Please help!! Being Sued by Velocity Investments, LLC assignee of Prosper Funding LLC

[lilladyy]

I have not been sued served yet, but I received a call from my parents that someone has been stopping by trying to serve me, and advertisement letters from lawyers stating that there is a lawsuit. I went through a bad period in 2016/2017 (full time student that was graduating, full time asst. manager with hours being cut, mother to two kids and pregnant, then husband lost his job), basically all the stressed caused me to go into depression and all my accounts ended up being charged off. This will be the 4th lawsuit against me within a couple of months so far, so I really appreciate as much help as possible.

I tried doing research of my own, and noticed a couple of things I'm not sure if it would help me fight the case. I went through the mails and noticed that on March 6, 2019, RAUSCH, STRUM, ISRAEL, ENERSON & HORNIK LLP sent me a letter with options to settle/payment plans, and that I had until March 28,2019 to reply. However, the date they filed the suit was March 8, 2019. I can't seem to locate a letter from them stating that they are suing me. I also noticed in the court information, it shows that the last payment date was August 26,2017. Which is true, however that was when Harvey hit us, and so they returned that money, along with September's payment that was drafted. I did not know about this forum until a coworker told me, so I am having to pay on the two lawsuits against me already. I have a infant and am the only source of income in my family of 5, so money is extremely tight for us. I really appreciate anyone taking the time to helping me. 

1. Who is the named plaintiff in the suit?

Velocity Investments, LLC assignee of Prosper Funding LLC

2. What is the name of the law firm handling the suit? (should be listed at the top of the complaint.)

I believe it is Rausch, Sturm, Israel, Enerson & Hornik LLP

3. How much are you being sued for?

$4,355.92

4. Who is the original creditor? (if not the Plaintiff)

Prosper Funding LLC

5. How do you know you are being sued? (You were served, right?)

Informed by my mother that service had been attempted and advertisement letters from law firms. 

6. How were you served? (Mail, In person, Notice on door)

Have not been served yet. 

7. Was the service legal as required by your state?

N/A

Process Service Requirements by State - Summons Complaint

8. What was your correspondence (if any) with the people suing you before you think you were being sued?

I had never heard of Velocity Investments until now. RAUSCH STRUM does have another account that I have a judgement against (not knowing how to file an answer). 

9. What state and county do you live in?

Texas, Harris

10. When is the last time you paid on this account? (looking to establish if you are outside of the statute of limitations)

Payment was last made on this account in July of 2017, not outside of the statute of limitations. 

11. When did you open the account (looking to establish what card agreement may be applicable)?

This was an unsecured loan that was opened in June of 2015.

12. What is the SOL on the debt? To find out:

4 years

Statute of Limitations on Debts

13. What is the status of your case? Suit served? Motions filed? You can find this by a) calling the court or b) looking it up online (many states have this information posted - when you find the online court site, search by case number or your name).

Under case status, it just says active. 

14. Have you disputed the debt with the credit bureaus (both the original creditor and the collection agency?)

No, This debt shows "Charged off as bad debt" in Jan 2018, and also shows, "Purchased by another lender." 

15. Did you request debt validation before the suit was filed? Note: if you haven't sent a debt validation request before being sued, it likely won't help create FDCPA violations, but disputing after being sued could be useful to show the court that you dispute the debt ('account stated' vs. 'breach of contract').

Just letters from them, but I have not had contact with them. 

16. How long do you have to respond to the suit? (This should be in your paperwork). If you don't respond to the lawsuit notice you will lose automatically. In 99% of the cases, they will require you to answer the summons, and each point they are claiming. We need to know what the "charges" are. Please post what they are claiming. Did you receive an interrogatory (questionnaire) regarding the lawsuit?

I have not been officially served, but what I can see online is:

A. Parties
1. The address for Plaintiff, Velocity Investments, LLC Assignee Of Prosper Funding LLC, is PO BOX 788, WALL NJ 07719.

2. Defendant, XXXXXXX may be served with process at XXXXXXXXXXX, or at such other place as the Defendant may be found.

B. Jurisdiction
3. Plaintiff seeks only monetary relief of $100,000 or less, including damages of any kind, penalties, costs, and expenses.

4. Plaintiff asserts that the above-named court has jurisdiction over the subject matter of this case and the person(s) of Defendant(s) and that the damages sought are within the jurisdictional limits of the court.

C. Venue
5. Venue of this action is proper in the county named above because Defendant(s) is/are individual(s) believed to be residing in said county at the time of commencement of suit.

D. Facts
6. On or about June 26, 2015 PROSPER FUNDING LLC and Defendant entered into a Contract for the extension of credit bearing account number ending in **XXXX (Hereinafter referred to as “the Contract” and/or “the Account”). PROSPER FUNDING LLC performed its obligations under the Contract by extending credit to Defendant(s) and/or lending money to Defendant(s). Defendant(s) received and/or made use of the credit extended/money lent by PROSPER FUNDING LLC according to the agreed upon terms of the Contract.

7. Despite Defendant’s(s’) receipt and/or use of credit/funds from PROSPER FUNDING LLC , Defendant(s) did not repay PROSPER FUNDING LLC as agreed. Defendant(s) made a last payment on the Account on August 26, 2017. Defendant(s) defaulted on the obligation to repay PROSPER FUNDING LLC pursuant to the Contract. Defendant's(s') Account was closed due to nonpayment on January 24, 2018, and at the time the Account was closed, an unpaid balance remained owed. Defendant's(s') default constitutes breach of Contract.

8. On or about February 21, 2018, PROSPER FUNDING LLC assigned Defendant’s(s’) credit account to Plaintiff, and Plaintiff is the current holder of Defendant’s(s’) account and the proper party to bring this lawsuit.

9. After allowing for all just and lawful offsets, credits, and payments on the credit account, the total balance due to Plaintiff by Defendant(s) on the Account is $4,355.92 plus interest.

10. The Plaintiff has made demand upon the Defendant(s) for payment of the amount due and payable in full. The Defendant(s) have failed, neglected, and refused to pay the amount requested.

11. Plaintiff has performed all conditions precedent to the filing of this action or all such conditions precedent have been performed or have occurred.

E. Damages
12. Plaintiff seeks damages on its liquidated claim in the amount of at least $4,355.92 plus interest, which is within the jurisdictional limits of this court.

F. Conditions Precedent
13. All conditions precedent to Plaintiff” 5 claim for relief have been performed or have occurred.

G. Miscellany
14. The undersigned attorneys hereby give notice that they and Plaintiff are attempting to collect a debt and any information obtained will be used for that purpose. Plaintiff‘s attorneys are debt collectors.

17. What evidence did they send with the summons? An affidavit? Statements from the OC? Contract? List anything else they attached as exhibits.

There were no evidence or anything attached online. Just the Petition. 

18.  How did you find out about this site?

A coworker told me how she was able to get help and fight the charges herself. 

 

I did see an arbitration clause, but it sounded different then the other clauses that was posted around the forum. I'm unsure of the arbitration since I don't understand if it would help me or hurt me based on the verbiage. Please see below.

22. Arbitration. RESOLUTION OF DISPUTES: YOU ACKNOWLEDGE THAT YOU HAVE READ THIS PROVISION CAREFULLY, AND UNDERSTAND THAT IT LIMITS YOUR RIGHTS IN THE EVENT OF A DISPUTE BETWEEN YOU AND US. YOU UNDERSTAND THAT YOU HAVE THE RIGHT TO REJECT THIS PROVISION, AS PROVIDED IN PARAGRAPH (i) BELOW.

 (iii) "Claim" means any dispute, claim, or controversy (whether based on contract, tort, intentional tort, constitution, statute, ordinance, common law, or equity, whether pre-existing, present, or future, and whether seeking monetary, injunctive, declaratory, or any other relief) arising from or relating to this Note or the relationship between us and you (including claims arising prior to or after the date of the Agreement, and claims that are currently the subject of purported class action litigation in which you are not a member of a certified class), and includes claims that are brought as counterclaims, cross claims, third party claims or otherwise, as well as disputes about the validity or enforceability of this Agreement or the validity or enforceability of this Section 22.

(b) Any Claim shall be resolved, upon the election of either us or you, by binding arbitration administered by the American Arbitration Association or JAMS, under the applicable arbitration rules of the administrator in effect at the time a Claim is filed ("Rules"). Any arbitration under this Agreement will take place on an individual basis; class arbitrations and class actions are not permitted. If you file a claim, you may choose the administrator; if we file a claim, we may choose the administrator, but we agree to change to the other permitted administrator at your request (assuming that the other administrator is available). You can obtain the Rules and other information about initiating arbitration by contacting the American Arbitration Association at 1633 Broadway, 10th Floor, New York, NY 10019, (800) 778-7879, www.adr.org; or by contacting JAMS at 1920 Main Street, Suite 300, Irvine, CA 92614, (949) 224-1810, www.jamsadr.com. The address for serving any arbitration demand or claim on us is Prosper Marketplace, Inc., 221 Main Street, Suite 300, San Francisco, CA 94105, Attention: Compliance.

(c) Claims will be arbitrated by a single, neutral arbitrator, who shall be a retired judge or a lawyer with at least ten years' experience. We agree not to invoke our right to elect arbitration of an individual Claim filed by you in a small claims or similar court (if any), so long as the Claim is pending on an individual basis only in such court.

(d) We will pay all filing and administration fees charged by the administrator and arbitrator fees up to $1,000, and we will consider your request to pay any additional arbitration costs. If an arbitrator issues an award in our favor, you will not be required to reimburse us for any fees we have previously paid to the administrator or for which we are responsible. If you receive an award from the arbitrator, we will reimburse you for any fees paid by you to the administrator or arbitrator. Each party shall bear its own attorney's, expert's and witness fees, which shall not be considered costs of arbitration; however, if a statute gives you the right to recover these fees, or fees paid to the administrator or arbitrator, then these statutory rights will apply in arbitration.

(e) Any in-person arbitration hearing will be held in the city with the federal district court closest to your residence, or in such other location as you and we may mutually agree. The arbitrator shall apply applicable substantive law consistent with the Federal Arbitration Act, 9 U.S.C. § 1-16, and, if requested by either party, provide written reasoned findings of fact and conclusions of law. The arbitrator shall have the power to award any relief authorized under applicable law. Any appropriate court may enter judgment upon the arbitrator's award. The arbitrator's decision will be final and binding except that: (1) any party may exercise any appeal right under the FAA; and (2) any party may appeal any award relating to a claim for more than $100,000 to a three-arbitrator panel appointed by the administrator, which will reconsider de novo any aspect of the appealed award. The panel's decision will be final and binding, except for any appeal right under the FAA. Unless applicable law provides otherwise, the appealing party will pay the appeal's cost, regardless of its outcome. However, we will consider any reasonable written request by you for us to bear the cost.

(f) YOU AND WE AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN OUR INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. Further, unless both you and we agree otherwise in writing, the arbitrator may not consolidate more than one person's claims. The arbitrator shall have no power to arbitrate any Claims on a class action basis or Claims brought in a purported representative capacity on behalf of the general public, other borrowers, or other persons similarly situated. The validity and effect of this paragraph (f) shall be determined exclusively by a court, and not by the administrator or any arbitrator.

(g) If any portion of this Section 22 is deemed invalid or unenforceable for any reason, it shall not invalidate the remaining portions of this section. However, if paragraph (f) of this Section 22 is deemed invalid or unenforceable in whole or in part, then this entire Section 22 shall be deemed invalid and unenforceable. The terms of this Section 22 will prevail if there is any conflict between the Rules and this section.

(h) YOU AND WE AGREE THAT, BY ENTERING INTO THIS AGREEMENT, THE PARTIES ARE EACH WAIVING THE RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE IN A CLASS ACTION. YOU AND WE ACKNOWLEDGE THAT ARBITRATION WILL LIMIT OUR LEGAL RIGHTS, INCLUDING THE RIGHT TO PARTICIPATE IN A CLASS ACTION, THE RIGHT TO A JURY TRIAL, THE RIGHT TO CONDUCT FULL DISCOVERY, AND THE RIGHT TO APPEAL (EXCEPT AS PERMITTED IN PARAGRAPH (e) OR UNDER THE FEDERAL ARBITRATION ACT).

 I really appreciate any help I can get. I do apologize on the long lengthy post!

[Harry Seaward]

6 hours ago, lilladyy said:

I have not been sued yet,

It sounds like you have, but you haven't been served yet. 

 

6 hours ago, lilladyy said:

Prosper Funding LLC

Take a look at your original loan paperwork to see if there is anything there about arbitration. 

[lilladyy]

Hi @Harry Seaward you are correct. I meant I have not been served yet. I did take a look at the original loan paperwork and it does show that there is an arbitration clause. I have attached it at the bottom of my post (sorry I know the post was really long). It just sounded a bit different than the synchrony clause that I have been seeing around the forum, so I am not sure if this would work in my favor or not. 

[Harry Seaward]

This part of the arbitration agreement is interesting...

Quote

(d) We will pay all filing and administration fees charged by the administrator and arbitrator fees up to $1,000

JAMS has a set of rules (Consumer Arbitration Minimum Standards) that says they won't hear arbitration cases between a business and a consumer unless the arbitration agreement provides that the consumer will pay no more than $250.  Since the absolute minimum JAMS bill is well over $2,000, subsection (d) of the arb agreement is in direct conflict with the JAMS rules.

I have seen this language in arbitration agreements in the past, but AFAIK, we have not seen consumers use arbitration in these cases.  @fisthardcheese may have experience with it, however.  Let's see what he has to say.

[Clydesmom]

24 minutes ago, Harry Seaward said:

I have seen this language in arbitration agreements in the past, but AFAIK, we have not seen consumers use arbitration in these cases. 

We had one (from NV I think) that specifically used it against Velocity on a similar Prosper/Web Bank loan contract and the MTC was granted and Velocity folded.

[fisthardcheese]

6 hours ago, Harry Seaward said:

This part of the arbitration agreement is interesting...

JAMS has a set of rules (Consumer Arbitration Minimum Standards) that says they won't hear arbitration cases between a business and a consumer unless the arbitration agreement provides that the consumer will pay no more than $250.  Since the absolute minimum JAMS bill is well over $2,000, subsection (d) of the arb agreement is in direct conflict with the JAMS rules.

I have seen this language in arbitration agreements in the past, but AFAIK, we have not seen consumers use arbitration in these cases.  @fisthardcheese may have experience with it, however.  Let's see what he has to say.

It is irrelevant.  JAMS consumer minimum standards supersedes the contract language in regards to fees.   I have arbitrated cases a couple times with contracts that have the same or similar language and JAMS just sends the regular $250 bill each time. 

[Harry Seaward]

15 hours ago, fisthardcheese said:

JAMS consumer minimum standards supersedes the contract language in regards to fees.

Per the CMS, JAMS can refuse to accept jurisdiction because the original contract doesn't comply with the CMS.

[lilladyy]

I really appreciate everyone's feedback. If I do end up going the arbitration route, what would be the worst that would happen??

[fisthardcheese]

12 hours ago, Harry Seaward said:

Per the CMS, JAMS can refuse to accept jurisdiction because the original contract doesn't comply with the CMS.

1.  JAMS will have to accept the case with a granted MTC

2.  I have never seen JAMS nor AAA refuse to arbitrate due to an issue with the contract language.  If anything, with AAA, they actually just charge the company extra fees upfront to comply with their Clause Registry and then point to the AAA rules stating that if a consumer contract mentions their name, it MUST comply with their consumer min. standards and they will then ignore anything that runs contrary.  I have had personal experience with this very thing regarding a AAA contract.

[fisthardcheese]

5 hours ago, lilladyy said:

If I do end up going the arbitration route, what would be the worst that would happen??

Well, you've been sued, so technically the worst that can happen with any route your choose would be a judgement against you.

But using arbitration with the odds we have gathered from this message board and others, is that the likely "worst" is that you end up with a regular dismissed case instead of a dismissal with prejudice and a repayment of your $250 JAMS fee.

[Harry Seaward]

On 3/31/2019 at 4:15 AM, fisthardcheese said:

1.  JAMS will have to accept the case with a granted MTC

Why? The court order isn't binding on JAMS/AAA.

On 3/31/2019 at 4:15 AM, fisthardcheese said:

2.  I have never seen JAMS nor AAA refuse to arbitrate due to an issue with the contract language.  If anything, with AAA, they actually just charge the company extra fees upfront to comply with their Clause Registry and then point to the AAA rules stating that if a consumer contract mentions their name, it MUST comply with their consumer min. standards and they will then ignore anything that runs contrary.  I have had personal experience with this very thing regarding a AAA contract.

Does JAMS rules have something similar? CMS seems pretty clear that they can refuse to accept jurisdiction if the contract doesn't hit all the beats. 

[Way313]

Hello, please help! I'm currently being sued by Velocity also for an unsecured loan from Prosper & Webbank.  However, I wasn't served in the physical.  I answered my RING app and never identified myself as the person being served.  I only responded that noone was home.  When I arrived home, I discovered the Summons was laying in a chair on the porch.

They have included a copy of the Promissory Note and Borrower Registration Agreement and both indicate that any claim shall be resolved by binding Arbitration administered by the American Arbitration Association or JAMS.  

[Harry Seaward]

@Way313

You need to start your own thread. 

Consider yourself served. There's absolutely no point in trying to say you weren't. 

Your best bet is to use AAA arbitration. 

[fisthardcheese]

18 hours ago, Harry Seaward said:

Why? The court order isn't binding on JAMS/AAA.

Does JAMS rules have something similar? CMS seems pretty clear that they can refuse to accept jurisdiction if the contract doesn't hit all the beats. 

I suppose it's true that they CAN refuse, but they haven't yet.  I highly doubt they would.  But, also, even if they do, AAA is potentially available as well if the contract language has the usual language saying if JAMS is not available another similar arbitrator may be used.

[lilladyy]

Thank you everyone for your responses! Sorry I've been stressed trying to prepare for a court case that I had today with a JDB.  For some reason they told the judge "no suit". I looked and it said it's basically them dismissing it. Not sure why.. 

@Way313 Is this your first time in contact with the server? I wonder why they just didn't leave my paperwork...

@fisthardcheese Should I go ahead and submit a MTC to the court now? Or should I wait until I am officially served? 

[fisthardcheese]

16 hours ago, lilladyy said:

Thank you everyone for your responses! Sorry I've been stressed trying to prepare for a court case that I had today with a JDB.  For some reason they told the judge "no suit". I looked and it said it's basically them dismissing it. Not sure why.. 

@Way313 Is this your first time in contact with the server? I wonder why they just didn't leave my paperwork...

@fisthardcheese Should I go ahead and submit a MTC to the court now? Or should I wait until I am officially served? 

If you have not been served, I would wait.  Use this time to make sure your MTC is solid and to start preparing for the next steps in your case. 

[MDanish4]

Hello @lilladyy, Could you please advise what happened to your case? Did you end up filing MTC? Was it approved? I am in similar situation and would like to know. Thank you

[lilladyy]

@MDanish4 I still have not been served yet, so I have not taken any action, except to prepare a MTC. Have you been served already?

[MDanish4]

On 6/1/2019 at 3:22 PM, lilladyy said:

@MDanish4 I still have not been served yet, so I have not taken any action, except to prepare a MTC. Have you been served already?

Yes, I have been served on the 29th. You mind sharing me the MTC you prepared with me?