Legal Aid Client Prevails in Debt Collection Matter by Demanding Compliance with Proof Requirements
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Jen Ngai Lavellee, Staff Attorney

As a result of Legal Aid’s advocacy, a plaintiff debt collector recently agreed to dismiss a case against one of our clients that sought in excess of $10,000 in alleged debt, fees, and interest from credit card charges she allegedly made many years prior.

Ms. B came to Legal Aid because she had been sued for over $10,000 by a company that she did not recognize. The complaint stated that the lawsuit was based on her nonpayment of an old credit card debt and sought to collect that balance plus interest and attorney’s fees. Ms. B did not dispute having owned the credit card at issue, and she admitted that she had fallen behind on her payments several years ago after suffering a stroke. But she was not sure of the actual balance on the account, nor did she did not recognize the plaintiff as the same company that had issued the credit card to her decades ago. Because Ms. B’s only sources of income were social security and her small pension, she could not afford to pay anything on the debt. Ms. B. came to Legal Aid fearful of what would happen to her as a result of the lawsuit.

Legal Aid entered the case and asked the plaintiff -- a debt-buyer company that purchases bad debts -- for proof that it was the owner of Ms. B’s credit card account. In response, the plaintiff produced a series of documents intended to show that Ms. B’s credit card debt had been assigned or sold three different times in order to get from the original creditor to the plaintiff. However, the documentation did not identify Ms. B’s account, but instead showed only that hundreds or thousands of unidentified accounts were sold at once. It also contained dates that did not make sense with the alleged chronology of sales, and the plaintiff refused to include any of the actual assignment agreements.

Legal Aid argued to the Court that the problems with plaintiff’s documentation showed that it could not in fact prove it was the true owner of Ms. B’s credit card account and therefore lacked the legal standing to sue her on the debt. Legal Aid explained that ownership of the account was a critical issue, because if Ms. B paid the plaintiff to settle or otherwise satisfy the debt and a different company revealed itself as the true owner, Ms. B would suffer duplicate liability on the same debt. Legal Aid argued that allowing the plaintiff to move forward with the case and try to recover from Ms. B under the circumstances would be both unfair and legally incorrect.

At a pre-trial hearing before the judge, Legal Aid stressed in particular that the plaintiff’s documents presented serious reliability issues and that the plaintiff would not be able to present sufficient evidence at trial to prove its case. Both parties and the judge agreed that a decision in the case could have a significant impact on the standards of proof required of debt-buyer companies in the District of Columbia. After oral arguments in front of the judge were complete, the plaintiff opted to dismiss the case against Ms. B rather than proceed to trial, and it promised never to sue her on the same debt again.

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