Original Credit Card application

Jerseee,

Absolutely. Once a consumer learns of the fraud they should stop using the card. Next, notify the cc company about the "potential" (hehe) fraud and let them address it. If they do not address the "potential" fraud, an easy remedy is guaranteed available under the FCBA and collection is estopped. This method is the easiest way that any beginner can use and present paperwork to the court in simple terms that all parties can easily understand (even through the cc company loves to plead otherwise). Unfortunately, most people only learn about the fraud once the card is maxed and that places them under a brightly lit microscope.

Cute_chick,

Johnson v. MBNA's appellate holding regards what is deemed a reasonable investigation under the FCRA, using the facts in the trial court interpreted most favorably to Johnson, because she is the non-movant, and that it is the province of the jury to determine what a reasonable investigation is. It holds nothing regarding validity/verification of debts, or anything remotely in that arena. Look at the judges wording carefully. He states:

"Johnson attempted to set up a reduced payment plan and changed the address on the account to her business address. However, a jury could reasonably conclude that this evidence showed only that Johnson had tried to make payment arrangements even though she had no legal obligation to do so. Indeed, Johnson testified that, during her conversations with MBNA, she had consistently maintained that she was not responsible for paying the account."

Why was she not responsible for paying the account? Was it becasue the debt itself was unverified or not verifiable? No. The facts alleged by Johnson in that case was that she was not in contract with the cc company, her former husband was, she was authorized to use the account, but was not obligated to pay on the account; only her husband was obligated and could be held responsible therefor. The cc company wanted to hold her responsible because he was bankrupt (probably because she ran up all the cc's? hehe). In order to hold her responsible, they needed to show that she was in contract with them. But because they couldn't find the original contract, they did not produce enough evidence to convince the jury that she was in contract and therefore responsible for payment on the account. This is nearly equivalent to the same thing as if you were in contract with the cc company, but you gave me permission to charge up goods and keep them as a gift. However, because I felt sorry that I fricken bankrupted you with all the purchases I made, I decided to make some payments on the cc card, even though I had no obligation to do so. The point is that because I would not be in contract, I am bestowing nothing but voluntary payments, not obligatory, upon the cc company. The issue revolves around contract, not validity of the debt. The verification portion is limited only to what verification (reasonable investigation by MBNA) is necessary under the FCRA to bind her in contract, not as to the validity debt itself. In this case, lack of the original contract is only an issue as to who is an obligor on the account; not the validity of the debt itself. The validity of the debt itself was never raised or questioned at any time. Does this help? I would have underlined, bolded, and said less stuff for clarity, but I can't figure out how to do this right now.

-squirrels

Squirrels I really think you are getting confused here and you need to take extreme caution before interpreting case law (and what others say). What do you honestly think a reasonable investigation under the FCRA should entail??? If you think it is something other than Certified Verification of a debt then you should continue to study this board . . . . .

If you write the CRAs and demand certified verification that said account is legally valid and that no fraud exists plus you demand that an authorized agent of the bank with personal knowledge of the credit card transaction solemly swear in writing under the penalty of perjury that a purported contract, furnished by the bank, is authentic and genuinely represents your signature and that account comes back unverified what does that tell you??? You should see that there is a legal problem with that original credit card contract; particularly that that contract does not legally exist. Certified Verification of a debt and the actual debt agreement goes hand in hand Squirrels . . . .

Now moving on to Johnson v. MBNA . . . What Johnson is contending (and what we all should contend in our VODs) is that "that is not her account." Stated another way "we are not obligated to pay that account . . ." She is not obligated to pay that account because she's only an authorized user. We, on the other hand, are not obligated to pay our accounts due to defects in the formation of the original debt agreements that made it literally impossible for a valid and legally enforceable contract to come into being in the first place. Do you now see why this case is so helpful to our cause?

You also need to learn how to drawn inferences from case law and other legal arguments and apply said inferences to the facts of your case/situation. You need to read in between the lines and make logically connections. If you read that case again, the court discussed how Johnson made several attempts to have the CRAs and MBNA verify that account in an effort to clear her name and prove that she's just an authorized signer who is not obligated to pay on that account. Evidence admitted at trial showed that MBNA could not verify the account because it no longer has the original credit card application. In fact, the court explained that, at that point, MBNA had a duty to inform the CRAs that it did not have the original application. In turn, the CRAs were required under the FCRA to delete the account because it was unverified. This proves my earlier statement that the CRAs investigations under the FCRA and the original contract goes hand in hand.

Then the court discussed MBNA's counterargument to the fact that this account was unverified by saying that Johnson called MBNA to make payment arrangements on this account. Now why would MBNA say that? Because MBNA is trying to get Johnson to admit that the account is verified and that the contract is valid. This is similar to how the bank tries to get us to admit that our accounts are verified (and that we in fact do have an obligation to pay) by tricking us to say that we used the card for purchases. Jerseee already discussed this issue and I piggybacked on his comment with the court's statement regarding payments arrangement made on unverified accounts. Since a payment arrangement represents someone's intent to make a payment in the future, one can reasonably infer that this statement also applies to payments actually made or items obtained on a similar unverified account.

I never said that Johnson is not responsible for that account because the account is unverified although, technically, this is true (scroll up). I said Johnson's account is unverified because MBNA did not have the original cc application. Without the original contract, MBNA cannot prove with clear and convincing evidence that Johnson (or anyone for that matter) is obligated to pay that account! This is why UCC 3-301 and the Best Evidence Rule is so critical here!!!! This is also why Johnson won her case!!!!

In fact, I simply responded to salute's inquiry regarding how to respond if the bank asks "Whether he/she used the account . . . " The court held (and you quoted this part correctly) that Johnson is NOT obligated to pay simply because she called and made payment arrangements on the account. Similarly, salute is not obligated to pay his/her credit card account simply because he/she used the card for purchases. Making payment arrangements on an account or using a credit card for purchases does not validate a debt or prove the legal validity of a contract.

A valid and legally enforceable contract is created when there is an offer, acceptance based on mutual assent, and consideration. And since credit card contracts, loan contracts, automobile contracts and mortgages are all contracts, the same rule applies. Making payment on an unverified account does not prove that a contract exists. However, possessing the original credit card contract with the alleged obligor's signature (i.e. salute's signature, Johnson's signature, etc.), coupled with the bank making full disclosure of the costs and risks of the credit card account at the time the account was opened is a step in the right direction.

Remember, under the Federal Rules of Evidence, the party seeking to enforce a legally operative document such as a credit card contract bears the burden of proving its validity.
This means the bank (MBNA or whomever) cannot pass their burden of proof to the alleged debtor (Johnson or whomever) by saying that he/she used the account or made payment arrangements on the account, or paid an account. The bank must prove that a valid contract exists before a discussion regarding payments can be made. And since 99.99% of all consumer debt contracts are based on fraud, 99.99% of all consumer debt contracts legally do not exist. If there's no contract, there's no dispute and if there's no dispute, there's no case . . .

I hope that helps Squirrels. If not, well, I tried. . . .


C_C

C_C,

I will address each of your paragraphs:

You: Squirrels I really think you are getting confused here and you need to take extreme caution before interpreting case law (and what others say). What do you honestly think a reasonable investigation under the FCRA should entail??? If you think it is something other than Certified Verification of a debt then you should continue to study this board.

Response: I never said anything about what I believe a reasonable investigation under the FCRA should entail. So why you should question it is foreign to me. In fact, I agree with you that Certified Verification of a debt should entail an investigation into its actual validity. But this did not happen in that case. Johnson v. MBNA only addressed the fact if MBNA's efforts were sufficient under the FCRA under the particular facts of that case. The actual validity of the debt was never in issue.

You: If you write the CRAs and demand certified verification that said account is legally valid and that no fraud exists plus you demand that an authorized agent of the bank with personal knowledge of the credit card transaction solemly swear in writing under the penalty of perjury that a purported contract, furnished by the bank, is authentic and genuinely represents your signature and that account comes back unverified what does that tell you??? You should see that there is a legal problem with that original credit card contract; particularly that that contract does not legally exist. Certified Verification of a debt and the actual debt agreement goes hand in hand Squirrels .

Response: All I stated was limited solely to Johnson v. MBNA and not any beliefs pertaining to exterior legal issues, which is what you are raising here.

You: Now moving on to Johnson v. MBNA .What Johnson is contending (and what we all should contend in our VODs) is that "that is not her account." Stated another way "we are not obligated to pay that account ." She is not obligated to pay that account because she's only an authorized user. We, on the other hand, are not obligated to pay our accounts due to defects in the formation of the original debt agreements that made it literally impossible for a valid and legally enforceable contract to come into being in the first place. Do you now see why this case is so helpful to our cause?

Response: Well, we agree on what johnson is contending and what her obligations consist of. We also agree that Johnson and "our" situations involve different factual circumstances, per your statement above. Johnson never raised the issue of a "defect" in the contractual formation that underlied the account. The terms of the contract and its validity were never challenged. Johnson is helpful to our cause, but it is factually distinct on many fronts.

You: You also need to learn how to drawn inferences from case law and other legal arguments and apply said inferences to the facts of your case/situation. You need to read in between the lines and make logically connections. If you read that case again, the court discussed how Johnson made several attempts to have the CRAs and MBNA verify that account in an effort to clear her name and prove that she's just an authorized signer who is not obligated to pay on that account. Evidence admitted at trial showed that MBNA could not verify the account because it no longer has the original credit card application. In fact, the court explained that, at that point, MBNA had a duty to inform the CRAs that it did not have the original application. In turn, the CRAs were required under the FCRA to delete the account because it was unverified. This proves my earlier statement that the CRAs investigations under the FCRA and the original contract goes hand in hand."

Response: Stop acting like you are God's gift to law because you are not. Your ego is waaayyyy out there. Don't give me a lecture on what I need to learn because you have no idea who I am, what I've been through, or what I know. Now, we are in agreement again about everything that occurred in the case. As you stated above, the facts of Johnson and our situations are different. It is one thing to parallel a case to our situations, but it is another to create inferences that do not exist, which is what you are doing here. In Johnson, there is a presumed valid contract existing (because it was never challenged) that binds her bankrupt ex-husband to the cc company. In our situation, we are challenging the validity of the contract itself with the cc company. Do you see the major factual difference that underlies the two distinct situations now? You must because you stated it above. The inference you are drawing is a difficult logical leap. It is not the cc account itself that was unverified in Johnson, but her contractual connection to it to obligate her on it. This is the whole key. Read the last sentence on pg. 7-8. Contractual validity was never challenged in Johnson, whereas we are challenging contractual validity. This is the major difference why the two situations are legally distinct and separate.

You: Then the court discussed MBNA's counterargument to the fact that this account was unverified by saying that Johnson called MBNA to make payment arrangements on this account. Now why would MBNA say that? Because MBNA is trying to get Johnson to admit that the account is verified and that the contract is valid. This is similar to how the bank tries to get us to admit that our accounts are verified (and that we in fact do have an obligation to pay) by tricking us to say that we used the card for purchases. Jerseee already discussed this issue and I piggybacked on his comment with the court's statement regarding payments arrangement made on unverified accounts. Since a payment arrangement represents someone's intent to make a payment in the future, one can reasonably infer that this statement also applies to payments actually made or items obtained on a similar unverified account.

Response: MBNA is trying to get her to be liable on the cc account through her ex-husband's presumed valid binding contract. Again, this is the big difference. Validity of the cc contract and the cc account are never challenged in Johnson. The lack of the contract is only evidence as to Johnson's obligations on her ex-husbands presumed valid existing cc account. Whereas we are challenging validity itself. A huge difference in factual circumstances that underlie Johnson and our cases.

You: I never said that Johnson is not responsible for that account because the account is unverified although, technically, this is true (scroll up). I said Johnson's account is unverified because MBNA did not have the original cc application. Without the original contract, MBNA cannot prove with clear and convincing evidence that Johnson (or anyone for that matter) is obligated to pay that account! This is why UCC 3-301 and the Best Evidence Rule is so critical here!!!! This is also why Johnson won her case!!!!

Response: No, that is not why Johnson won her case. UCC 3-301 was never in issue, it was never raised in that case, as nobody was trying to enforce any instruments. You are way off here. The Best Evidence Rule was never in issue either because MBNA never tried to enter the contract or a copy thereof into evidence. A writings contents were never in issue. It's terms, accuracy, or evidentiary value was never in issue. It simply did not exist and was never introduced. No admissibility issues were raised in Johnson. There are other ways to prove a contract exists without the original in existance. If it were otherwise, every original contract that accidentally burns in a fire, war, gets lost, or whatever, is now unenforceable? I don't think so.

You: In fact, I simply responded to salute's inquiry regarding how to respond if the bank asks "Whether he/she used the account." The court held (and you quoted this part correctly) that Johnson is NOT obligated to pay simply because she called and made payment arrangements on the account. Similarly, salute is not obligated to pay his/her credit card account simply because he/she used the card for purchases. Making payment arrangements on an account or using a credit card for purchases does not validate a debt or prove the legal validity of a contract.

Response: Yes. This is correct. But answer me this riddle: Who else could be the obligor on Salute's cc account?

You: A valid and legally enforceable contract is created when there is an offer, acceptance based on mutual assent, and consideration. And since credit card contracts, loan contracts, automobile contracts and mortgages are all contracts, the same rule applies. Making payment on an unverified account does not prove that a contract exists. However, possessing the original credit card contract with the alleged obligor's signature (i.e. salute's signature, Johnson's signature, etc.), coupled with the bank making full disclosure of the costs and risks of the credit card account at the time the account was opened is a step in the right direction.

Response: None.

You: Remember, under the Federal Rules of Evidence, the party seeking to enforce a legally operative document such as a credit card contract bears the burden of proving its validity.
This means the bank (MBNA or whomever) cannot pass their burden of proof to the alleged debtor (Johnson or whomever) by saying that he/she used the account or made payment arrangements on the account, or paid an account. The bank must prove that a valid contract exists before a discussion regarding payments can be made. And since 99.99% of all consumer debt contracts are based on fraud, 99.99% of all consumer debt contracts legally do not exist. If there's no contract, there's no dispute and if there's no dispute, there's no case.

Response: So where are the 99.99% of consumer success stories since you got it all figured out? Keep studying C_C.

-squirrels

Again you're misreading my posts. I NEVER said the UCC 3-301 was at issue in Johnson and neither was the FRE. I quoted those extraneous rules to illustrate my point(s). And it should be noted that the UCC 3-301 Holder in Due Course issue is separate and distinct from the contract validity issue . . . It should also be noted that there are several situations where an alleged debtor is not in a legally binding contract with an alleged creditor. Being an authorized signed on an account is one (i.e. Johnson) and being fradulently induced into a debt transaction is another (i.e. solder, you, and me).

There are several ways to attack this problem and I've just illustrated one of many in this thread. And you should know Squirrels that supporting your arguments with actual binding rules of law are almost always favored in court than arguing case law . . . . Careful reading and listening are also desired skills . . . .

At this point Squirrels I think it's best for you to agree to disagree with me and move on. I wish you much success in your endeavors and good luck.

C_C

Originally Posted by squirrels

Response: MBNA is trying to get her to be liable on the cc account through her ex-husband's presumed valid binding contract. Again, this is the big difference. Validity of the cc contract and the cc account are never challenged in Johnson. The lack of the contract is only evidence as to Johnson's obligations on her ex-husbands presumed valid existing cc account. Whereas we are challenging validity itself. A huge difference in factual circumstances that underlie Johnson and our cases.

OK, SO YOU'RE SAYING THAT THIS CASE MOST LIKELY WON'T APPLY TO MOST "NORMAL SITUATIONS" WHERE SOMEONE HAS REQUESTED VALIDATION/VERIFICATION OF THE ACCOUNT/CONTRACT.

IT LOOKS TO ME THAT JOHNSON GOT OFF THE HOOK BECAUSE SHE WASN'T A CO-SIGNER. SHE WAS SIMPLY AN AUTORIZED SIGNATURE. DOES THAT SOUND RIGHT?

[seeker]

Seems to me that Johnson does a couple of things, either directly or indirectly -- one, it does indeed say that if you are only an "authorized user" you cannot be held responsible.
But second, and almost more improtantly, it outlines a bit of what the CRA's can and cannot do, and the resposibilities of the 'reporter" -- in this case, MBNA -- they MUST maintain the original in order to verify the debt -- “the law does prohibit MBNA from maintaining it’s record[s] in such manner as to consciously avoid knowing that information it is reporting is [in]accurate.”

15 U.S.C.A.1681s-2 (a)(1)(A)(West 1998) (prohibiting creditors from furnishing consumer information to CRAs “if the [creditors] knows or consciously avoids knowing that the information is inaccurate.”)

The reporters have been consciously "avoiding" by using very loose standards for their "verifying process" -- usually supplying name, address, phone number -- let's face it, if that's all it takes to validate and verify a debt, we could all make millions of FRNs by pulling out a phone book and harvesting names!!! But they have been put on notice by this case that they must do more -- they must have the original and be able to produce it --

Now this is just my interpretation -- and I encourage you to go find the case and read it for yourself -- because, fortunately or unfortunately, case law is a lot like art, it's interpretation is in the eye of the beholder. So go take a read and see what YOUR opinion is~)

Seeker

PJT04,

You're are 99.99% correct. In most normal situations, there is only one party/signatory on an account, so there is little to no debate as to who the liable party could be. In Johnson, there was a debate as to who the liable party was - solely ex-husband, or ex-husband & Johnson jointly. MBNA could not prove she was liable becasue they did not have the original contract to see if she signed anything to make her liable [co-signer]. Read footnote 3 in the case. This is key as well. The precise holding in Johnson is that it is not enough for a CRA to verify identity/liability on a cc acount by simply checking only the name and address listed on the report where there are two alleged account holders. Again, where Johnson is different to most normal situations is that normally there is solely one account holder with all four pieces of information listed (name, address, SSN, and DOB). Whereas Johnson had two alleged account holders, one a liable bankrupt with all four listed, and the other solely an authorized user with the two least important verifying factors [as seeker said, stuff you can find out in a phone book]. The question now is, would verifying these four pieces of information be enough to constitute a reasonable investigation under the FCRA where there is only one account holder? Or is it mandatory that the original contract must be retained to verify those 4 pieces of information, even though there could be no other account holder/liable party? Has a jury ruled on this yet? I don't know. But I do not believe that a court will require that the original contract must be in existance when there is only one party. And I know I am 100% correct and accurate when I make this statement: Johnson DOES NOT hold that a cc company must have the original contract in existance to verify a debt. It only needed an original contract to verify the liabilities of the debt under those particular facts and circumstances. We always want to spin the law in our favor, but we must also detach ourselves and look at it objectively as well, which is what I tried to do in Johnson.

Good luck to all.

-squirrels

[RickA]

After having read the case I can see where the credit card companies will either require the authorized party to come off of all four pieces of information or, not let allow for the availability for an authorized user.

Question squirrels. Your statement about not spinning this in our favor, but to look at it objectively. Are you saying that this case has, will or may change the requirement of credit card companies to not to have to provide the orignial contract?

RickA,

Can you rephrase the question? I'm not sure what you are asking as the question can be interpreted in more than one way.

-squirrels

[RickA]

squirrels, after having read, re-read and re-read again, my question had been answered.
As you have said, the Johnson case did not hold that the original had to be present to verify the debt(amount), it was never questioned.

Sorry for not having read carefully the first time.