Initiate Arb before they sue?

[small-town-girl]

Hello all,

I’m a newbie, but have been following this site for weeks. Just want to say in advance of how appreciative I am to have found it, and for your helpful advice to others.  

My question is regarding multiple synchrony accounts.  I have 4 accounts that have recently charged off and I am now getting collection letters from FMS.  In doing research on this site, I am wondering if I should send a DV letter with a letter advising them that I am electing arbitration with JAMS.  Or do I just lay low and hope they don’t sue?  And if which at that time, that were to happen, elect arbitration?  I’m just worried if I don’t do this now they may combine them into one lawsuit.  The total of all is around $10,000 and arbitration may still be profitable to them to pursue?  Any advice would be greatly appreciated.  I am in West Virginia if that helps.  ?

[Harry Seaward]

1 hour ago, small-town-girl said:

I am wondering if I should send a DV letter with a letter advising them that I am electing arbitration with JAMS.

A DV letter is fine to send to a debt collector for the purposes of a DV, but debt collectors (as opposed to debt buyers) have zero concern for arbitration. They wouldn't even know what you were talking about. Also, unless you intend to also pay the initiation fee for each account you want heard in arbitration, tipping your hand to arbitration is meaningless. It doesn't stop them from filing a lawsuit. The only way to do that is pay the arb filing fees. 

1 hour ago, small-town-girl said:

 I’m just worried if I don’t do this now they may combine them into one lawsuit.

They can likely combine (called a joinder) them into a single action regardless. There is nothing in the rules of arbitration that prevent a joinder of claims, and every jurisdiction I know of permits this practice because it reduces strain on everyone's resources.

1 hour ago, small-town-girl said:

The total of all is around $10,000 and arbitration may still be profitable to them to pursue?

If Synchrony were to sue, I would bet money they would follow you into arbitration, even if it was only one of the 4 accounts. Synchrony has lost real cash money on these debts. If it costs them $9,000 to collect $10,000, they're still ahead of the game. On the other hand, If the accounts get sold (which seems to be synchrony's SOP), I would bet money that whoever buys it won't follow into arbitration, even if the same outfit ends up with all 4 accounts and joins all 4 into a single action. 

[small-town-girl]

Thank you Harry for that information!  That helps  a lot.  I wasn’t sure how aggressive Synchrony was, or how they tended to handle their charge offs.  

[Harry Seaward]

5 hours ago, small-town-girl said:

I wasn’t sure how aggressive Synchrony was, or how they tended to handle their charge offs.  

It's been a while since I have seen reports of Synchrony suing on their own paper.  Especially when you compare them to banks like Capital One, Citi and BofA.  It's far more common to see people being sued on Synchrony debts by debt buyers (Midland, Cavalry, PRA, etc).  That's no guarantee Synchrony won't sue you themselves, and the fact you have 4 outstanding debts with them is admittedly a wildcard here.

I myself would lay low and just wait to see what happens.

[small-town-girl]

Yea, I agree.  Better not to stir a hornets nest.  It will be interesting to see how it unfolds.  I will keep posting with any updates.

[fisthardcheese]

They can't combine the accounts in arbitration. They may try, but the card agreement specifically says arbitration is to proceed on a single basis only and no joiners are allowed.  They do this to prevent class actions, but you can turn it around an prevent them combining accounts too and forcing them to pay for 4 separate arbitration cases should it come down to that.

With that said, I agree with @Harry Seaward that we rarely see Synchrony suing (I can't even recall a single case on this website where someone was sued by Synchrony themselves).  It is likely they will just bug you with daily calls and letters to try to collect for a certain period and then eventually sell them to a JDB.  I would lay low until they sell them off.  That Synchrony card agreement is a good one as it has JAMS and states you don't pay anything for it.  It is like a JDB repellent if they try to sue you.

[Harry Seaward]

2 hours ago, fisthardcheese said:

They can't combine the accounts in arbitration. They may try, but the card agreement specifically says arbitration is to proceed on a single basis only and no joiners are allowed.  They do this to prevent class actions, but you can turn it around an prevent them combining accounts too and forcing them to pay for 4 separate arbitration cases should it come down to that.

This is solely dependent on the language of the arbitration agreement, and interpretation thereof.  The current Synchrony agreement has this to say:

"YOU AGREE THAT ONLY ACCOUNTHOLDERS ON YOUR ACCOUNT MAY BE JOINED IN A SINGLE ARBITRATION WITH ANY CLAIM YOU HAVE."

There is nothing here expressly prohibiting a joinder of several claims into a single arbitration proceeding.  You could argue that "your account" implies "one account", but then I would expect Opposing to argue that sentence is only applicable to "any claim you have" and does not preclude them from joining several of your accounts into a single arbitration proceeding.  Because arbitration provisions are almost always viewed as adhesion contracts, I think a 'goosie gander' argument has a good shot at getting some traction, but I wouldn't say it's a slam dunk by any means.

(This happened to me on a couple Citi accounts several years ago.  In my case, "individual basis" was defined in the agreement as "non-class/non-representative" and the arbitrator found the agreement did not preclude Citi from arbitrating two accounts in a single arbitration proceeding.)

[small-town-girl]

6 hours ago, fisthardcheese said:

They can't combine the accounts in arbitration. They may try, but the card agreement specifically says arbitration is to proceed on a single basis only and no joiners are allowed.  They do this to prevent class actions, but you can turn it around an prevent them combining accounts too and forcing them to pay for 4 separate arbitration cases should it come down to that.

With that said, I agree with @Harry Seaward that we rarely see Synchrony suing (I can't even recall a single case on this website where someone was sued by Synchrony themselves).  It is likely they will just bug you with daily calls and letters to try to collect for a certain period and then eventually sell them to a JDB.  I would lay low until they sell them off.  That Synchrony card agreement is a good one as it has JAMS and states you don't pay anything for it.  It is like a JDB repellent if they try to sue you.

Thank you @fisthardcheese That is good to know!  I do have another question.  I have a credit monitoring service that I use to check my credit monthly.  Synchrony just charged off 2 of my accounts on 2/23/18 and then today I get an update on them that says in the consumer statement section “Profit and Loss Write Off”.  This hasn’t happened to my other two Synchrony accounts they just say collection/charge off. They charged off a month ago.  Does this mean they are going to cancel the debt on these 2 and issue a 1099C, or could they still potentially sell these?  

[BackFromTheDebt]

In most cases, you would want separate JAMS cases for each account, since that would cost them far more money.

There are always exceptions to every rule.  In one case, I had two Citi accounts.  One was big, one was small claims.  Both were with the same law firm,  After the judge ordered arbitration in the first case, I saw the same law firm had the second case. 

I set up a trap.  I combined the two accounts in my JAMS arbitration, and they wound up filing in small claims court after it was already in arbitration. 

I think I've been released from my NDA, but to make sure I can't tell you how that turned out.  Let's just say I am glad I combined the accounts.  

[small-town-girl]

@BackFromTheDebt Thank you for that info.  So, basically it really is just a strategy that you have to weigh the "what ifs" and stay on your toes at all times.  I am so glad that I found this sight!

[BackFromTheDebt]

Yup.

Basically, there are a variety of tactics.  You need to use the tactics that are best for YOU.

Some other things to consider -- do you have the time and energy to deal with multiple cases all at the same time?  Some people do, some don't.  

There was one time I was dealing with a lawsuit where I was the plaintiff, and an arbitration at the same time.  The stakes were much higher for the arbitration.  Of course, there were big deadlines for both cases at the same time.  I concentrated on getting the arbitration deadline first, and didn't do enough for the court case.  The arbitration went better for me than the court case.  Had I known then what I know now, I would've handled the court case much differently, or even not sued at all.  

 

So think about it.  If you had four arbs going on at the same time, would you be able to handle all the paperwork and updates and conferences for all four at the same time?  Some people can, and some can't.  

[Goody_Ouchless]

18 hours ago, small-town-girl said:

today I get an update on them that says in the consumer statement section “Profit and Loss Write Off”.

http://business.lovetoknow.com/profit-loss-write-off-credit-bureau-report

Looks like just a fancy term for charge off.

 

[small-town-girl]

@Goody_Ouchless  Thanks for the article!  Very informative.  I guess I was just hoping for a miracle, but should have known better. 

[Goody_Ouchless]

At this point I think you just wait and see what happens. Now that the accounts have been charged of, they will probably be sold. It used to take years before it got around to lawsuit stage, but we have seen some lately where an account goes from charge-off to sale to lawsuit in a matter of weeks.

Best thing is to learn all you can about how arbitration is addressed in your local statutes and rules of civil procedure. That way, if someone does sue, you won't make any mistakes.

 

[small-town-girl]

Ok.  I have been reading up on arbitration, but not in my local rules of civil procedure, so I will get started on that.  I was hoping to have at least a couple of years, so I could save up to hopefully settle.  But I can see how unpredictable it can be these days.  Just hope and pray I don't get served with company, or family around.    That would be humiliating.

[Goody_Ouchless]

Yea, it used to take years to work through all the data. Now it's like any other transaction - if they have your SSN, they can find out in two minutes whether you are worth suing. Rather than buying a ton of debts, hoping to find some good ones, portfolios can be now be purchased with all of the "junk" removed.

[Pericles]

I agree with the others.  Leave it alone for now.  It is better for you if the account is sold. Synchrony does sue (29 cases so far this year in my local county), but they much more often sell accounts.

The only potential benefit you could derive from engaging (other than paying/settling) with Synchrony now is that you are still within a reasonable period of time to file a dispute that could negate a future account stated claim.  But that dispute would probably need to have some level of specificity and it is not worth the risk of poking them into taking some sort of action.  And the benefit of negating a future account stated claim is negligible, given how you'd likely defend some future lawsuit.

[small-town-girl]

@Xerxes Thank you for that info.  That really puts things in perspective.  Yea, after hearing from others, I agree it is best just to leave it alone and deal with it, if and when it happens.  

[fisthardcheese]

13 hours ago, small-town-girl said:

Ok.  I have been reading up on arbitration, but not in my local rules of civil procedure, so I will get started on that.  I was hoping to have at least a couple of years, so I could save up to hopefully settle.  But I can see how unpredictable it can be these days.  Just hope and pray I don't get served with company, or family around.    That would be humiliating.

It's highly likely that you will be aware of a lawsuit or potential suit before you are served anyway.  Many places, like my state, have bankruptcy attorneys who have automated computer apps that scan the court systems daily and when new debt cases are filed, they send out solicitation letters.  These solicitations are usually many people's first indication they have been sued.  Also, when Synchrony sells the debt, a JDB will usually contact you at least once before suing, but more often than not they contact you several times and THEN they turn it over to a law firm to attempt to collect from you again before they file the suit.  So generally, you will have plenty of heads up.  If that time comes and you are concerned about how or where they try to serve you, you always have the option to contact the law firm and ask to arrange to meet their process server to accept service at a time and location convenient for you.

[small-town-girl]

@fisthardcheese Thank you!  That helps to know what to expect.  So basically, if I see it get to an attorneys office, I can pretty much guarantee I will be sued if I don't agree to settle?

[fisthardcheese]

16 minutes ago, small-town-girl said:

@fisthardcheese Thank you!  That helps to know what to expect.  So basically, if I see it get to an attorneys office, I can pretty much guarantee I will be sued if I don't agree to settle?

Essentially, yes.  And since you likely have a good amount of time before this happens, I would learn about arbitration and I would respond to the first attorney collection letter with the JAMS paperwork as I file my case against them.  Head them off before they sue and gain the first leverage on them.

[BackFromTheDebt]

Too add to what mr. cheese said earlier --

In SOME states, all of the court information can be found online.  Some sophisticated users can even set up RSS feeds to see if they have been sued, or if there has been any activity on their suit.  One time, a friend of mine who had the RSS feed sent me an email that I had just been sued. (This was after I had already filed in JAMS).

 

Also, there are SOME attorneys who also act as debt collectors.  This is very misleading, and sets them up for FDCPA charges, since an attorney is supposed to review the file before it is sent out, and most don't.  

 

If it isn't in an attorney's office yet, there are a few things you can do to prepare:

 

First, are there any violations?  Did they call you at work, or did they do something wrong with the letters, such as overshadowing?  Did they do ANYTHING wrong?  Some JDBs and CAs will violate like crazy, others not so much.  If you can find ANY violations at all, that gives you a lot of leverage with any JAMS case.  Have you seen the lists of creditors who always go to the bitter end in arbitration?  I got some of those to walk away with nothing because I kept track of their violations.  In one case the violations were serious enough to destroy their case, and I came away with some money.  I can't go into the details, can't mention which creditor or what they did.  

Second, have a plan of attack ready.  

Here is one way to do this:  When you hear from the attorney, send out the DV letter.  You can wait weeks, but certainly get it out before the 30 days are up.  My own twist was to mention I wanted arbitration in that letter.  Some disagree with this, but this can sometimes force them to reveal their strategy, and in some cases it can get them to commit violations.  Weird things can happen.  I had some attorneys decide to drop the case at that point.  Another attorney, same card, left the law firm and put the file in a drawer, and they finally found the file about 6 months before SOL.  So you never know what will happen.  

Then, when they are preparing the stuff for verification, you can write up all the forms you need for JAMS.  

 

When you get their validation, that usually means they expect to hear from you very soon, or else they will sue.  That is often a good time to file in JAMS.  

[BackFromTheDebt]

I forgot to mention:  when you hear from the attorney, make sure they are actually licensed to practice law in your state.  

Sometimes they are not.  

[small-town-girl]

@BackFromTheDebt @fisthardcheese  Thank you for this helpful advice.  This gives me an idea of where to start.    Would I send them my JAMS paperwork, or just let them know that I have filed a case with JAMS?  And if I file my case before they sue, can they still try to sue, or would their case be dismissed by a court if I show the court I have already filed a case with JAMS?

[BackFromTheDebt]

1 hour ago, small-town-girl said:

@BackFromTheDebt @fisthardcheese  Thank you for this helpful advice.  This gives me an idea of where to start.    Would I send them my JAMS paperwork, or just let them know that I have filed a case with JAMS?  And if I file my case before they sue, can they still try to sue, or would their case be dismissed by a court if I show the court I have already filed a case with JAMS?

I once had a case where I filed in JAMS before they filed suit, and they filed anyway.  

Not good for them.  

I pointed it out to the law firm right away, and they had the case dismissed without prejudice immediately (*).  As in, they knew they had committed a violation of the FDCPA, but taking an action they are not permitted to take.  That got me enough leverage to convince them to agree to a mutual walkaway -- they drop their case against me, I dropped my case against them, case is dismissed with prejudice.  

(*) In my state, they can drop a case without prejudice if they do so before I answer.  

What would've happened if they had refused to withdraw the case?  They didn't want to find out.  Smart of them.