williams4

Being sued Unifund

Recommended Posts

I am being sued by Unifund, have not been served papers yet.  They are suing me for a $22,000 charge off from a Citibank card.  I went to check my credit report and Citibank charge off ($22,000) and Unifund collections ($22,000) have both been removed.  I know just because it's not on my credit report doesn't mean they can't sue, but I can't help but wonder why both were removed from my credit report (account was charged off in January 2017).  Unifund "says" last payment or activity was as late as 6/26/16 (no proof). Only proof of debt is a statement dated January 2017 with balance (doesn't show any activity).  I did see Citi was forced to pay back consumers in 2018 for overcharging interest.  Could this be why Citi removed the charge off from my credit? Can I ask Unifund for a breakdown of all charges and payments because I don't feel the the total amount owed is correct?  The card was opened in 2008, does Unifund have to show some activity to prove the account has not reached statute of limitation? Like I said, the only proof of debt they provided was a statement from January 2017 showing balance, but no activty (payments, me charging anything).

Share this post


Link to post
Share on other sites
56 minutes ago, williams4 said:

the only proof of debt they provided was a statement from January 2017 showing balance, but no activty 

The have to pay for records, so they send just the one for now hoping you don't fight it. If they end up in court, they will get what they need.

Citi has a decent arbitration clause. For a debt this size, there's a remote possibility Unifund will follow you into arbitration, but we've seen then walk away from a $30k debt in the past. In any event, it's your only real shot at 'beating' them. 

https://www.creditinfocenter.com/community/topic/329436-arbitration-overview-and-strategy-2018-most-up-to-date-info/

 

Share this post


Link to post
Share on other sites

If I ask them for proof of last payment or activity on the account, will they have to prove that before we go to court?  This is kind of a last ditch effort type thing.  Hoping if I request info they can't provide it would help.  If not, we are going to have to file bankruptcy.  So I thought it would be worth at least a little fight? Or maybe not?

Share this post


Link to post
Share on other sites

Sorry, I just reread the thing about arbitration.  I am not very familiar with arbitration.  I misread it the first time.  So I can't argue and request arbitration, correct? I just have to answer with just arbitration? So if I request arbitration, I am admitting to the debt, the amount and that Unifund owns the debt? Or is that something that can be brought up in arbitration?

Share this post


Link to post
Share on other sites

Since I have not been served the papers yet, would it help my case to go ahead and start the arbitration case now and put that in the answer to the lawsuit for Motion to compel arbitration along with the credit card agreement or does starting the arbitration case before it goes to court make a difference?

Share this post


Link to post
Share on other sites
6 hours ago, williams4 said:

If I ask them for proof of last payment or activity on the account, will they have to prove that before we go to court? 

No.

6 hours ago, williams4 said:

Hoping if I request info they can't provide it would help.

It's almost certain they will be able to get what they need to win the lawsuit. 

6 hours ago, williams4 said:

So I can't argue and request arbitration, correct? I just have to answer with just arbitration?

Best way to do it is to file an answer after you are served, deny everything but your name and address and then include an affirmative defense in the answer that the court lacks subject matter jurisdiction because the claims are subject to the private contractual arbitration clause from the original agreement. Then file a separate motion to compel arbitration. Attach to that a copy of the agreement and an affidavit swearing under oath (you have to get it notarized) that the agreement is the correct one for your account. Then you just wait for the court to do whatever it's going to do. It wouldn't be a bad idea to go ahead and open the arbitration case with AAA at that point.   It will cost you $200, but will head off any "he's not serious about taking this case to arbitration" claims from Unifund.

I recommend AAA because their rules expressly prohibit the arbitrator from reallocating Citi's arb fees back to you. This makes going to arbitration that much more unattractive for them. 

6 hours ago, williams4 said:

So if I request arbitration, I am admitting to the debt, the amount and that Unifund owns the debt? 

Not exactly, no and no. All you're admitting to is at some time you had an account with Citi that was governed by that agreement. Unifund is claiming they now own the debt, which now subjects them to the terms of agreement. 

5 hours ago, williams4 said:

would it help my case to go ahead and start the arbitration case now

By all means, do NOT try to start arbitration until after you are served. It's a little different since you have been sued, but some defendants tried to launch a preemptive arbitration attack and it created a much bigger mess. So just wait to get served and then follow the process I gave you. 

 

Share this post


Link to post
Share on other sites
13 hours ago, Harry Seaward said:

No.

It's almost certain they will be able to get what they need to win the lawsuit. 

Best way to do it is to file an answer after you are served, deny everything but your name and address and then include an affirmative defense in the answer that the court lacks subject matter jurisdiction because the claims are subject to the private contractual arbitration clause from the original agreement. Then file a separate motion to compel arbitration. Attach to that a copy of the agreement and an affidavit swearing under oath (you have to get it notarized) that the agreement is the correct one for your account. Then you just wait for the court to do whatever it's going to do. It wouldn't be a bad idea to go ahead and open the arbitration case with AAA at that point.   It will cost you $200, but will head off any "he's not serious about taking this case to arbitration" claims from Unifund.

I recommend AAA because their rules expressly prohibit the arbitrator from reallocating Citi's arb fees back to you. This makes going to arbitration that much more unattractive for them. 

Not exactly, no and no. All you're admitting to is at some time you had an account with Citi that was governed by that agreement. Unifund is claiming they now own the debt, which now subjects them to the terms of agreement. 

By all means, do NOT try to start arbitration until after you are served. It's a little different since you have been sued, but some defendants tried to launch a preemptive arbitration attack and it created a much bigger mess. So just wait to get served and then follow the process I gave you. 

 

Thank you so much for all your help! I truly appreciate it! I read further into the citi agreement for the card I have and it does say they use AAA.  So once the papers are served I will be opening a case with them.  Thanks again for clearing up all the confusion I had!

Share this post


Link to post
Share on other sites
6 hours ago, williams4 said:

So once the papers are served I will be opening a case with them. 

Be sure you do the other stuff too. Answer,  MTC with affidavit, etc. 

  • Like 1

Share this post


Link to post
Share on other sites
On 8/24/2018 at 1:47 PM, Harry Seaward said:

Be sure you do the other stuff too. Answer,  MTC with affidavit, etc. 

I was served the papers and have my MTC all put together but I am stumped on how to answer the lawsuit.  Do I want to deny anything I am in question about? The counts are as follows:

Count 1 Breach of contract

Count 2 Account stated

Count 3 Promissory Estoppel

Count 4 Unjust Enrichment

Do I just deny everything and state I filed a MTC or how would you answer the "answer" part of the lawsuit?

 

Share this post


Link to post
Share on other sites

Did they write paragraphs about what they claim you did? 

1. Defendant opened a credit card with ABC bank, incurred charges in the amount of $1234.56 and has refused to repay these charges. 

2. Plaintiff has purchased the rights to collect the outstanding amount. 

Something like that? If so, your answer should be

1. Defendant denies the allegations in paragraph #1 of plaintiff's complaint. 

2. Defendant denies the allegations in paragraph #2 of plaintiff's complaint. 

Do that for each paragraph.  The only thing you should admit is your name and address. 

Share this post


Link to post
Share on other sites

Yes, there are 31 numbered items.  They have Background and Parties and have 1-8 listed under it then Count one breach of contract with 9-13 and so forth.  So I need to answer each individual numbered item, correct?

Share this post


Link to post
Share on other sites

I would. You can also use "defendant lacks knowledge and information sufficient to admit the claims from paragraph 5 and therefore denies same." Like this is a good one when they claim they are a corporation in such and such city, etc. 

Share this post


Link to post
Share on other sites

Quick question.  I found this for CFPB's consent order on debt sales for Citi back on 2/23/16.  Line 56 states:

56. All Debt Sale contracts and agreements Respondent enters into after the
Effective Date must:
a. Prohibit the Debt Buyer from collecting post-sale interest on any Account
in the Debt Sale, unless authorized by court;
b. Prohibit the Debt Buyer from reselling any Account included in the Debt
Sale, except to the extent Respondent is repurchasing an Account; and
c. Require the Debt Buyer to provide to Consumers the name of the original
creditor in the written notice required by 15 U.S.C. § 1692g(a).

Does this mean when Citi sells a debt to a debt buyer, the agreement needs to prohibit that debt buyer from reselling it? Or am I looking at this wrong?

Share this post


Link to post
Share on other sites
On 8/23/2018 at 5:18 PM, Harry Seaward said:

I recommend AAA because their rules expressly prohibit the arbitrator from reallocating Citi's arb fees back to you. This makes going to arbitration that much more unattractive for them. 

I recently had a discussion with an attorney about filing a consumer case with AAA that doesn't involve finance/debt.  I told him I was under the impression an AAA arbitrator couldn't award the other party attorneys' fees and costs if I lost.  He quickly corrected me.

AAA's Consumer Arbitration Rules, R-44(a) say "The arbitrator may grant any remedy, relief, or outcome that the parties could have received in court, including awards of attorney's fees and costs, in accordance with the law(s) that applies to the case."  In addition, pursuant to R-44(c) "The arbitrator may also allocate compensation, expenses and defined in sections (v) and (vii) of the Costs of Arbitration section, and administrative fees (which include Filing and Hearing Fees) to any party under the arbitrator's determination that the party's claim or counterclaim was filed for purposes of harassment or is patently frivolous."

As we've seen in other cases that have popped up on this board, OCs and JDBs have attempted to recoup fees based on their assertion that a consumer's claim was frivolous.

An arbitration agreement itself could specify whether or not an arbitrator has the authority to award fees and costs.

Link to AAA Consumer Arbitration Rules:  https://www.adr.org/sites/default/files/Consumer Rules.pdf

Share this post


Link to post
Share on other sites
51 minutes ago, williams4 said:

Quick question.  I found this for CFPB's consent order on debt sales for Citi back on 2/23/16.  Line 56 states:

56. All Debt Sale contracts and agreements Respondent enters into after the
Effective Date must:
a. Prohibit the Debt Buyer from collecting post-sale interest on any Account
in the Debt Sale, unless authorized by court;
b. Prohibit the Debt Buyer from reselling any Account included in the Debt
Sale, except to the extent Respondent is repurchasing an Account; and
c. Require the Debt Buyer to provide to Consumers the name of the original
creditor in the written notice required by 15 U.S.C. § 1692g(a).

Does this mean when Citi sells a debt to a debt buyer, the agreement needs to prohibit that debt buyer from reselling it? Or am I looking at this wrong?

That's what it appears to say.   How does that affect you?

Share this post


Link to post
Share on other sites
28 minutes ago, LaneBlane said:

As we've seen in other cases that have popped up on this board, OCs and JDBs have attempted to recoup fees based on their assertion that a consumer's claim was frivolous.

Yes, the key phrase there is "consumer's claim". If the consumer is simply arbitrating the JBD's claim, there is no "consumer claim" to find frivolous. This is the sole reason why I'm fundamentally opposed to a consumer creating an arb claim in response to being sued. 

Share this post


Link to post
Share on other sites
6 minutes ago, Harry Seaward said:

Yes, the key phrase there is "consumer's claim". If the consumer is simply arbitrating the JBD's claim, there is no "consumer claim" to find frivolous. This is the sole reason why I'm fundamentally opposed to a consumer creating an arb claim in response to being sued. 

I can definitely see the benefits of a consumer avoiding being the party who actually files the claim.

Even if an OC or JDB filed the claim, R-44(a) would still leave a consumer vulnerable.  "The arbitrator may grant any remedy, relief, or outcome that the parties could have received in court, including awards of attorney's fees and costs, in accordance with the law(s) that applies to the case." 

Share this post


Link to post
Share on other sites
9 hours ago, BV80 said:

That's what it appears to say.   How does that affect you?

The bill of sale they sent shows it was sold twice.

 

9 hours ago, Harry Seaward said:

Yes, the key phrase there is "consumer's claim". If the consumer is simply arbitrating the JBD's claim, there is no "consumer claim" to find frivolous. This is the sole reason why I'm fundamentally opposed to a consumer creating an arb claim in response to being sued. 

My main focus is still MTC and I am not mentioning anything about this with the court.  I was thinking if they follow me into arbitration, if this would be something to bring up?

Share this post


Link to post
Share on other sites
9 hours ago, Harry Seaward said:

Yes, the key phrase there is "consumer's claim". If the consumer is simply arbitrating the JBD's claim, there is no "consumer claim" to find frivolous. This is the sole reason why I'm fundamentally opposed to a consumer creating an arb claim in response to being sued. 

I haven't physically mailed the application yet for AAA, but I have it typed up and was going to send it today.  I have the complaint listed "Federal and state consumer debt collection law violations."  Should I change the complaint to something else to avoid "customer claim" being frivolous?

Share this post


Link to post
Share on other sites

Or would it make more sense for the complaint on the AAA paperwork be directed to the "sale of bill" since the consent order from CFPB's order was violated?

Share this post


Link to post
Share on other sites
10 hours ago, LaneBlane said:

Even if an OC or JDB filed the claim, R-44(a) would still leave a consumer vulnerable. 

But not for the arb fees, which are the primary deterrent effect of arbitration. 

Years ago JDBs would fold at the first sign of resistance because they knew they would be facing attorney's fees of $10,000+ on a $500 debt. In the last 5 years or so, they have started using capped fee agreements with their attorneys which limits their legal fees to $750-$1,500 in contested cases.  This is the sole reason JDBs forge ahead in court now.  According to the rule you cited, if the consumer's exposure is limited to $750 (a common figure found in the capped fee agreements) in attorneys' fees in court, they have that same exposure in arb. No one ever said arb gives a consumer a better forum in which to argue the merits of the case. If the outcome is equal to that in court (including attorneys fees, per the AAA rules), there is no additional risk to a consumer using arb. 

Share this post


Link to post
Share on other sites
3 hours ago, Harry Seaward said:

Years ago JDBs would fold at the first sign of resistance because they knew they would be facing attorney's fees of $10,000+ on a $500 debt. In the last 5 years or so, they have started using capped fee agreements with their attorneys which limits their legal fees to $750-$1,500 in contested cases.  This is the sole reason JDBs forge ahead in court now.  According to the rule you cited, if the consumer's exposure is limited to $750 (a common figure found in the capped fee agreements) in attorneys' fees in court, they have that same exposure in arb. No one ever said arb gives a consumer a better forum in which to argue the merits of the case. If the outcome is equal to that in court (including attorneys fees, per the AAA rules), there is no additional risk to a consumer using arb. 

Thanks for clarifying this, Harry.  I do see how R-44(a) is for "attorneys' fees and costs" and R-44(c) specifically mentions the costs and fees of arbitration.

Share this post


Link to post
Share on other sites
10 hours ago, williams4 said:

Or would it make more sense for the complaint on the AAA paperwork be directed to the "sale of bill" since the consent order from CFPB's order was violated?

You don’t have a claim for a violation of the CFPB order. 

Share this post


Link to post
Share on other sites
1 hour ago, BV80 said:

You don’t have a claim for a violation of the CFPB order. 

I now see how this wouldn't be a violation of the CFPB order.  Once it (hopefully) gets to arbitration, should I have them verify that they own the debt in more details? Like have them provide a copy of  the terms of the "bill of sale" since it should state the first debt buyer can't resell? So if it does state this, then what? Would I still owe 2nd debt buyer since the first debt buyer wasn't suppose to sell it?  Or does this even matter?

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.