Chase Bank USA, N.A. filed a credit card collection lawsuit against a Volusia County, Florida consumer during 2010 in a case arising from some very unusual facts.
The consumer admitted that she accepted Chase’s offers for two “zero interest” credit cards.
Chase filed a credit card collection lawsuit consisting of one count which alleged that she owed $ 14,931.25 under an “Account Stated” cause of action. In Parricai Farley v. Chase Bank, USA, N.A., the Florida District Court of Appeal for the Fourth Circuit, held that “when an account statement has ‘been rendered to and received by one who made no objection thereto within a reasonable time,’ a prima facie case for the correctness of the account and the liability of the debtor has been made’.” The Farley court further explained that the defendant borrower may overcome this presumption by “meeting the burden of providing fraud, mistake or error” in the account. So, the consumer faced what is usually a very steep uphill struggle to overcome the presumption.
The bench trial on November 17, 2010, before the Honorable Shirley A Green exposed what appear to be systemic errors in Chase’s electronic record keeping system.
Chase called the consumer as its first witness. It is not unusual for creditors and debt collectors to attempt to prove up their case through the consumer’s testimony.
The consumer testified that she did not remember receiving the statements that Chase attached to its complaint as the basis for its account stated cause of action.
More importantly, the consumer testified that she reviewed the Chase’s account statements and other documents. The statements contained “inaccurate information including incorrect address for her resident at the time they were sent.” The consumer’s testimony explained that the addresses shown on Chase’s statements produced for trial contained an address where no building existed on the date shown on the documents. Other documents contained blanks where consumer’s address should appear. Other documents contained “Sample A. Sample, 1234 Main Street, Anytown, USA 00000″ where a name and address should appear.
On cross examination by her counsel, the consumer testified that both of her Chase accounts were “zero interest” accounts and that she did not remember receiving a notice of change of terms notifying her that Chase intended to increase the interest rates on her accounts. Consumer testified that she did not remember receiving documents entitled “Important Notice for Credit Card Customers about Changes to Your Cardmember Agreement” and “Important Information Regarding Changes to Your Account and Your Rights to Reject Charges.”
Consumer further testified that she had personally calculated the balance of both accounts and that the amount she owed was $ 85.22. The consumer had paid substantial amounts which were all to be credited to her account which legally remained a “zero interest” account.
The consumer volunteered that she would not object to a judgment against her in the amount of $ 85.22.
Chase also called Michelle Donaldson, and sought to have documents presented at trial admitted as business records under Florida’s business record exception to the hearsay rule.
During voir dire, Ms. Donaldson stated that she worked for “Chase” but was unable to state whether she worked for Chase Bank USA, N.A., or Chase Bankcard Services, Inc. Ms. Donaldson testified that Chase did not have a hard copy or physical paper file of the account records but rather that Chase’s records were computerized. Ms. Donaldson admitted that she did not input any of the information concerning the account into Chase’s computerized system. Ms. Donaldson further admitted that she lacked personal knowledge of Chase’s procedures for inputting any of the information into Chase’s computer nor could she produce any manuals or written policies explaining the procedure or policy of how the customer information was inserted into the computer. Nor did Ms. Donaldson know whether Chase’s computer system now being used was being used when the account was opened and at the time the credit card charges were made and if or how the data was converted to a new system. Finally, Chase’s witness admitted that she did not have personal knowledge of the reliability of the computer system or the audit procedure used to assure the integrity of the computerized records.
The consumer’s lawyer, Mr. Leonard Cabral, timely objected to the admission of Chase’s documents and the court sustained the consumer’s objections that Chase’s documents were hearsay. The court reviewed the requirements of Florida’s business records exception to the hearsay rule which authorizes the court to admit documents made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity and if it was the regular practice of that business activity to make such memorandum, report, record, or data compilation all as shown by the testimony of the custodian or other qualified witness, unless the sources of information or other circumstances show lack of trustworthiness. Florida Statutes, Section 90.803.
The court found that the records Chase proffered into evidence were not made in the ordinary course of Chase’s business but, rather , were created for the trial. The court also found that Chase’s records lacked trustworthiness and were not admissible. Because Chase’s records lacked trustworthiness, Chase’s witness could testify only upon matters that she had personal knowledge of. Ms. Donaldson was truthful that she did not have the personal knowledge required by the Court.
The Court entered judgment in the amount of $ 85.22 against the consumer and in favor of Chase Bank USA, N.A. despite their objection.
In the Volusia County, Florida credit card lawsuit, the inference is that Chase’s system produces documents for trial bearing the cardholder’s address which is current when the documents are printed out. Chase’s records concerning the mailing of any account documents or statements are to say the least “suspect”.
Chase remains under investigation by the United States Securities Exchange Commission arising from Linda Almonte’s (a former Chase manager) whistleblower suit alleging that as many as 20 percent of Chase Bank’s so-called “judgment accounts” failed Chase Bank’s internal tests for accuracy but were nevertheless sold to a debt buyer, DebtOne LLC. Ms. Linda Almonte also alleged that Chase’s paper and computer records were frequently unreliable. Although Ms. Almonte settled her wrongful discharge lawsuit in Texas courts, her SEC whistleblower complaint remains active.
Chase Bank also acquired the credit card operations of Washington Mutual and, with WaMu, the Providian credit card portfolio where Martha Kunkle (allegedly a deceased employee) robo-signed affidavits for junk debt buyers to use in credit card collection lawsuits. Probably as a result of the Martha Kunkle controversy, Chase has dismissed thousands of collection cases nationwide and has announced plans to close down its in house collection law operations including in Florida.
Junk debt buyers and collection lawyers count on consumers not knowing their rights.
Hiring an experienced Florida lawyer to defend you against a credit card collection lawsuit is often much more affordable than consumers assume.
If you live in central Florida —- Orange County, FL (Orlando, Ocoee, Winter Park), Osceola County, FL (Kissimmee, St. Cloud, Celebration, Buena Ventura Lakes), Lake County, FL (Clermont, Mount Dora, Eustis, Leesburg, Tavares, Monte Verde, Howey-In-The-Hills), Marion County, FL (Ocala, The Villages), Putnam County, FL (Palatka), Flagler County (Palm Coast, Bunnell), Volusia County (DeLand, Daytona, Daytona Beach, Deltona, New Smyrna Beach), Seminole County, FL (Altamonte Springs, Winter Park, Longwood, Lake Mary, Sanford, Heathrow, Oviedo), Polk County, FL (Lakeland, Bartow), Hillsborough (Tampa) — you are welcome to contact my assistant or complete the Collection Agency Harassment form. I will contact you to discuss your situation — a free (to you) no obligation attorney review of the credit card lawsuit pending against you and your potential cases against collection agencies and bill collectors.
Please be realistic and contact me well before any “court date” or response is due.
(C) 2011 Donald E. Petersen
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