Right to Cure received from OC; send DV to Law Firm?

[Dr Crandall]

My friend who this post has been helping on another issues with a JDB has now received a Right to Cure from Gurstel Law Firm for an alleged c.c. account from Discover which was dated 11/14/2018 and received 11/16/2018.  Right to Cure deadline date is 1/3/2019.  It also gives 30 days after receipt of this Right to Cure to request verification of this debt. (deadline around 12/15/2018).  The amount of the alleged debt is $5,707.45.  This will end up in State District Court if petition is filed as $5,000.00 is maximum for small claims court.

We would like to call Discover customer service right away on Monday to see if we may be able to get 12 or 13 months of complete statements on alleged account to verify account and if it's his account we would like to get the last date a charge was placed on that card to properly figure SOL.  According to the 3 credit bureaus this alleged account has a 1st delinquency date of 8/2014 and a charge-off date of 2/2015.

If Discover doesn't provide us with statements or if they say they will send us statements which haven't arrived in a reasonable amount of time in the mail, we would then send the law firm pre-emptive filing via a DV request on or about 12/14/2018 stating the alleged account isn't ours, that we would like to elect private contractual arbitration in JAMS as Discover gives him a choice of arbitrators and request that Discover pay the initial $250 fee as outlined in their 2014 C.C. Agreement.

We are doing this knowing there is a good chance that since this is a pre-emptive, pre-suit request for arbitration that we probably won't get an answer to our request for DV.  This will however delay collection efforts.  We will not be providing a c.c. agreement for 2014 as they should know what to use and we don't want to tip our hand anymore than necessary. 

      Questions regarding above are:

Would this prevent Discover from suing my friend until we get some kind of response, if any, from DV request of law firm?

Should we include filled out JAMS paperwork that we haven't filed yet?

Would it be a better choice to initiate arbitration and get a JAMS number, instead of just electing arbitration?

Should the written request for Discover paying our JAMS fee be on a separate page or included in the body of the DV letter?

If Discover ignores DV request for election of arbitration and JAMS closes file after 30-60 days can Discover file petition at that time then? 

If Discover is able to file a petition at that time can we do a MTC arbitration stating we tried to use JAMS per their c.c. agreement but they didn't respond, or do we go Federal Court to file at that time?   

Governing law in pricing schedule for Discover c.c. agreement is Federal and DE.  In main agreement on same 2014 agreement it states Federal and DE, along with state being sued in regarding SOL issues.  Should they be able to pick and choose when they can use governing law?

 

[BV80]

@Dr Crandall

The FDCPA’s verification requirements do not apply directly to Discover.  However, it does apply to the law firm.  If you want validation, you must DV the law firm.  There’s no way of knowing what will be sent as validation, but 12 months of statements are not required.   Also note that the law firm must validate only if it chooses to continue collection efforts.   It can also take as long as it chooses to validate.  It simply cannot continue collection efforts until it does so.

Discover will arbitrate.  

[Dr Crandall]

So could the law firm ignore  our DV and start a suit after Jan 1, 2019 deadline passes as noted on Right to Cure, even though we elected or initiated arbitration?

Should JAMS paperwork be attached to DV? 

[BV80]

Just now, Dr Crandall said:

So could the law firm ignore  our DV and start a suit after Jan 1, 2019 deadline passes as noted on Right to Cure, even though we elected or initiated arbitration?

Should JAMS paperwork be attached to DV? 

No, the law firm cannot ignore the DV. 

Why do you want to arbitrate knowing that Discover will follow through?

@fisthardcheese

[Dr Crandall]

Because he's basicly judgment proof but wants to see proof of this alleged account without being sued and SOL might come into play with further delays if account is legit.  Discover would be paying for arbitration fee and could easily add onto that amount, and for a debt this size perhaps they will be willing to negotiate an amount both parties can live with if it's a legit debt.  Violations against Law firm might come up also.   

[fisthardcheese]

Discover will not ignore the arbitration demand.  They will accept it and file a counter claim for the alleged debt.  You will then be stuck in arbitration because once they respond and file a counter claim you cant just withdraw from it on your own.  If you don't show up, just like in court, they will get a default win against you.  Then you will have effectively just sued yourself for no reason.

Arbitration with an OC should ONLY be used in defense of a law suit, or if there is no underlying debt (such as with FCRA violations as I have done in the past, but with no debt they could counter claim with).

[BV80]

1 hour ago, Dr Crandall said:

Because he's basicly judgment proof but wants to see proof of this alleged account without being sued and SOL might come into play with further delays if account is legit.  Discover would be paying for arbitration fee and could easily add onto that amount, and for a debt this size perhaps they will be willing to negotiate an amount both parties can live with if it's a legit debt.  Violations against Law firm might come up also.   

What do you mean “basically judgment proof”.  What about 10 years from now?

[Clydesmom]

4 hours ago, Dr Crandall said:

Would this prevent Discover from suing my friend until we get some kind of response, if any, from DV request of law firm?

NO.  They can simply hire another firm.

4 hours ago, Dr Crandall said:

Should we include filled out JAMS paperwork that we haven't filed yet?

Would it be a better choice to initiate arbitration and get a JAMS number, instead of just electing arbitration?

Should the written request for Discover paying our JAMS fee be on a separate page or included in the body of the DV letter?

If Discover ignores DV request for election of arbitration and JAMS closes file after 30-60 days can Discover file petition at that time then?

NONE of this will matter.  Discover WILL arbitrate including frivolous appeals.

1 hour ago, Dr Crandall said:

Because he's basicly judgment proof

He may be COLLECTION proof right now but that doesn't mean it will be permanent. Many judgments are good for 10-20 years and can be renewed.  Eventually if he needs or wants credit again he will have to deal with them and the judgments will have accrued years of post judgment interest grossly inflating their balance.

1 hour ago, Dr Crandall said:

but wants to see proof of this alleged account without being sued

Until they sue or go to arbitration they are not required to send him one shred of proof.  

1 hour ago, Dr Crandall said:

SOL might come into play with further delays if account is legit.

If the DOFD is August 2014 then they have at least a year left to sue him.  Once they file that suit the SOL is tolled.  You will NOT be able to delay Discover long enough with these shenanigans.  They are the #2 aggressive OC in pursuing their defaulted accounts.

1 hour ago, Dr Crandall said:

Discover would be paying for arbitration fee and could easily add onto that amount, and for a debt this size perhaps they will be willing to negotiate an amount both parties can live with if it's a legit debt.

Discover doesn't care about the fees.  We have seen this too many times.  He will have a couple of windows to settle but if he is unrealistic he will just tick off Discover who will drag him through HE!! just to do it.

1 hour ago, Dr Crandall said:

Violations against Law firm might come up also

No they won't. What Discover will do is fire the firm forcing him to file a separate federal case against them for any alleged violations.  They will use their back up firm and simply proceed in tearing him apart including refusing to settle after trying the FDCPA card against them when those laws don't apply to them.

[Dr Crandall]

3 hours ago, BV80 said:

What do you mean “basically judgment proof”.  What about 10 years from now?

I suppose no one is really judgment proof if they can win the lottery.  He is judgment proof now which in itself and of itself is a good defense for possible settlement, but the real point to his efforts is he is trying to prevent a judgment by a creditor who is hoping he won't fight the alleged debt. If he gets a judgment at least he will know he fought against them.  He'll be 70 years old at that time so he probably still won't have property.   

[BV80]

2 minutes ago, Dr Crandall said:

I suppose no one is really judgment proof if they can win the lottery.  He is judgment proof now which in itself and of itself is a good defense for possible settlement, but the real point to his efforts is he is trying to prevent a judgment by a creditor who is hoping he won't fight the alleged debt. If he gets a judgment at least he will know he fought against them.  He'll be 70 years old at that time so he probably still won't have property.   

I’m not sure about how amenable Discover would be to a favorable settlement if they have to shell out arbitration fees.  

In any case, they would win a judgment in arbitration.  

[Dr Crandall]

I just came across some information regarding how if OC wins an arbitration case against alleged debtor that the OC will get an arbitration award which can't be attached vs. a judgment in a civil suit which would attach to wages garnished, seizure of bank assets or property.  It was mentioned that the OC may get the award turned into a judgment but didn't say how.

Does anyone have any insight into this? 

[fisthardcheese]

5 hours ago, Dr Crandall said:

I just came across some information regarding how if OC wins an arbitration case against alleged debtor that the OC will get an arbitration award which can't be attached vs. a judgment in a civil suit which would attach to wages garnished, seizure of bank assets or property.  It was mentioned that the OC may get the award turned into a judgment but didn't say how.

Does anyone have any insight into this? 

They absolutely will.  They will take the arbitration award to federal court and ask a judge to issue an order enforcing the award, which the judge will.  While you have the opportunity to oppose this, the arguments and case law is very weak.  Your only argument essentially would have to be that the arbitrator was biased or unfair and show that he was not acting partially during the process. It is difficult to prove, even if it was true.  The judge will likely grant judgement to enforce the arbitration award and then add those extra court costs on top of it too.

Going to arbitration with an OC, especially Discover or Amex, is only suggested here as a defense for being sued to give someone the opportunity to work out a settlement agreement and buy a little more time to save up money for that settlement.  It is only used as a way to attempt to stall or soften what is essentially an already forgone conclusion of a judgement

If you want to avoid a judgement, you only option as of now, prior to being sued, is to set up a settlement or payment plan with them.

[rfrielly]

My opinion is to try to settle this account or set up a payment plan. If you set up a payment plan and default then they can drag you back into court for a JUDGEMENT as you spoke of above. Good luck with this matter.

[Dr Crandall]

Just to see if we could circumvent the law firm who sent the right to cure for documents, we called Discover's  Collection Dept. where we went through 2 collection representatives who were adamant we needed to contact the law firm for further help.  the last rep. after much pandering and pestering on my part mentioned that perhaps the internal fraud department for Discover might be able to help.  So we said Giddyup and they transferred us over to fraud dept.  She couldn't have been more helpful!  We asked for the complete credit card statements for the last year to confirm if we recognize any charges  (I wished I would have asked for more now) that showed up in any of those statements.  While we had her on the phone we asked if she could go over the last 6 months and she did mention a couple of charges and the dates they occurred.  We also asked for the last updated credit card agreement received at the time of default so she said they would have records send that also.  I don't know if we will actually get any of this in the mail but I don't think the law firm was alerted to our request and we might get discovery that we would have had to request upon discovery after suit was filed.

On another issue, I noticed on the credit bureau that the Discover tradeline had different balances in $500 increments after charge-off that I never noticed before.  In an 8 month period commencing with the first balance showing in payment history dated 8/2015 to 3/2016 (charge-off was 3/2015), the amount went from $6,707, $6,207, $5,707, $5,207, $4,707, back up to $5,207, stayed $5,207 and then finally back to $5,707 from 4/2016 to present as it keeps updating.  Since law firm balance showing as owed is $5,707 wouldn't that be an FDCPA violation as law firm is collector.  Also, in Iowa IDCPA allows for violations against OC's.  I can't believe I didn't catch this before.  Anyone have a similar experience for payment history for an OC showing this after payments ceased on alleged account and charge-off had already occurred? 

Since the amount they are trying to recoup is $5,707.00, it qualifies as not being small claims which is $5,000 and arbitratable, if that is a word and between filing fees in court, Discover paying his arbitration fee of $250,  whatever bill they end up with arbitration costs, cost of their lawyers defending suit if no MTC is granted and a violation of IDCPA and FDCPA for both Discover and law firm,  I would think if we don't get too cocky and maybe even let them know how this would play out (after we receive back the information from our timely DV request) perhaps a settlement could be reached for a walkaway with tradelines showing paid as agreed or deleted and no 1099-C. 

[BV80]

@Dr Crandall

If the amount the law firm is claiming is owed is the amount provided to it by Discover, there is no FDCPA violation.  

Does the IDCPA provide for statutory damages?

Discover is not concerned about the cost it incurs.  It has the money AND the costs of litigation can be tax deductible. 

Just a note:  You cannot do the work for your friend.  If it is discovered that a non-attorney other than him wrote his pleadings, answer, etc., you could be charged with practicing law without a license.  He will have to learn and be prepared to speak in court.  He will need to understand every that’s been filed in his name.  Can he do that?

[Clydesmom]

46 minutes ago, Dr Crandall said:

We asked for the complete credit card statements for the last year to confirm if we recognize any charges  (I wished I would have asked for more now) that showed up in any of those statements.  While we had her on the phone we asked if she could go over the last 6 months and she did mention a couple of charges and the dates they occurred.

Unfortunately it won't matter.  A consumer only has 6 months to dispute charges as inaccurate or fraudulent.  Once that time elapses the charges are valid.  Unless he is claiming the entire account is fraudulently opened in his name by someone else it is too late to dispute the charges.

47 minutes ago, Dr Crandall said:

Anyone have a similar experience for payment history for an OC showing this after payments ceased on alleged account and charge-off had already occurred? 

The credit reports are hearsay and will not be allowed by you or Discover as evidence.

48 minutes ago, Dr Crandall said:

I would think if we don't get too cocky and maybe even let them know how this would play out (after we receive back the information from our timely DV request) perhaps a settlement could be reached for a walkaway with tradelines showing paid as agreed or deleted and no 1099-C. 

You could not be more wrong.  First Discover is never going to walk away agreeing to no money in a settlement.  They will not update a defaulted account to "paid as agreed" or delete (they have a hard line stance against both).  The 1099-c I don't know their stance on.  We have told you this repeatedly and you keep asking the same questions each time hoping to hear something different.

50 minutes ago, Dr Crandall said:

Also, in Iowa IDCPA allows for violations against OC's.

Unless the amount of any award exceeds the amount you owe Discover they will NOT care.  Again, if by some slim chance there is an FDCPA violation against the firm they will dismiss them and get another one forcing you to pursue an FDCPA claim in Federal Court separate from their debt issue with you.  As for state violations, unless the amount a court might award you exceeds the debt Discover will proceed and simply deduct any amount you are awarded from the debt.  

53 minutes ago, Dr Crandall said:

I can't believe I didn't catch this before. 

This is the major problem.  You do not know the law(s).  You are practicing without a license as @BV80 said and you are leading this poor senior citizen to disaster.  If you care for this person at all help him get a good consumer attorney.  You could not be making a bigger mess of this if you intended to.

[Dr Crandall]

OK

[BV80]

@Dr Crandall

Please break up your posts with paragraphs.   My request may seem picky, but it makes it easier to discern and address issues  

 

45 minutes ago, Dr Crandall said:

In the end if he can't settle for an amount he is comfortable with, he will probably at the most do a simple answer as he is googling examples to let them know it won't be a slam dunk judgment and try one last time for a settlement and he might even do bankruptcy.  

Depending upon his circumstances and state law, bankruptcy may be a good choice.  He should speak to a bankruptcy attorney ASAP.

 If I’m not mistaken, you wrote that in the future, he will not own any property. If that is the case, he should consult a bankruptcy attorney.

Perhaps his only major purchase in the future will be a vehicle. A few years from now, a bankruptcy filing may not affect his ability to get reasonable financing for a vehicle.  Bankruptcy would allow,him to avoid fighting lawsuits.

We are not doubting your abilities or your purpose for helping your friend.   We simply want you to have as much information as possible.

[Clydesmom]

10 hours ago, Dr Crandall said:

We wanted to know what charges were on them.  There is varying opinions as to if SOL starts at last payment or last charge so we want to be prepared for both.

It is WAY too late for that.  Not court opinions.  The SOL started running with the last payment he made not the last charge he made.  Again, you need to get him a lawyer.

10 hours ago, Dr Crandall said:

he will probably at the most do a simple answer as he is googling examples to let them know it won't be a slam dunk judgment

He can do a complicated answer.  It doesn't matter.  Discover won't be put off by his answer and an OC suit IS a slam dunk judgment.  Unless there is identity fraud or the SOL is expired there is no defense.  Keep in mind that should he tick off Discover they are known for digging in and refusing to settle.  

Again, if you care about this person get him a lawyer.  You don't want to listen when you are pointed in the wrong direction and unless you have a power of attorney you have no legal authority to aid him in getting a settlement either.  

[Dr Crandall]

*

[Dr Crandall]

 Upon reflection of receiving Notice of Right to Cure on 11/16/2018 and weighing in on what has been advised above, my friend realizes it is in his best interest to settle this account.  In the 4 and 1/2 years since last payment received he has not received any kind of settlement offer from Discover Bank for the $5,700 balance allegedly owed.  This seems to be how Discover plays the game  from what we are seeing on different forum's. 

  Since he received the Notice of Right to Cure, he is going to send a DV disputing the debt.  We have already phoned in last week to Discover's customer service fraud dept. and requested the proof showing the fluctuating amounts in $500 increments described in a post above to see what that is all about and they were also to send a c.c. agreement in force at time of default.  If we get those that would be great, but if not we want to request at least the balance info. in the DV letter.  These amounts that are varying are months after charge-off date shown on credit bureaus.  Since we are requesting from debt collector law firm they will hopefully respond with something.

   If they just respond with the last c.c. statement per DV request and no settlement offerr, then he will phone law firm to see if they will settle.

     So he will be sending off 1 c.m.r.r. letters to Discover's law firm:

 A)  DV denying debt, requesting proof of how final balance was figured in lieu of the fluctuating $500 increments. Will send 12/14/2018.

 B)  Hopefully, a settlement offer may be volunteered by the law firm, or if no settlement offer is mailed to him, he would like no later than 12/28/2019 get on the phone with law firm and talk about settlement options.  Don't want to do this through the mail just to be cautious about SOL restart issues which aren't an issue in Iowa, but just good practice not stepping on land mines.

 C)   If no settlement, call on 12/28/2018 to all 3 credit bureaus and dispute payment history notations showing $500 increment changes in balance owed.  Have had success with bureaus providing results of investigation and copy of updated credit bureau in the mail following investigation.

  Hopefully Discover fraud dept. would have at this point provided him with a c.c. agreement at time of default as they said they were going to send him.  Then he can provide at trial or arbitration hearing an affidavit stating he received this c.c. agreement from Discover along with the c.c. agreement , Therefore, they can't use their own c.c. agreement against my friend. Should help if this moves into state district court. His goal is to hope Discover will settle for 40% which he would have available 1/31/2019.

All of this done pre-petition so there is still the chance they will settle.  

_____________________________________________________________________________________________________________________________________________________________________________

2 Questions:

    1)  Since Discover is paying for arbitration fees, which is a better arb forum for an OC; JAMS or AAA?   Leaning toward JAMS because of their more extensive fee schedule which would add costs to Discover Arb defense.   AAA rules expressly prohibit the arbitrator from reallocating the JDBs fees back to you making it that much more unattractive for the JDB to follow you into arbitration.   On the other hand, Fisthardcheese states that AAA rules expressly prohibit the arbitrator from reallocating the JDBs fees back to you making it that much more unattractive for the JDB to follow you into arbitration.  Does AAA prohibit AAA from reallocating the OC's fees back to my friend?

    I have disputed with credit bureaus over the telephone and they always provided me with the results and a copy of the credit report through the mail afterwards.  Even though it's always a good idea to do the paper trail through snail mail way.   

    2)  If his phoned in credit bureau disputes  were received in the mail, wouldn't that still be prima facie evidence to be used in arbitration or civil trial to dispute fluctuating balance increments in payment history notations ?

   

[BV80]

In regard to the credit report, the fluctuating balances are not s problem as long as the current balance shown is correct. 

In order for your friend to benefit from the FCRA, he must prove the balance is incorrect. Then he must either show actual damages or that Discover willingly and knowingly verified incorrect information. 

[Dr Crandall]

58 minutes ago, BV80 said:

In regard to the credit report, the fluctuating balances are not s problem as long as the current balance shown is correct. 

In order for your friend to benefit from the FCRA, he must prove the balance is incorrect. Then he must either show actual damages or that Discover willingly and knowingly verified incorrect information. 

OK.  Since one of the balances was exactly $1,000.00 cheaper if he could get an accounting of that pre-suit, he could use that lower figure for maybe a settlement that he could offer which would be almost 50% of that balance owed instead of the 40% he can go up to with the higher balance.  Thank you very much for your insight!

[BV80]

1 minute ago, Dr Crandall said:

OK.  Since one of the balances was exactly $1,000.00 cheaper if he could get an accounting of that pre-suit, he could use that lower figure for maybe a settlement that he could offer which would be almost 50% of that balance owed.  Thank you very much for your insight!

One of the balances?  All that matters is if the most recent balance showing is correct.   You can’t pick one of the other balances just because it happens to be less. 

 

[Dr Crandall]

1 minute ago, BV80 said:

One of the balances?  All that matters is if the most recent balance showing is correct.   You can’t pick one of the other balances just because it happens to be less. 

 

I think you misunderstood me.  He is also going to request in DV an accounting on how the balance was arrived at.  Obviously, whatever the balance is will be what he negotiates off of.  Being the OC they should have a reason and final accounting on the balance that the law firm has.