If, evidence is found to be authentic and trustworthy, then evidence is admitted into record

4.  This is where you make your arguments regarding the entered evidence (i.e. TILA, etc...)

5.  The judge then makes a decision based from the preponderance of the evidence and arguments

 

I'll give you an example:  I had 3 BOS, 1 affidavit from OC, 1 affidavit from JDB, Card agreement, 6 months of card statements.   Would you like to know how many of them were entered into evidence?  ZERO.  The dismissal read:  The JDB is unable to produce evidence in this matter.

 

There must have been an effective argument somewhere down the line.  ;)

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 I'll give you an example:  I had 3 BOS, 1 affidavit from OC, 1 affidavit from JDB, Card agreement, 6 months of card statements.   Would you like to know how many of them were entered into evidence?  ZERO.  The dismissal read:  The JDB is unable to produce evidence in this matter. 

Good for you.   Most of us don't have the luxury of having our cases heard by your judge and instead many have to deal with real world litigation.

 

The part you miss every time is that just because things went a certain way for you doesn't mean it will for everyone, nor does it even mean the judge was right. For all anyone knows, that ruling could have been reversed had the plaintiff chosen to appeal it.

 

Then there's the other possibility which is maybe the evidence was genuinely crap to begin with and your arguments had nothing to do with the judge's ruling.  Judges do think for themselves on occasion. 

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Good for you.  

Good for you indeed. Don't hate.

 many have to deal with real world litigation.

AZ Justice court is far from "real world litigation" and it's not typical of many other courts. Most people will have a judge. Of course not all will win.  In AZ it's different and now arbitration is agreed by most here to be the best option, so a lot of problems may be solved there and in the AZ threads. And if not, it's not real world litigation, I don't even think you have a real judge there. You talk to defendants in other states just as if they were there with you in AZ justice court.

 

The part you miss every time is that just because things went a certain way for you doesn't mean it will for everyone,

I think you do a fair job of this yourself. Not everyone will be a loser.

 

 

Then there's the other possibility which is maybe the evidence was genuinely crap to begin

That's pretty much a given, remember we are talking about a bottom feeder here.

with and your arguments had nothing to do with the judge's ruling.

Coffee's objection and arguments had everything to do with the judge's ruling. If it wasn't for the fact objections and arguments were presented; the judge would have had no choice but to admit the evidence because both sides would have been in a stipulation, obviously. If the judge is hearing no argument or objection to the evidence; then there isn't one. 

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Good for you.   Most of us don't have the luxury of having our cases heard by your judge and instead many have to deal with real world litigation.

 

The part you miss every time is that just because things went a certain way for you doesn't mean it will for everyone, nor does it even mean the judge was right. For all anyone knows, that ruling could have been reversed had the plaintiff chosen to appeal it.

 

Then there's the other possibility which is maybe the evidence was genuinely crap to begin with and your arguments had nothing to do with the judge's ruling.  Judges do think for themselves on occasion. 

 

Real world litigation?  Ut courts are generally a rubber stamp in favor of creditors, so how is this not "real world"?   

 

Have you ever considered that some people can formulate, and articulate a more comprehensive argument than you?  I see it in other cases, and those are the cases that I based my arguments on.  This isn't just my case, it's many others that have had to spend 24/7 learning statutes & civil procedure, then having the sense of timing, strategy, and execution.  You lost your case, and your appeal.  I've read your posts, and my pleadings were more comprehensive than yours.  I made half a dozen additional arguments, than the ones you made.  I didn't just stop my argument at the standing, and hearsay exception.  

 

In essence, how are paths diverge, is you claim that your standard arguments don't work in AZ (and others), and to be honest, if I took your approach in my case, I'm sure I would have lost too.  But, I and others I try to expand and supplement those standard arguments, with different & additional tactics, statutes, rules.  Anything that could potentially create a positive outcome.  Anything.   The issue is, you claim none of these additional & different tactics will work, that may be true in AZ, but that's not necessarily the case nationwide.  

 

Then there's the other possibility which is maybe the evidence was genuinely crap to begin with and your arguments had nothing to do with the judge's ruling.  Judges do think for themselves on occasion. 

 

 

Above is my favorite line of yours.  The evidence was never admitted.  The JDB couldn't authenticate a single piece.  

 

Let's hope that judges are following procedure, otherwise they won't be judges very long.  One painful lesson I learned early on, was I expected the judge to see the flaws in the JDB's case, and make the determination himself.  I realized that it is up to you to make the arguments.

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 One painful lesson I learned early on, was I expected the judge to see the flaws in the JDB's case, and make the determination himself.  I realized that it is up to you to make the arguments.

 

Indeed. If you don't make the arguments then the judge will assume there is none.

 

The judge probably did see the flaws in jdb's case, then waited to see if there would be an objection to it.

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This has drifted into "I'm better than you" and doesn't belong in this topic so my last post here will be to clarify that I didn't stop at hearsay and standing. You obviously didn't read my case because you would know that if you had.

 

Peace. 

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@Coffee_before_tea

 

 It says in "Any action", the burden is on the card issuer (or assignee), to show that use was authorized.

 

 

I have to disagree.

 

§ 1602(o)

 

(o) The term “card issuer” means any person who issues a credit card, or the agent of such person with respect to such card.

 

A JDB does not issue credit cards.  There's no court precedent at all that shows a JDB is defined as a card issuer and would be bound by § 1643(b).

 

The only thing the debtor has to do is dispute the account, and cite TILA 1643 a & b.  The burden shifts to the plaintiff.

 

 

1643(a)(E):

 

(E) the unauthorized use occurs before the card issuer has been notified that an unauthorized use of the credit card has occurred or may occur as the result of loss, theft, or otherwise;

 

You have to show that you notified the OC that the card had been or possibly had been used by someone who was not authorized.  Here's a ruling from a LA court that tied 1643(b) to 1666(a) (notifying a creditor of billing errors).

 

Citibank (South Dakota), NA v. Mayo, 58 So. 3d 960 - La: Court of Appeals, 2nd Circuit 2011

Citibank concedes its burden of proving authorized use under 15 U.S.C. § 1643(b).  It contends, however, that under another provision of the Consumer Credit Cost Disclosure law, 15 U.S.C. § 1666(a), any obligor who wishes to dispute a credit statement must give the creditor, within 60 days of the statement, written notice which "indicates the obligor's belief that the statement contains a billing error and the amount of such billing error[.]" Citibank argues that Mayo never challenged any statement; to the contrary, he made many payments and continued using the card.

Simply put, Mayo never contested any statement as he might have under 15 U.S.C. § 1666(a);

 

Using a card, making payments, and then not disputing any possible unauthorized use until sued by a JDB would not shift the burden to the JDB.   If you can't show that you notified the OC of possible unauthorized use, why would you bring it up and take the chance that a judge is going to ask you if you ever notified the OC of unauthorized use?

 

Would raising TILA help in lawsuits where Chase is the OC?  I don't know.  Personally, I wouldn't use TILA with ANY JDB lawsuit, even one in which the OC was Chase.  The reason is because it opens the door for the JDB to cite 1643(a)(E) and 1666(a) and also to point out that it is not a card issuer. 

 

We've been discussing the possible use of the Order to cast doubt on Chase records and the ability of a JDB to authenticate those records.  Unless you can show you notified Chase of unauthorized use, bringing up TILA is not going to help. 

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@BV80
 
The JDB is an assignee, and has all the burdens and rights of the OC.  The TILA is in place specifically for the purpose of protecting consumers.  If the charges were not authorized, then the JDB could skirt this statute, simply by saying:  "We're not card issuers", yet the unauthorized charges remain, whether it's the OC or JDB.  So the essence of what you are saying is:  "if the OC sells the account, then the debtor has no federal statutory recourse, where there would be recourse if the account is not sold".
 
Crestar Bank, NA v. Cheevers, 744 A. 2d 1043 - DC: Court of Appeals 2000

 

There is no statutory requirement for the card holder to notify the card issuer, that bars them from seeking the protections of 1643.  Beyond that, the card issuer/assignee must meet the 6 conditions, in order to meet their burden of proof.  The Crestar opinion lays this out well.  Cheevers won both cases, by using the TILA 1643.

 

DBI ARCHITECTS v. AMERICAN EXPRESS TRAVEL-RELATED, 388 F. 3d 886 - Court of Appeals

Holding that the debtor does not have to notify the card issuer, in order to use the TILA protections.

 

Jones v. CITYBANK SOUTH DAKOTA, NA, Ark: Court of Appeals, 3rd Div. 2008

If a cardholder denies or cannot ascertain whether the charges on the card are hers, she may put the card issuer to its proof that the charges were authorized.

 

Harp v. Security Credit Services, LLC, 2013 Ark. App. 202 - Ark: Court of Appeals, 1st Div. 2013

Showing that an Assignee adhered to the TILA protections, and holding the submitted records did not satisfy the burden of proof.

 

 

Would raising TILA help in lawsuits where Chase is the OC?  I don't know.  Personally, I wouldn't use TILA with ANY JDB lawsuit, even one in which the OC was Chase.  The reason is because it opens the door for the JDB to cite 1643(a)(E) and 1666(a) and also to point out that it is not a card issuer. 

 

 

This is your choice, but I don't see why you wouldn't use these protections, that's what they are there for.  So what if the JDB successfully bypasses this argument, what harm is done?  None.  The more important point is:  What if these arguments are successful, and you prevail?   --edit-- I hope you're not implying to only use the TILA in your defense.  Using the TILA argument would be in addition to any-other-argument-statute-etc.  It's another hurdle the JDB has to overcome.

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@Coffee_before_tea

 

Three of the 4 cases you cited were with original creditors, not JDBs.

 

Cheevers disputed the charges with the OC. 

 

DBI lost because they paid the bills even though AMEX had alerted them that there was possible fraud.  The court also noted a 2nd Circuit Court of Appeals ruling:

 

In a more recent case relying on Minskoff, the Second Circuit similarly held that, because a cardholder "did not review his credit card statements during a two-year period while continuing to pay bills without protest, the charges made by an employee that had fraudulently obtained and used his credit card were cloaked in apparent authority." Carrier v. Citibank, N.A., 180 Fed.Appx. 296, 296-97 (2d Cir.2006).

 

Use of a credit card can determine if one has accepted the terms of the cardmember agreement.   Payment of bills over a period of time can determine if one authorized the charges.  In New Century Financial Services, Inc. v. Dennegar, (NJ), the court noted in response to the defendant's raising of TiLA 1643(a) and (b) that payments indicated the defendant authorized the use of the card. 

 

The other 2 cases are both AR rulings.  Arkansas is obviously a debtor-friendly state, and that's good.

 

The JDB is an assignee, and has all the burdens and rights of the OC.

 

 

No, it does not have all the burdens.   The purpose is proper disclosure about credit.   If you read through TILA, it references the disclosures required by creditors.  JDBs don't have to make disclosures because the account has been closed and no more credit is issued.   If they had all the burdens of an OC, they'd have to send monthly statements just like OC. 

 

The 7th Circuit Court of Appeals has ruled that purchasers of a delinquent account are not "card issuers" under TILA.

 

 

Neff v. Capital Acquisitions & Management Co.   7th Circuit Court of Appeals, 2003

Because neither Capital One nor CAMCO (Capital Acquisitions & Management Co.) issued Neff or Robb a "credit card," they are not "card issuers" under the Act.



Peters v. Financial Recovery Services, Inc. WD Missouri 2014

However, TILA only applies to "creditors" which refers only to: "a person who both (1) regularly extends ... consumer credit ... and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable...." 15 U.S.C. § 1602(g). Thus, Defendant does not fit within that definition and is not subject to TILA because Defendant is a debt collector and not the person to whom the debt was originally payable.
 

 

Bunce v. Portfolio Recovery Associates, LLC.  Dist. Court, D. Kansas 2014

The plaintiffs contend that waiver may be inferred in light of the regulations defining when creditors must send monthly statements under the Truth In Lending Act. But nothing in the relevant regulation, 12 C.F.R. § 226.5, precludes an assignee of the debt from seeking to recover interest. Section 226.5 determines when a "creditor" must supply financing statements, but the obligation to send statements ends after the sale of the account. See 15 U.S.C.A. § 1602(g) (a "creditor" is "the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness"); 12 C.F.R. § 226.5(b)(1) ("creditors" must send periodic statements).

 

 

Another note from Neff

 

Where Congress and the Federal Reserve wished to impose requirements on assignees or subsequent holders, they did so explicitly. See, e.g., 15 U.S.C. § 1641 (liability of assignees under the Act); 12 C.F.R. pt. 226, Supp. I, ¶ 20-1 (holding that a creditor "or subsequent holder" is required to provide certain disclosures under § 226.19 of the Act, relating to residential mortgage and variable-rate transactions).

 

 

Here is § 226.19(b):

 

(b) Certain variable-rate transactions. If the annual percentage rate may increase after consummation in a transaction secured by the consumer's principal dwelling with a term greater than one year, the following disclosures must be provided at the time an application form is provided or before the consumer pays a non-refundable fee, whichever is earlier:

 

 

The only time TILA mentions an "assignee" is in regard to mortgages or secured debts.  It requires that the "assignee" send disclosures.  Since no disclosures are sent on closed accounts and credit card accounts are not secured by a person's home, "assignee" as referenced in TILA would not apply to a JDB.

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@Coffee_before_tea

 

Three of the 4 cases you cited were with original creditors, not JDBs.

 

Cheevers disputed the charges with the OC. 

 

DBI lost because they paid the bills even though AMEX had alerted them that there was possible fraud.  The court also noted a 2nd Circuit Court of Appeals ruling:

 

In a more recent case relying on Minskoff, the Second Circuit similarly held that, because a cardholder "did not review his credit card statements during a two-year period while continuing to pay bills without protest, the charges made by an employee that had fraudulently obtained and used his credit card were cloaked in apparent authority." Carrier v. Citibank, N.A., 180 Fed.Appx. 296, 296-97 (2d Cir.2006).

 

Use of a credit card can determine if one has accepted the terms of the cardmember agreement.   Payment of bills over a period of time can determine if one authorized the charges.  In New Century Financial Services, Inc. v. Dennegar, (NJ), the court noted in response to the defendant's raising of TiLA 1643(a) and (b) that payments indicated the defendant authorized the use of the card. 

 

The other 2 cases are both AR rulings.  Arkansas is obviously a debtor-friendly state, and that's good.

 

 

No, it does not have all the burdens.   The purpose is proper disclosure about credit.   If you read through TILA, it references the disclosures required by creditors.  JDBs don't have to make disclosures because the account has been closed and no more credit is issued.   If they had all the burdens of an OC, they'd have to send monthly statements just like OC. 

 

The 7th Circuit Court of Appeals has ruled that purchasers of a delinquent account are not "card issuers" under TILA.

 

 

Neff v. Capital Acquisitions & Management Co.   7th Circuit Court of Appeals, 2003

Because neither Capital One nor CAMCO (Capital Acquisitions & Management Co.) issued Neff or Robb a "credit card," they are not "card issuers" under the Act.

Peters v. Financial Recovery Services, Inc. WD Missouri 2014

However, TILA only applies to "creditors" which refers only to: "a person who both (1) regularly extends ... consumer credit ... and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable...." 15 U.S.C. § 1602(g). Thus, Defendant does not fit within that definition and is not subject to TILA because Defendant is a debt collector and not the person to whom the debt was originally payable.

 

 

Bunce v. Portfolio Recovery Associates, LLC.  Dist. Court, D. Kansas 2014

The plaintiffs contend that waiver may be inferred in light of the regulations defining when creditors must send monthly statements under the Truth In Lending Act. But nothing in the relevant regulation, 12 C.F.R. § 226.5, precludes an assignee of the debt from seeking to recover interest. Section 226.5 determines when a "creditor" must supply financing statements, but the obligation to send statements ends after the sale of the account. See 15 U.S.C.A. § 1602(g) (a "creditor" is "the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness"); 12 C.F.R. § 226.5(b)(1) ("creditors" must send periodic statements).

 

 

Another note from Neff

 

Where Congress and the Federal Reserve wished to impose requirements on assignees or subsequent holders, they did so explicitly. See, e.g., 15 U.S.C. § 1641 (liability of assignees under the Act); 12 C.F.R. pt. 226, Supp. I, ¶ 20-1 (holding that a creditor "or subsequent holder" is required to provide certain disclosures under § 226.19 of the Act, relating to residential mortgage and variable-rate transactions).

 

 

Here is § 226.19(b):

 

(b) Certain variable-rate transactions. If the annual percentage rate may increase after consummation in a transaction secured by the consumer's principal dwelling with a term greater than one year, the following disclosures must be provided at the time an application form is provided or before the consumer pays a non-refundable fee, whichever is earlier:

 

 

The only time TILA mentions an "assignee" is in regard to mortgages or secured debts.  It requires that the "assignee" send disclosures.  Since no disclosures are sent on closed accounts and credit card accounts are not secured by a person's home, "assignee" as referenced in TILA would not apply to a JDB.

In McGhee v Buffalo Associates (2013) the fed dist court in TN cited "Neff" that TILA would not to apply to Buffalo Associates

\

https://scholar.google.com/scholar_case?case=9587170686699385820&q=neff+v+capital+acquisitions&hl=en&as_sdt=ffffffffffffe03

 

 

 

 

If Plaintiff alleges Defendant owns the debt now at issue, Defendant fits comfortably within the Neff holding, and is neither a card issuer nor in a contractual relationship with Capital One Bank sufficient to confer agency status on it. If, as the Plaintiff appears to argue, Defendant is not the owner of the debt, but merely an entity collecting debt on behalf of Capital One Bank, Defendant still fails to qualify as an agent for the purposes of the TILA. The Court reaches this conclusion because the complaint does not allege any of the credit privileges alluded to by the official staff interpretation in 12 C.F.R. pt. 226, Supp. I, ¶ 2(a)(7) and relied upon by Neff. At least one other member of this court has concluded, on a similar complaint, "[p]roviding support services, as opposed to credit-issuing services, does not make an entity the agent of a `card issuer' under TILA." King v. AllianceOne Receivables Mgmt., Inc., No. 2:12-CV-314, 2012 WL 4758220, at *3 (E.D.Tenn. Oct. 5, 2012) (citing 12 C.F.R. pt. 226, Supp. I, ¶ 2(a)(7)). The King court concluded "[f]or § 1637(B) to apply to [the defendant] under an agency theory, there must have been an agreement under which plaintiff could use a line of credit with [the defendant] to pay obligations incurred by use of the credit card." Id.; see also Neff, 352 F.3d at 1120Langenfeld v. Chase Bank USA, N.A., 537 F.Supp.2d 1181, 1205 (N.D.Okla.2008) ("The Official Staff Commentary to the TILA regulations explains that to become an `agent' of a card issuer, there must be 679*679 an agreement that `the cardholder may use a line of credit with the [alleged agent] to pay obligations incurred by use of the credit card.'"). No such line of credit has been alleged here.

 

 

 

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@Coffee_before_tea

 

Three of the 4 cases you cited were with original creditors, not JDBs.

 

Cheevers disputed the charges with the OC. 

 

DBI lost because they paid the bills even though AMEX had alerted them that there was possible fraud.  The court also noted a 2nd Circuit Court of Appeals ruling:

 

In a more recent case relying on Minskoff, the Second Circuit similarly held that, because a cardholder "did not review his credit card statements during a two-year period while continuing to pay bills without protest, the charges made by an employee that had fraudulently obtained and used his credit card were cloaked in apparent authority." Carrier v. Citibank, N.A., 180 Fed.Appx. 296, 296-97 (2d Cir.2006).

 

Use of a credit card can determine if one has accepted the terms of the cardmember agreement.   Payment of bills over a period of time can determine if one authorized the charges.  In New Century Financial Services, Inc. v. Dennegar, (NJ), the court noted in response to the defendant's raising of TiLA 1643(a) and (b) that payments indicated the defendant authorized the use of the card. 

 

The other 2 cases are both AR rulings.  Arkansas is obviously a debtor-friendly state, and that's good.

 

 

No, it does not have all the burdens.   The purpose is proper disclosure about credit.   If you read through TILA, it references the disclosures required by creditors.  JDBs don't have to make disclosures because the account has been closed and no more credit is issued.   If they had all the burdens of an OC, they'd have to send monthly statements just like OC. 

 

The 7th Circuit Court of Appeals has ruled that purchasers of a delinquent account are not "card issuers" under TILA.

 

 

Neff v. Capital Acquisitions & Management Co.   7th Circuit Court of Appeals, 2003

Because neither Capital One nor CAMCO (Capital Acquisitions & Management Co.) issued Neff or Robb a "credit card," they are not "card issuers" under the Act.

Peters v. Financial Recovery Services, Inc. WD Missouri 2014

However, TILA only applies to "creditors" which refers only to: "a person who both (1) regularly extends ... consumer credit ... and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable...." 15 U.S.C. § 1602(g). Thus, Defendant does not fit within that definition and is not subject to TILA because Defendant is a debt collector and not the person to whom the debt was originally payable.

 

 

Bunce v. Portfolio Recovery Associates, LLC.  Dist. Court, D. Kansas 2014

The plaintiffs contend that waiver may be inferred in light of the regulations defining when creditors must send monthly statements under the Truth In Lending Act. But nothing in the relevant regulation, 12 C.F.R. § 226.5, precludes an assignee of the debt from seeking to recover interest. Section 226.5 determines when a "creditor" must supply financing statements, but the obligation to send statements ends after the sale of the account. See 15 U.S.C.A. § 1602(g) (a "creditor" is "the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness"); 12 C.F.R. § 226.5(b)(1) ("creditors" must send periodic statements).

 

 

Another note from Neff

 

Where Congress and the Federal Reserve wished to impose requirements on assignees or subsequent holders, they did so explicitly. See, e.g., 15 U.S.C. § 1641 (liability of assignees under the Act); 12 C.F.R. pt. 226, Supp. I, ¶ 20-1 (holding that a creditor "or subsequent holder" is required to provide certain disclosures under § 226.19 of the Act, relating to residential mortgage and variable-rate transactions).

 

 

Here is § 226.19(b):

 

(b) Certain variable-rate transactions. If the annual percentage rate may increase after consummation in a transaction secured by the consumer's principal dwelling with a term greater than one year, the following disclosures must be provided at the time an application form is provided or before the consumer pays a non-refundable fee, whichever is earlier:

 

 

The only time TILA mentions an "assignee" is in regard to mortgages or secured debts.  It requires that the "assignee" send disclosures.  Since no disclosures are sent on closed accounts and credit card accounts are not secured by a person's home, "assignee" as referenced in TILA would not apply to a JDB.

 

BV, the cases I cited deal specifically with the Burden of Proof (1643B).  9/10 defendants have disputed the accounts in their answers & defense.  Crestar also held that there are NO statutory requirements for notification to the issuer, in order for the debtor to invoke the 1643b protections.

 

The cases you've cited do not align with what we are talking about, which is specifically, the burden of proof protection afforded by the TILA 1643b.  All of your cited cases are where a debtor sues for TILA violations.  

 

Carrier v. Citibank:   In this case, they knew who made the unauthorized charges, and the carriers continued to make payments for two years, creating an agency relationship with their rouge employee.  This is not about the burden of proof, it was regarding the Carriers seeking a refund of the supposed-unauthorized-charges.  Citi met their burden of proof.  This case is not applicable to what we are talking about.

 

Neff v. Capital:  This case is about holding the assignee liable under the TILA.  This is for statutory redress, not showing the burden of proof protections afforded by the TILA.  Applicable when a debtor sues a creditor.

 

Peters v. Financial:  Same as Neff, is also about liability under the TILA, not the burden of proof protections.

 

Bunce v. portfolio:  Same as above.  When a debtor sues a creditor/jdb, and it falls under the liability of a card issuer or assignee according to the statute.

 

McGhee v. Buffalo:  Same as above.

 

So, I've posted several cases specifically describing the burden of proof portion of the TILA.  You posted cases showing that you can't sue a creditor/assignee for TILA violations, which is not relevant to the burden of proof protections.  The Agency relationship angle could only be used if there is an identified party, on which Agency could be inferred between the card holder & the 3rd party.

 

Look, the bottom (as we have argued about the TILA before), is that I've shown cases where a successful use of 1643B occurred.  Have I stated that this is a end-all-be-all defense, and it's the only one you should use?  NO, I haven't.  Using this statutory protection may, or may not work, but one thing is for sure, it won't hurt a defendant whom wishes to use it.   So bring me specific cases regarding 1643B, and the burden of proof.  I would say at best, this defense is rarely used, and/or cited;  however, it doesn't change the fact that there are 50 states, in which it may work.

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After reading thru this thread I have decided............................that nothing has been decided........................that nothing will be decided AND......................

 

 

I'm going down and get a case of Wild Turkey and see if I can finish it all by bedtime.....................................Straight on the Rocks...

 

 

Maybe the Pain will leave the Body....

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