Credit card account non-transferability authorities

roozer · #1 03-19-2006, 12:22 AM

Hello Everyone:

I've seen various references and claims, especially in debt elimination programs, that credit card accounts are non-transferable, supposedly because they are a continuing series of offer. Conforth makes this claim in his "Beating Up On Debt Collectors", but provided no authoritative support.

Can anyone provide just one authority in support of this stance? Caselaw, code, regulation, rule, other? No, we can't rely on the Instrument itself, it is the thing in question and we certainly can't rely on some other party's agreement either.

I see debt collectors blatantly claiming and displaying on their sites that they acquire/purchase debts and 'debt receivables', etc. and then go pursuing consumers with CHARGED-OFF accounts.....and WIN! Now, of course they exercise their 'words of art' expertise and while never claiming that they 'acquire VISA/MASTERCARD credit card accounts', they pretty much convey that impression to the sheeples/sleeples. (Hhmmm! Interesting how 'sleep' and 'sheep' differ by only one letter).

So, shoot me off something please..... anything.....as soon as possible.

Respect to all and continue holding the fort.
Roozer

Judge Roy Bean · #2 03-19-2006, 08:52 AM

Quote:

Originally Posted by roozer

....I see debt collectors blatantly claiming and displaying on their sites that they acquire/purchase debts and 'debt receivables', etc. and then go pursuing consumers with CHARGED-OFF accounts.....and WIN!

Routinely. The charged off account is simply no longer of any interest to the original creditor - hence, it is no longer on their books. The debt is not extinguished, it is sold to another party.

Quote:

Originally Posted by roozer

....Now, of course they exercise their 'words of art' expertise and while never claiming that they 'acquire VISA/MASTERCARD credit card accounts', they pretty much convey that impression to the sheeples/sleeples. (Hhmmm! Interesting how 'sleep' and 'sheep' differ by only one letter).

This is hardly a revelation, let alone new news. But there are no words of art. It's blatantly simple. The original creditor doesn't want to expend the resources to try and collect blood from turnips. There are people who specialize in doing that, and they buy those debts (for pennies on the dollar) and try to collect on them.

Quote:

Originally Posted by roozer

....So, shoot me off something please..... anything.....as soon as possible.

Respect to all and continue holding the fort.
Roozer

truth4all · #3 03-19-2006, 11:50 AM

Quote:

Originally Posted by Judge Roy Bean

Routinely. The charged off account is simply no longer of any interest to the original creditor - hence, it is no longer on their books. The debt is not extinguished, it is sold to another party.

This is hardly a revelation, let alone new news. But there are no words of art. It's blatantly simple. The original creditor doesn't want to expend the resources to try and collect blood from turnips. There are people who specialize in doing that, and they buy those debts (for pennies on the dollar) and try to collect on them.

Oh yeah Bean? How come the bank sends a 1099 C that says right on its face Cancellation of Debt ?
Notice he didn't address the continuing series of offers to contract either!
I have seen third party debt collectors intimidating an alleged debtor IN COURT when the bank has sent a 1099C !
Take the copy of the 1099C into the Judge and tell him to take it up with the IRS because the IRS is claiming a superior lein on that "alleged debt". Ask where the OMB numbers are too while you're at it !
Know the case law on that one Bean?

truth4all · #4 03-19-2006, 12:01 PM

Case Style: Citibank (South Dakota) N.A., A Bank Corporation, Plaintiff/Respondent v. Danny H. Whiteley, Defendant/Appellant.

Case Number: 25925

Handdown Date: 11/23/2004

Appeal From: Circuit Court of Ripley County, Hon. Paul McGhee

Counsel for Appellant: Daniel T. Moore

Counsel for Respondent: Mayer S. Klein and Michael J. Payne

Opinion Summary: None

Citation:

Opinion Author: John E. Parrish, Presiding Judge

Opinion Vote: REVERSED AND REMANDED WITH DIRECTIONS. Shrum and Barney, JJ., concur

Opinion:

Citibank (South Dakota) N.A., (plaintiff) brought a suit on account against Danny H. Whiteley (defendant). The case was heard by the trial court without a jury. Judgment was entered for plaintiff in the amount of $4,218.58 principal, interest in the amount of $728.14, and costs. Defendant appeals. This court reverses and remands with directions.
Plaintiff's petition alleged defendant was "indebted to it on account of goods, services and/or merchandise provided by Plaintiff at Defendant's instance and request"; that "[t]he charges for said goods, services and/or merchandise provided by Plaintiff to Defendant [were] reasonable." Plaintiff alleged that payment was demanded but had been refused. (FN1)
Plaintiff called an employee, Paula Sullinger, as a witness. Ms. Sullinger stated she was "a manager in the recovery unit" located in Kansas City. Ms. Sullinger identified plaintiff as a banking corporation authorized to do business in Missouri. Ms. Sullinger testified, over the objection of defendant, that although there was no documentation of a credit card account, she had knowledge that defendant maintained a credit card account with plaintiff. She testified, over the objection of defendant, that an account maintained by plaintiff revealed a balance owed by defendant. Ms. Sullinger explained, again over defendant's objection, that charges were posted to accounts based upon notification by merchants of charges made by a cardholder; that any documentation for a charge belonged to the merchant and was not maintained by plaintiff.
Ms. Sullinger was asked whether she had knowledge about what goods were purchased by defendant for which charges were made to the account plaintiff sought to collect. She had no knowledge concerning what defendant would have purchased from a particular merchant. Ms. Sullinger had no knowledge whether charges were fair and reasonable. No other evidence was offered on the question of reasonableness of charges.
Ms. Sullinger was asked the following questions and gave the following answers about the nature of plaintiff's business.

Q. My question is, you, being Citibank of South Dakota, didn't provide any merchandise, did you?

A. No.
Q. You didn't provide any goods to the defendant, did you?
A. No, just a service.

Q. And you didn't come out and perform any services for the defendant and charge him for that, did you?

A. No, just paid the merchants for him.
Defendant asserts one point on appeal. He argues the trial court erred in granting judgment for plaintiff on its suit on account "because there was no evidence to support the judgment in that [plaintiff] failed to prove that [defendant] received any goods, services or merchandise provided by [plaintiff]." Defendant contends further that there was no evidence that anything plaintiff claims defendant received was reasonable in cost. Defendant further asserts that any theory of recovery plaintiff may assert, other than the suit on account it pleaded, would constitute a variance to which plaintiff timely objected at trial.
"A suit on open account means a suit in contract for each purchase transaction." Medicine Shoppe International, Inc. v. Mehra, 882 S.W.2d 709, 713 (Mo.App. 1994). To recover on a suit on account, a plaintiff must show an offer, an acceptance, and consideration between the parties as well as the correctness of the account and the reasonableness of the charges. Welsch Furnace Co, Inc. v. Vescovo, 805 S.W.2d 727, 728 (Mo.App. 1991). "Such evidence consists of proof that: 1) Defendant requested plaintiff to furnish merchandise or services; 2) plaintiff accepted the offer of the defendant by furnishing such merchandise or services; and 3) the charges were reasonable." Id.
Even if this court were to accept plaintiff's assertion that providing credit to a credit card holder amounted to providing a service for purposes of maintaining a suit on account, an issue this court need not and does not address, the evidence was silent as to the reasonableness of any charge that was made to defendant. A party bringing a cause of action cannot prevail if one or more elements of the cause of action are not supported by substantial evidence. Vintila v. Drassen, 52 S.W.3d 28, 38 (Mo.App. 2001); Mills Realty, Inc. v. Wolff, 910 S.W.2d 320, 322 (Mo.App. 1995). Further, as asserted by defendant, defendant scrupulously objected throughout the trial to any evidence that was outside plaintiff's pleadings. Defendant's point is granted. The judgment is reversed. The case is remanded. The trial court is directed to enter judgment for defendant.

Footnotes:

FN1. Plaintiff's attorney assured the trial court at the commencement of trial that plaintiff had no credit card agreement signed by defendant; that plaintiff was "suing on an account theory, suit on account."

#5 03-19-2006, 12:05 PM

I will share my opinion based on Florida, because I am not familiar enough with other states. I could be wrong but here goes: Credit card accounts are in fact transferable. Whether that transfer holds up in court is another kettle of fish. Assuming that the debt is in default at the time of transfer and within SOL. First, the Junk Debt Buyer must send a notice of assignment to the debtor within thirty days of purchase. This is usually done in the form of a collection letter but it must detail the amount, original creditor, charge-off or default date and effective date of transfer-they rarely do this. If you are ever sued by a JDB pursuant to an assignment, they will have to (if you ask) show proof of the assignment (agreement & bill of sale); show all of your signed account documents and show itemized statements from open to closing of the account. If they are successful, they are only entitled to interest from the date of purchase on the amount they paid. They usually sue for breach of contract, account stated, money lent and quantum meruit. All of which are very hard to sustain on an assigned credit card account. Essentially all of these COAs are actions in equity, so eventually they will have to prove the exact amount they are out. Also, since they do not have a contract with you, they cannot recover attorney's fees from you. They will state in their suit " if resolved by default, attorney's fees = $xxxx" this is done for the obvious purpose of sticking to the ones that don't show (90%) BTW-Since they paid pennies on the dollar for your account.........well, you get the idea.

Judge Roy Bean · #6 03-19-2006, 12:23 PM

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