Lending Club Collection | Agreement Full of Blank Lines

[LaneBlane]

I've been helping a friend who received a notice from a collection agency on a Lending Club (Web Bank) personal loan she stopped paying on late last year.   The balance is around $6,000.

In response to her debt validation letter, the agency sent a few documents that include a Borrower Agreement with a "Copy of Original" watermark across each page.  The Borrower Agreement includes an Exhibit A, Loan Agreement and Promissory Note, with several blank lines where the amount of the loan, interest, and repayment terms should have been written.  The document that includes this information is a one-page Truth in Lending Disclosure Statement that's separate from the Borrower Agreement.

The Borrower Agreement states:

1. Your loan will be governed by the terms of the Loan Agreement and Promissory Note, which is attached to this Agreement as Exhibit A.
    
2. Your loan will have a principal balance in the amount set forth in the Truth in Lending disclosure and Loan Agreement and Promissory Note.
    
3. Once the Loan Agreement and Promissory Note is signed by LendingClub or its designee acting as your attorney-in-fact, it is deemed executed on your behalf and shall be your valid and binding obligation thereafter.

 

Based on the terms of the Borrower Agreement, and all the blank lines in the Loan Agreement and Promissory Note, what is the best way to respond to the collection agency?  Is it even necessary to respond at this time?

Thanks for your input!

[BV80]

17 minutes ago, LaneBlane said:

I've been helping a friend who received a notice from a collection agency on a Lending Club (Web Bank) personal loan she stopped paying on late last year.   The balance is around $6,000.

In response to her debt validation letter, the agency sent a few documents that include a Borrower Agreement with a "Copy of Original" watermark across each page.  The Borrower Agreement includes an Exhibit A, Loan Agreement and Promissory Note, with several blank lines where the amount of the loan, interest, and repayment terms should have been written.  The document that includes this information is a one-page Truth in Lending Disclosure Statement that's separate from the Borrower Agreement.

The Borrower Agreement states:

1. Your loan will be governed by the terms of the Loan Agreement and Promissory Note, which is attached to this Agreement as Exhibit A.
    
2. Your loan will have a principal balance in the amount set forth in the Truth in Lending disclosure and Loan Agreement and Promissory Note.
    
3. Once the Loan Agreement and Promissory Note is signed by LendingClub or its designee acting as your attorney-in-fact, it is deemed executed on your behalf and shall be your valid and binding obligation thereafter.

 

Based on the terms of the Borrower Agreement, and all the blank lines in the Loan Agreement and Promissory Note, what is the best way to respond to the collection agency?  Is it even necessary to respond at this time?

Thanks for your input!

Was anything provided that showed the amount that the CA claims is owed?  For instance, if the CA claims in its collection letter that the person owes $5928.85, was anything provided that showed that amount?

[LaneBlane]

9 hours ago, BV80 said:

Was anything provided that showed the amount that the CA claims is owed?  For instance, if the CA claims in its collection letter that the person owes $5928.85, was anything provided that showed that amount?

They provided a running accounting that shows how much was due each month, how much was paid, and the resulting balance.   The final line includes the balance they claim is owed.

[BV80]

9 hours ago, LaneBlane said:

They provided a running accounting that shows how much was due each month, how much was paid, and the resulting balance.   The final line includes the balance they claim is owed.

I would say they validated.  Validation of a debt under the FDCPA does not require the amount of proof as would be required in court.  The 8th Circuit Court of Appeals agreed with the 4th Circuit’s ruling in Chaudhry that “Consistent with the legislative history, verification is only intended to `eliminate the ... problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid.'" Dunham v. Portfolio Recovery Assocs., LLC, 663 F.3d 997, 1003 (8th Cir. 2011)(citing Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir.1999)).

[LaneBlane]

2 hours ago, BV80 said:

I would say they validated.  Validation of a debt under the FDCPA does not require the amount of proof as would be required in court.

Thanks for your help, BV80.  If the information they provided is enough to validate the debt, I'm assuming a response isn't necessary unless my friend wants to attempt a settlement.

The Borrower Agreement does include an arbitration provision that states either party may elect final and binding arbitration as the sole means for remedy or resolution of any past, current, or future claims.  What if she were to send a letter to the collection agency that said she elected final and binding arbitration to resolve any claims?  This could be followed by an offer to settle for a lump sum.  I'm not sure if the mention of arbitration would persuade them to settle for 25%.

[BV80]

56 minutes ago, LaneBlane said:

Thanks for your help, BV80.  If the information they provided is enough to validate the debt, I'm assuming a response isn't necessary unless my friend wants to attempt a settlement.

The Borrower Agreement does include an arbitration provision that states either party may elect final and binding arbitration as the sole means for remedy or resolution of any past, current, or future claims.  What if she were to send a letter to the collection agency that said she elected final and binding arbitration to resolve any claims?  This could be followed by an offer to settle for a lump sum.  I'm not sure if the mention of arbitration would persuade them to settle for 25%.

No, there is no need for further response by your friend.

In an attempt to settle, she could include that she elects arbitration, but I don’t know what effect it would have on a settlement amount.  

[LaneBlane]

5 hours ago, BV80 said:

No, there is no need for further response by your friend.

In an attempt to settle, she could include that she elects arbitration, but I don’t know what effect it would have on a settlement amount.  

Thanks again for your help on this, BV80.   I'll let her know it's a waiting game unless she wants to try to settle.

[JDCHATER]

On 9/3/2021 at 5:13 AM, BV80 said:

Validation of a debt under the FDCPA does not require the amount of proof as would be required in court.

Hi, is it a FDCPA violation if the JDB files a lawsuit before contacting the "debtor" before filling the lawsuit.?

My lawsuit was files on February 10 and I was served on February 16th. Later on, (I dont remember when) I received a debt verification package that says.."Pursuant to your request and the FDCPA please find attached your debt verification  debt from the OC."

I HAVE NEVER REQUESTED SUCH VERIFICATION!!!

I DIDNT KNOW ABOUT THE LAWSUIT UNTIL THE DAY A WAS SERVED.

Is it a requirement that the JDB has to verify the debt before filling the lawsuit? If not, why did my JDB generated such letter without me request?

[BV80]

4 minutes ago, JDCHATER said:

Hi, is it a FDCPA violation if the JDB files a lawsuit before contacting the "debtor" before filling the lawsuit.?

My lawsuit was files on February 10 and I was served on February 16th. Later on, (I dont remember when) I received a debt verification package that says.."Pursuant to your request and the FDCPA please find attached your debt verification  debt from the OC."

I HAVE NEVER REQUESTED SUCH VERIFICATION!!!

I DIDNT KNOW ABOUT THE LAWSUIT UNTIL THE DAY A WAS SERVED.

Is it a requirement that the JDB has to verify the debt before filling the lawsuit? If not, why did my JDB generated such letter without me request?

Debt collectors are not required to contact a consumer before filing a lawsuit.  The reason they included that statement was probably to attempt to cover their tushies just in case you did request verification.

The only time verification would be required before a lawsuit would be if a consumer received a communication containing the 30-day notice and the consumer sent a timely demand for verification before the 30 days was up and before a lawsuit was filed.

[JDCHATER]

1 hour ago, BV80 said:

 The reason they included that statement was probably to attempt to cover their tushies just in case you did request verification.

Oh I see.

But why state : "Pursuant to your request..."?  That is just straight up document manipulation.

Can I ask during trial to the plaintiff's attorney to show me "my" written request for validation?

I know is not a great defense and I am not planing on wining the case with it but I want to put some doubt about the legitimacy of their documents from the moment the trial goes on.

[BV80]

1 hour ago, JDCHATER said:

Oh I see.

But why state : "Pursuant to your request..."?  That is just straight up document manipulation.

Can I ask during trial to the plaintiff's attorney to show me "my" written request for validation?

I know is not a great defense and I am not planing on wining the case with it but I want to put some doubt about the legitimacy of their documents from the moment the trial goes on.

How is it manipulation?.  Chances are that what they sent as “verification” is something they would have included with their evidence or in response to discovery.  If the documentation is accurate and shows your account, the fact that they included it as “verification” for a request you did not make doesn’t cast doubt on it.

Start searching this site for hearsay and authentication in CA.  That’s how you might be able to cast some doubt.

[JDCHATER]

1 hour ago, BV80 said:

Start searching this site for hearsay and authentication in CA.  That’s how you might be able to cast some doubt.

Ok I will, however, I still dont understand how sending a letter stating "Pursuant to your request" when I didn't request it is not manipulation. The letter was sent a day after the case was filed with the court. I wasn't even been served yet.

What if I send I letter saying: "Thank you dear JDB for your settlement offer  but I am not interested". They never sent me any offer and I didnt request a verification.

Thanks anyway.

[BV80]

29 minutes ago, JDCHATER said:

Ok I will, however, I still dont understand how sending a letter stating "Pursuant to your request" when I didn't request it is not manipulation. The letter was sent a day after the case was filed with the court. I wasn't even been served yet.

What if I send I letter saying: "Thank you dear JDB for your settlement offer  but I am not interested". They never sent me any offer and I didnt request a verification.

Thanks anyway.

To manipulate is to try to unfairly or deceptively control.  Document manipulation means to alter/change documents in some way.   As long as the information they sent was yours and is accurate, they’re not hurting you or trying to be deceptive.  In fact, they’ve given you documentation ahead of time to view and study.  That’s not deceptiveness.  Just think about it:  if the information contains an error, you might be able to use it to your advantage.

Did you ever dispute the debt in any way?  

[JDCHATER]

1 hour ago, BV80 said:

Did you ever dispute the debt in any way?  

So far never admitted it was my debt.

The Excel looking spreed sheet provided with info about the account shows somebody else's date of birth.

If my credit report doesn't show that I ever owned the debt  account, can I use Mistaken Identity as an Affirmative Defense too? If the judge asks why I never reported the theft can I say... because I was never aware of it?

[BV80]

45 minutes ago, JDCHATER said:

So far never admitted it was my debt.

The Excel looking spreed sheet provided with info about the account shows somebody else's date of birth.

If my credit report doesn't show that I ever owned the debt  account, can I use Mistaken Identity as an Affirmative Defense too? If the judge asks why I never reported the theft can I say... because I was never aware of it?

The lack of an entry on your credit report doesn’t really mean anything because not all creditors report.

The issue is whether or not it’s your debt.  Did you have that account?

I would raise the issue of the wrong DOB to cast doubt on the spreadsheet, but did they present billing statements?  If so, do the billing statements show your name and address?

[LaneBlane]

@JDCHATER  Most correspondence from collection agencies and JDBs are just impersonal form letters with verbiage that may or may not fit your particular circumstance.  At the end of the day, what does it matter?

You may need more than an incorrect date of birth if you're trying to show an account did not belong to you, especially if statements reflect your correct name and billing address.

[Flyingifr]

Let me get this straight - the Plaintiff submitted a blank form contract without the alleged debtor's name, address, or other identifying information and without the debtor's signature indicating an agreement took place and a legal obligation to repay was agreed to? It sounds to me that the plaintiff doesn't HAVE the signed original of the debtor's contract and is trying to pass off on the Court some other document that may or may not be what the alleged debtor agreed to, if the alleged debtor agreed to anything at all. Not having this piece of evidence can be argued as insufficient evidence of a major element of the Plaintiff's Burden of Proof.

[BV80]

21 minutes ago, Flyingifr said:

Let me get this straight - the Plaintiff submitted a blank form contract without the alleged debtor's name, address, or other identifying information and without the debtor's signature indicating an agreement took place and a legal obligation to repay was agreed to? It sounds to me that the plaintiff doesn't HAVE the signed original of the debtor's contract and is trying to pass off on the Court some other document that may or may not be what the alleged debtor agreed to, if the alleged debtor agreed to anything at all. Not having this piece of evidence can be argued as insufficient evidence of a major element of the Plaintiff's Burden of Proof.

It was included in a response to a DV.  No court yet.

[LaneBlane]

18 hours ago, Flyingifr said:

Let me get this straight - the Plaintiff submitted a blank form contract without the alleged debtor's name, address, or other identifying information and without the debtor's signature indicating an agreement took place and a legal obligation to repay was agreed to? It sounds to me that the plaintiff doesn't HAVE the signed original of the debtor's contract and is trying to pass off on the Court some other document that may or may not be what the alleged debtor agreed to, if the alleged debtor agreed to anything at all. Not having this piece of evidence can be argued as insufficient evidence of a major element of the Plaintiff's Burden of Proof.

There's no lawsuit involved.   My friend just needed to respond to some documents she received after requesting validation.

I did some further research into this and found the information I needed.

According to 17 C.J.S. Contracts § 65 (1963):  As a general rule, presence of blanks in a contract is fatal to the enforcement if the blanks occur in a provision dealing with an essential term of the contract.  (C.J.S. is an encyclopedia of United States law at the federal and state levels.)  Because the blanks involved essential terms to the contract such as the loan amount, interest rate, payment terms, etc., the Loan Agreement and Promissory Note would be unenforceable.

LendingClub's agreement says it's governed by the Loan Agreement and Promissory Note.  It also states, “Your obligations, including your obligation to repay principal and interest, are set forth in the Loan Agreement and Promissory Note. Other fees and terms of the loan will also be set forth in the Loan Agreement and Promissory Note.”   My friend's response asked how there could be an obligation to repay principal and interest that isn't specified.  In accordance with the arbitration provision, she also gave written notice that she elected final and binding arbitration as the sole and exclusive forum and remedy for resolution of any claim.

 

[shadow99]

5 hours ago, LaneBlane said:

There's no lawsuit involved.   My friend just needed to respond to some documents she received after requesting validation.

I did some further research into this and found the information I needed.

According to 17 C.J.S. Contracts § 65 (1963):  As a general rule, presence of blanks in a contract is fatal to the enforcement if the blanks occur in a provision dealing with an essential term of the contract.  (C.J.S. is an encyclopedia of United States law at the federal and state levels.)  Because the blanks involved essential terms to the contract such as the loan amount, interest rate, payment terms, etc., the Loan Agreement and Promissory Note would be unenforceable.

LendingClub's agreement says it's governed by the Loan Agreement and Promissory Note.  It also states, “Your obligations, including your obligation to repay principal and interest, are set forth in the Loan Agreement and Promissory Note. Other fees and terms of the loan will also be set forth in the Loan Agreement and Promissory Note.”   My friend's response asked how there could be an obligation to repay principal and interest that isn't specified.  In accordance with the arbitration provision, she also gave written notice that she elected final and binding arbitration as the sole and exclusive forum and remedy for resolution of any claim.

 

 

I have a LendingClub loan.  They have Promissory Notes that are electronically filled out when the loan is approved & you accept the funds with no blank spots. I downloaded mine before they took away my online access to the account so I'd have the arbitration clause, etc.

I'd think that if LendingClub gave them all the documentation, they'd be able to access it easily enough.

[Bulldoger]

1 hour ago, shadow99 said:

 

I have a LendingClub loan.  They have Promissory Notes that are electronically filled out when the loan is approved & you accept the funds with no blank spots. I downloaded mine before they took away my online access to the account so I'd have the arbitration clause, etc.

 

Shadow99 be aware that in Virginia Promissory Notes have 6 years SOL not the 3 years of open contracts or 5 years signed contracts,

§ 8.3A-118. Statute of limitations.

(a) Except as provided in subsection (e), an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date.

[shadow99]

1 hour ago, Bulldoger said:

Shadow99 be aware that in Virginia Promissory Notes have 6 years SOL not the 3 years of open contracts or 5 years signed contracts,

Thanks - I thought it was 5 years as a signed contract. Now I know.

[LaneBlane]

3 hours ago, shadow99 said:

 

I have a LendingClub loan.  They have Promissory Notes that are electronically filled out when the loan is approved & you accept the funds with no blank spots. I downloaded mine before they took away my online access to the account so I'd have the arbitration clause, etc.

I'd think that if LendingClub gave them all the documentation, they'd be able to access it easily enough.

 

I paid off a LendingClub loan a while back, so I know what you mean.  The documents the collection agency sent to my friend don't include a separate Promissory Note.  They also provided her with a list of all the documents on her account, including the loan documents.  A Promissory Note wasn't listed, separate from the Borrower Agreement that contains the Loan Agreement and Promissory Note with blank lines.

It will be interesting to see what, if anything, the collection agency comes back with.

 

[LaneBlane]

2 hours ago, Bulldoger said:

Shadow99 be aware that in Virginia Promissory Notes have 6 years SOL not the 3 years of open contracts or 5 years signed contracts,

§ 8.3A-118. Statute of limitations.

(a) Except as provided in subsection (e), an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date.

The Borrower Agreement contains the following language that says it's governed by Utah law.   We're not in Virginia.  Out of curiosity, would this language mean Utah's SOL would apply?

The provisions of this Borrower Agreement will be governed by Federal laws and the laws of the State of Utah to the extent not preempted, without regard to any principle of conflicts of laws that would require or permit the application of the laws of any other jurisdiction.

 

[shadow99]

14 minutes ago, LaneBlane said:

The Borrower Agreement contains the following language that says it's governed by Utah law.   We're not in Virginia.  Out of curiosity, would this language mean Utah's SOL would apply?

Bulldogger just pointed that out because we're both in Virginia and we've been chatting.

I think you could argue that Utah's SOL applies.  I'm curious about that myself - when a contract says that one state law applies to the contract, but you live in a different state, which one wins?  Or is simply up to the judge.

I also had a Prosper loan with pretty much the same language. It was for slightly less than $3000, but I have a dismissal with prejudice in the works (just pending the court filing) because the JDB did not want to arbitrate.