ELAINE E. BUCKLO, District Judge.
Comes now, Williams, pro se', to timely submit to this Honorable Court[s] his "motion" for "judgment as a matter of law" in accords with the 2009 Amends of the Fed.R.Civ.P. Rule 50(a), which allows a party 28 days, instead of 10 days to submit a "JML" because Court[s] have reasoned that 10 days is inadequate to successfully prepare a "JML". The Court[s] decreed that "discovery" was concluded on February 22, 2016. As well, Fed.R.Civ.P Rule 6(a) does not allow for an extenstion beyond this time.
A Rule 50(a) motion is a motion that allows a party to a suit to challenge the legal sufficiency of the "evidence" presented and that such motions test whether there is a legal sufficient evidentiary basis for a reasonable jury to find for the "moving party". See Ruyle v. Continental Oil Co., 44 F.3d. 837, 841 (10
To date, Capital One has submitted a credit card application and an agreement that lacks Williams' signature. The customary way of "proving" an agreement with a "party" is by introducing into evidence a written agreement which is "signed" by the party in question. See Prima Facie Case 2 § 2. Even if this agreement was accepted by the Court[s] of this Nation, the "agreement" submitted by Capital One used words and language (substance) that states, "security agreement" and
Although Capital One has attached a document labeled "customer agreement",
Capital One has demonstrated unfair, unconscionable, and deceptive acts in as defined by FTC 5(a) and Dodd-Frank Act, by submitting "instrument of writings" in regards to discovery request in the form of a "security agreement" which is "inapplicable" to Williams for lack of "signature" and
Although the Fair Debt Collection Practice Act does not apply to "creditors" in most instances procuring an outstanding debt owed concerning consumers, this "reasoning, understanding and law" has since changed or has been amended according to the
In earlier stages of this litigation, the "Hiakala Court" prior to MDL 2416 transfer, struck down Plaintiff's claims of FDCPA and FTC 5(a) abuse; "Bucklo Court concurring". Explanation was FDCPA and FTC 5(a) denied with prejudice along with, "Bank argued "FDCPA" doesn't apply to a "creditor" and Williams can not bring a private cause of action under the FTC Act". Williams asserts, "reversal" of these rulings must be entertained or allowed for the sake of equity and justice because this very "abuse" has taken place in the "discovery" phase within the Honorable Court of Elaine E Bucklo.
In order to meet the threshold of CFPB requirement, the exception is when a "creditor" behaves in a unfair and deceptive manner, which would then allow the Fair Debt Collection Practice Act to apply to a "creditor's" action. However, the CFPB says, FDCPA applies in general to "creditors" now.
A violation depends solely on two factors (1) whether the debt "agreement" [emphasis added], explicitly authorizes the charge (2) whether the charge is permitted by law "Turner, 330 F.3d.
This or These actions by Capital One indicates a pattern as Williams turns this Court[s] attention to Wheeler v. Capital One (USA) N.A. et. al. Case
Capital One submitted a "security agreement" in response to Williams' "motion to compel" that is clearly
As well, any attorney who is in any proceeding before the Court[s] of Justice in which he appears as an attorney willfully misstates any proposition, or seeks to mislead the Court[s] in any matter of law is guilty of a "misdemeanor" in any trial thereof. If the defense be that the act was not willful
According to the law (FAS) 140, once an asset has been sold, the "lender" forever loses the right to the asset; once the asset is written off the debt is "discharged" since the owner of the asset received "compensation" for the "discharge" in the form of "tax credits" from the [IRS];
Once again Williams directs the Honorable Court[s] attention to the "security agreement" and "credit card application" submitted by Capital One without Williams "signature" which is in violation of UCC-904(2). Williams poses the following questions:
The record indicates. . . . by Capital One's response to Williams' "motion to compel" that Holloway & Moxley L.L.P.(debt buyer), had "authorization" to pursue Williams for an alleged debt owed. The Court[s] record also indicates that Capital One objected and denied any "knowing" of any lawsuit against Williams in 2010. [See Capital One's Response to Williams Complaint and Admission/Interrogatories]. Yet the question remains, "How could Holloway & Moxley L.L.P, "who purports to represent Capital One", or any "assignee" or "debt buyer" pursue Williams for an alleged debt in violation of the Telephone Consumer Protection Act if "security agreement" is "inapplicable" in accords with UCC-904(2) and debt was "charged-off" in 2008. See Exh-D2].
These credit card and debt collection practices by Capital One are unfair and deceptive in nature as defined by FTC 5(a) and violates UCC-904(2), Fair Debt Collection Practices Act 15 U.S.C. § 1692(f)(1), State Consumer Protection Laws and Telephone Consumer Protection Act 47 U.S.C. § 227 et. seq. which was created and designed to prevent and deter such behavior.
Documentation submitted by Capital One in reference to the "credit card application", "security agreement" and "billing statements" without Williams' signature is unfair and deceptive.
Under an account stated cause of action, Capital One must demonstrate, among other things, that Bank rendered an account statement to Williams, and that Williams assented to the amount stated in the account statement. Other than conclusory comments of Bank's counsel, Court[s] should deny any motions for summary judgment and Williams respectfully ask Court[s] to deny motion for summary judgment.
The account stated documents presented by Capital One appears to present an "acknowledgment" of the existing condition of liability between the parties. Rizkala v. Abusamara, 284, 303-7 Mass. An account stated cannot be made the "instrument" to create a liability where none before existed, but only determines the amount of a debt where liability exists. Chase v. Chase 191 Mass. 556, 562 (1902). A claim for an account stated requires either express or implied assent by the alleged "debtor" Williams of the amount claimed to be owed. See Milliken v. Warwick, 306 Mass. 192, 196 (1940); Meredith & Grew Inc., v. Worcester Lincoln L.L.C. 64 Mass.App.Ct. 142, 152-3 (2005). "The Supreme Judicial Court found, however, that the "rendition of an account and its' retention by the party to which it is sent without objection within reasonable time, presents a "jury" question whether the silence of the receiver of the account warrants an inference of the admission of its correctness. (emphasis added) Milliken at 197; See also, Braude & Margulies, P.C. v. Fireman's Fund Ins. Co., 468 F.Supp.2d.190 (D.D.C.2007) (Under claims for account stated, the "mere mailing of a bill and the recipient's silence do not reflect an agreement to pay). As the Milliken Court noted, the mere retention of the monthly account statements by Capital One presents a "jury" question as to whether Williams knowledge and retention and/or lack thereof of monthly bills demonstrated plaintiff's assent to an amount owed.
It is clear by Capital One's credit card and debt collection actions, that they assumed "authorization" to contact Williams on his cellular-device and by mail, despite that they have submitted to this Honorable Court[s] a "security agreement" that is "inapplicable" and lacks Williams "signature".
Williams initiated the "Bill-of-Review" CV13-135 for "Fraud on the Court" because Williams looked at the documentation submitted concerning his person, and found. . . ." no proof of assignment", "no customer agreement with his "signature", improperly served . . . [See State-Court Case #47-DV-2010-902072/Capital One denies State-Court Action concerning Williams Complaint and Admission/Interrogatories]. The "Bill-of-Review" was never a "lawsuit" because no "summons" was served upon Holloway & Moxley, (Debt Buyer), who purports to have represented Capital One, in accords with Ala.R.Civ.P 3(a) and 4(a). The amount of $128 million dollars is therefore irrelevant. After appeal to the Alabama Court of Civic Appeals, on May 22, 2015, Court[s] sent instructions to Circuit Court to "vacate' denial of Williams post-judgment relief and remove sanctions of attorney fees. Alabama Court of Criminal Appeals sent same order dated May 18, 2015. See Vacated Orders.
Court[s] finds it acceptable that after a case has been "vacated" the aggrieved party can commence suit for damages as a right.
In Williams attempt to address his grievance in State-Court action as a "pro se'", Williams came under the belief that Sovereignty would help him in resolving his dispute. In an apparent misapplication, sovereignty was of no avail, yet, sovereignty was never the issue or subject matter.
In re Boyd v. Nebraska, 143 U.S. 135 (1892) Supreme Court opined, "the words (People of the United States) and (Citizens) are synonymous terms and mean the same thing, they both describe the political body, who according to our Republic Institution, form the "Sovereignty" and hold the power and conduct the government thru representatives. They are what we familiarly call (Sovereign People); every citizen is one of these people and constituient member thereof. In other words, in this country, "Sovereignty" resides in the people
Williams is not, nor has been, nor attends to be a "deviant" or "extremist" that Capital One attempts to eloquently construe.
Capital One submitted a "security agreement" without Williams' "signature" in violation of UCC-904(2), which is unfair, deceptive and unreasonable and demonstrated debt collection practices that violated the Telephone Consumer Protection Act by:
As a direct and proximate result of collection activity and credit card practices of Capital One, Williams suffered actual damages, in the form listed in his
Capital One has demonstrated an overwhelming pre-ponderance of unfair and deceptive practices, breach of implied covenant of good faith and fair dealing
Williams has meritorious claim against Capital One and its' agents for their violation of Telephone Consumer Protection Act 47 U.S.C. § 227 et. seq. It is also evident that Bank has displayed unfair and deceptive credit card practices as defined by FTC 5(a), banking conduct and debt collection practices in Violation of Fair Debt Collection Practices Act 15 U.S.C. § 1692(f)(1) by submitting an
Williams seeks relief against Capital One on the grounds that it has provided to this court absolutely no evidence that any "credit card agreement' was entered into by "Williams", with his "signature", and that Capital One and its' agents, (debt buyer), Holloway & Moxley L.L.P., who claims to represent Capital One in State-Court action in 2010, had "authorization" to contact Williams on his "cellular-device" in violation of the Telephone Consumer Proctection Act 47 U.S.C. § 227 et. seq. for other than emergency purposes, has a legal claim to this debt, nor that they are entitled to equitable relief like (fees, interest and court costs). See In re Norfolk Financial Corporation v. MacDonald, 1533 Mass.App.Div. (2003).
The Court[s] should exercise its discretion to award double or treble damages in accordance with the laws and/or move this case to trial. Williams seeks $15 million dollars for his emotional distress, conscious pain and suffering and all other "damages" (including punative) recoverable, including fees and costs, together with interest and such other relief as this Honorable Court[s] may deem appropriate as Capital One has violated the Telephone Consumer Act 47 U.S.C. § 227 et. seq.. As well, Capital One has demonstrated unfair and deceptive practices in accords with FTC 5(a); under the FTC Act Title 15 U.S.C. § 45(a), consumer can receive "injunctive" relief and treble damages under the FTC umbrella in a private cause of action a penalty of ($110p/dy) under debt collection improvement act of 1996 as well as ($16,000 p/dy) penalty for each violation. Litigation has exceeded 6 years by Capital One's admission. [See Capital One's response to William's "motion to compel"]. For violations of the Fair Debt Collection Act 15 U.S.C. § 1692(f)(1), Williams is entitled to $1,000 per offence, costs and injunctive relief.
In concluding this judgment of law, in sum, the issue here is not that Williams was not furnished a credit card by the Bank, rather the issue here is how Capital One violated Federal Law thru "deceptive" measures by issuing credit cards to "consumers" with a "security agreement" that "consumers", like Williams, have not agreed to by way of signature in violation of UCC-904(2), and then pursue that "consumer", in violation of the Telephone Consumer Proctection Act 47 U.S.C. § 227 et. seq.
Capital One will argue that Williams consented to the "terms" and "conditions", however, this assertion fails on its face and does not take away from the fact that the Bank submitted an "inapplicable" security agreement as it relates to this case that clearly "evidence" Williams did not agree to by way of "signature" making whatever agreement "unenforceable" in accords with UCC-904(2). Therefore, Bank and third-parties have no "authorization" to seek remedies for alleged damages in the manner of (court costs, interest and fees).
It is also apparent by Bank's credit card practices by submitting an "inapplicable" security agreement, that Capital One clearly demonstrated unfair and deceptive acts and practices as defined by FTC 5(a) and has defied the Fair Debt Collection Practice Act 15 U.S.C. § 1692(f)(1).
Capital One's own admittance concerning
Furthermore, Bank's credit card practices in this case is not a single occurrence, for Williams turns this Court[s] attention to
This type of behavior by a "creditor" is the very reason "Congress" created the Fair Debt Collection Practice Act and Telephone Consumer Protection Act to deter actions that Capital One has demonstrated.
As a result of Bank's credit card and collection practices, it is clear, Williams, "consumer", has been injured and demands equity in the form of damages by granting all the relief requested herein and entitled to by law and as the Court[s] see fit.
Published: January 15, 2016
Share | Print This
Share Twitter Facebook Google+ StumbleUpon Email Pinterest Reddit
FacebookTwitterGoogle+PinterestEmailLinkedInRedditTumblrWordPressStumbleUpon Google GmailWhatsAppAlMAmazon Wish ListAOL MailApp.netBaiduBalatarinBibSonomyBitty BrowserBlinklistBlogger PostBlogMarksBookmarks.frBox.netBuddyMarksBufferCare2 NewsCiteULikeDeliciousDesign FloatDiary.RuDiasporaDiggdiHITTDiigoDZoneEvernoteFarkFlipboardFolkdGoogle BookmarksGoogle ClassroomHacker NewsHatenalnstapaperJamespotKakaoKindle ItKnownLineLiveJournalMail.RuMendeleyMeneameMixiMySpaceNetlogNetvouzNewsVi neNUjijOdnoklassnikiOknotizieOutlook.comPinboardPlurkPocketPrintPrintFriendlyProto page BookmarksPushaQzoneRediff MyPageRenrenSegnaloSina WeiboSiteJotSlashdotSMSStumpediaSvejoSymbaloo FeedsTelegramTuentiTwiddlaTypePad PostViadeoVKWaneloWebnewsWykopXINGYahoo BookmarksYahoo MailYahoo MessengerYoolinkYouMobYummlyAddToAnyFacebookTwitterGoogle+PinterestEmailLink edInRedditTumblrGoogle GmailAOL MailOutlook.comYahoo MailAny emailEmail app
SOURCE: WASHINGTON'S BLOG
ONE OF THE MAIN CAUSES OF OUR ECONOMIC PROBLEMS
The central banks of the United States, England, and German — as well as 2 Nobel-prize winning economists — have all shown that banks create money out of thin air . . . even if they have no deposits on hand.
The failure of most governments and most mainstream economists to understand this fact — they instead believe the myth that people make deposits at their bank, and these deposits are then lent out to new borrowers — is the main cause of our rampant inequality and economic problems.
But how do banks actually make loans before they have sufficient deposits on hand?
Economics professor Richard Werner — the creator of quantitative easing — noted in September that the field of economics has been lost in the woods for an entire century because it has failed to understand how banks actually create money.
Professor wrote an academic paper in 2014 concluding:
What banks do is to simply reclassify their accounts payable items arising from the act of lending as `customer deposits', and the general public, when receiving payment in the form of a transfer of bank deposits, believes that a form of money had been paid into the bank.
* * *
The `lending' bank records a new `customer deposit' and informs the `borrower' that funds have been `deposited' in the borrower's account. Since neither the borrower nor the bank actually made a deposit at the bank—nor, in connection with this transaction, anyone else for that matter, it remains necessary to analyse the legal aspects of bank operations. In particular, the legality of the act of reclassifying bank liabilities (accounts payable) as fictitious customer deposits requires further, separate analysis. This is all the more so, since no law, statute or bank regulation actually grants banks the right (usually considered a sovereign prerogative) to create and allocate the money supply. Further, the regulation that allows only banks to conduct such creative accounting (namely the exemption from the Client Money Rules) is potentially being abused through the act of `renaming' the bank's own accounts payable liabilities as `customer deposits' when no deposits had been made, since this is also not explicitly referred to in the banks' exemption from the Client Money Rules, or in any other statutes, laws or regulations, for that matter.
Professor Werner explained:
Although the implementation of banking services relies heavily on accounting, hardly any scholarly literature exists that explains in detail the accounting mechanics of bank credit creation and precisely how bank accounting differs from corporate accounting of non-bank firms.
* * *
It can be deduced that this ability of banks is likely derived from the operational, that is, accounting conventions and regulations of banking. These either differ from those of non-banks, so that only banks are able to create money, or else non-banks have missed out on the significant opportunities money creation may afford.
In order to identify the difference in accounting treatment of the lending operation by banks, we adopt a comparative accounting analysis perspective.
* * *
When the non-financial corporation, such as a manufacturer, grants a loan to another firm, the loan contract is shown as an increase in assets: the firm now has an additional claim on debtors — this is the borrower's promise to repay the loan. The lender purchases the loan contract, treated as a promissory note. Meanwhile, when the firm disburses the loan (and hence discharges its obligation to make the money available to the borrower), it is drawing down its cash reserves or monetary deposits with its banks. As a result, one gross asset increase is matched by an equally-sized gross asset decrease, leaving net total assets unchanged.
In the second case, of a non-bank financial institution, such as a stock broker engaging in margin lending, the loan contract is the claim on the borrower that is added as an asset to the balance sheet, while the disbursement of the loan — for instance by transferring it to the client or the stock exchange to settle the margin trade conducted by its client — reduces the firm's monetary balances (likely held with a bank). As a result, total assets and total liabilities remain unchanged.
While the balance sheet total is not affected by the granting and disbursement of the loan in the case of firms other than banks, the picture looks very different in the case of a bank. While the loan contract shows up as an increase in assets with all types of corporations, in the case of a bank the disbursement of the loan . . . appears as a positive entry on the liability side of the balance sheet, as opposed to being a negative entry on the asset side, as in the case of non-banks. As a result, it does not counter-balance the increased gross assets. Instead, both assets and liabilities expand. The bank's balance sheet lengthens on both sides by the amount of the loan (see the empirical evidence in Werner, 2014a and Werner, 2014c). Thus it is clear that banks conduct their accounting operations differently from others, even differently from their near-relatives, the non-bank financial institutions.
* * *
Surprisingly, we find that unlike the other firms whose balance sheets shrank back in Step 2, the bank's accounts seem in standstill, unchanged from Step 1. The total balance sheet remains lengthened. No balance is drawn down to make a payment to the borrower.
So how is it that the borrower feels that the bank's obligation to make funds available are being met? (If indeed they are being met). This is done through the one, small but crucial accounting change that does take place on the liability side of the bank balance sheet in Step 2: the bank reduces its `account payable' item by the loan amount, acting as if the money had been disbursed to the customer, and at the same time it presents the customer with a statement that identifies this same obligation of the bank to the borrower, but now simply re-classified as a `customer deposit' of the borrower with the bank.
The bank, having `disbursed' the loan, remains in a position where it still owes the money. In other words, the bank does not actually make any money available to the borrower: No transfer of funds from anywhere to the customer or indeed the customer's account takes place. There is no equal reduction in the balance of another account to defray the borrower. Instead, the bank simply re-classified its liabilities, changing the `accounts payable' obligation arising from the bank loan contract to another liability category called `customer deposits'.
While the borrower is given the impression that the bank had transferred money from its capital, reserves or other accounts to the borrower's account (as indeed major theories of banking, the financial intermediation and fractional reserve theories, erroneously claim), in reality this is not the case. Neither the bank nor the customer deposited any money, nor were any funds from anywhere outside the bank utilised to make the deposit in the borrower's account. Indeed, there was no depositing of any funds.
In Step 1 the bank had a liability — an obligation to pay someone. How can it discharge this liability? A law dictionary states:
"The most common way to be discharged from liability . . . is through payment."
And yet, no payment takes place in Step 2 (and hence in the entire `lending' process), which is why the bank's balance sheet in total remains stuck in Step 1, when all lenders still owe the money to their respective borrowers. The bank's liability is simply re-named a `bank deposit'. However, bank deposits are defined by central banks as being part of the official money supply (as measured in such official `money supply' aggregates as M1, M2, M3 or M4). This confirms that banks create money when they grant a loan: they invent a fictitious customer deposit, which the central bank and all users of our monetary system, consider to be `money', indistinguishable from `real' deposits not newly invented by the banks. Thus banks do not just grant credit, they create credit, and simultaneously they create money.
* * *
Instead of discharging their liability to pay out loans, the banks merely reclassify their liabilities originating from loan contracts from what should be an `accounts payable' item to `customer deposit'(in practise of course skipping Step 1 entirely and thus neglecting to record the accounts payable item). The bank issues a statement of its liability to the borrower, which records its liability as a `deposit' of the borrower at the bank.
* * *
What enables banks to create credit and hence money is their exemption from the Client Money Rules. Thanks to this exemption they are allowed to keep customer deposits on their own balance sheet. This means that depositors who deposit their money with a bank are no longer the legal owners of this money. Instead, they are just one of the general creditors of the bank whom it owes money to. It also means that the bank is able to access the records of the customer deposits held with it and invent a new `customer deposit' that had not actually been paid in, but instead is a re-classified accounts payable liability of the bank arising from a loan contract.
* * *
What makes banks unique and explains the combination of lending and deposit-taking under one roof is the more fundamental fact that they do not have to segregate client accounts, and thus are able to engage in an exercise of `re-labelling' and mixing different liabilities, specifically by re-assigning their accounts payable liabilities incurred when entering into loan agreements, to another category of liability called `customer deposits'.
What distinguishes banks from non-banks is their ability to create credit and money through lending, which is accomplished by booking what actually are accounts payable liabilities as imaginary customer deposits, and this is in turn made possible by a particular regulation that renders banks unique: their exemption from the Client Money Rules. [Werner gives a concrete example on British law for banking and non-banking institutions.]
* * *
It would appear that those who argue that bank regulations should be liberalised in order to create a level playing field with non-banks have neglected to demand that the banks' unique exemption from the Client Money Rules — a regulation benefitting only banks — needs to be deregulated as well, so that banks must also conform to the Client Money Rules.
* * *
Alternatively, one could argue that it would level the playing field, if the banks' current exemption from the Client Money Rules was also granted to all other firms — in other words, if the Client Money Rules themselves were abolished. This would allow all firms to also engage in the kind of creative accounting that has become an established practise among banks. It would certainly ensure that competition between banks and non-bank financial institutions would become more meaningful, since the exemption from the Client Money Rules, together with the banks' deployment of this exemption for the purpose of re-labelling their liabilities, has given significant competitive advantages to banks over all other types of firms: banks have been able to create and allocate money — virtually the entire money supply in the economy — while no other firm is able to do the same.
* * *
Basel rules were doomed to failure, since they consider banks as financial intermediaries, when in actual fact they are the creators of the money supply. Since banks invent money as fictitious deposits, it can be readily shown that capital adequacy based bank regulation does not have to restrict bank activity: banks can create money and hence can arrange for money to be made available to purchase newly issued shares that increase their bank capital. In other words, banks could simply invent the money that is then used to increase their capital. This is what Barclays Bank did in 2008, in order to avoid the use of tax money to shore up the bank's capital: Barclays `raised' £5.8 bn in new equity from Gulf sovereign wealth investors — by, it has transpired, lending them the money! As is explained in Werner (2014a), Barclays implemented a standard loan operation, thus inventing the £5.8 bn deposit `lent' to the investor. This deposit was then used to `purchase' the newly issued Barclays shares. Thus in this case the bank liability originating from the bank loan to the Gulf investor transmuted from (1) an accounts payable liability to (2) a customer deposit liability, to finally end up as (3) equity — another category on the liability side of the bank's balance sheet. Effectively, Barclays invented its own capital. This certainly was cheaper for the UK tax payer than using tax money. As publicly listed companies in general are not allowed to lend money to firms for the purpose of buying their stocks, it was not in conformity with the Companies Act 2006 (Section 678, Prohibition of assistance for acquisition of shares in public company). But regulators were willing to overlook this. As Werner (2014b) argues, using central bank or bank credit creation is in principle the most cost-effective way to clean up the banking system and ensure that bank credit growth recovers quickly. The Barclays case is however evidence that stricter capital requirements do not necessary prevent banks from expanding credit and money creation, since their creation of deposits generates more purchasing power with which increased bank capital can also be funded.
In other words, banks have been granted a loophole — not available to other businesses — to use a fiction that the banks' liabilities are really assets — which has given them a huge competitive advantage over everyone else.
No wonder banks now literally own the country . . . including the entire political system.
But why don't mainstream economists understand how banks actually create money?
Economics professor Steve Keen explained last week in Forbes:
In any genuine science, empirical data like this would have forced the orthodoxy to rethink its position. But in economics, the profession has sailed on, blithely unaware of how their model of "banks as intermediaries between savers and investors" is seriously wrong, and now blinds them to the remedy for the crisis as it previously blinded them to the possibility of a crisis occurring.
A wit once defined an economist as someone who, when shown that something works in practice, replies "Ah! But does it work in theory?"
Mainstream economic models are fundamentally wrong. The theories taught in economics programs are riddled with errors. For example, they don't take into account such basic factors as private debt.
That's why the 2008 crash happened . . . and that's why the economy is heading south now.
So things are going to get worse and worse until the actual manner in which money and credit are created is taken into account.
By
Law 360, New York (October 16, 2012, 4:58 PM ET) — Capital One Bank USA NA was hit with a putative class action in Pennsylvania federal court on Friday that claims the bank knowingly used false and inapplicable credit card agreements to pursue debt collections against its cardholders.
The suit filed in Pennsylvania's Eastern District claims that Capital One is directing third-party collection attorneys to pursue actions against cardholders using customer agreements that were created years after the credit cards were originally issued, a violation of the Fair Debt Collection Practices Act, as well as state consumer protection laws.
"It is clearly impossible for an original contract dated after the date of a credit card issuance to act as the governing agreement between the parties, except as an amendment or modification of the original contract," the complaint said. "Yet, as this complaint will substantiate, Capital One has committed to writing and has disseminated to its national collection attorney base its instruction and authorization to all of its collection attorneys throughout the United States of America to use its false contracts as the governing contracts for credit card holders who are the subject of collection efforts."
Named plaintiff Robert Wheeler applied for and was issued a Capital One credit card in 2004, according to the complaint.
In August, Wheeler was sued in Pennsylvania state court by Nudelman Klemm & Golub PC, a New Jersey law firm representing Capital One that sought collection of an alleged defaulted credit card payment in 2009. Capital One had originally sued Wheeler in small claims court, but Wheeler won, according to the complaint.
However, the customer agreement submitted by the firm that it accused Wheeler of breaching was dated the year 2010. Both the customer agreement and the state court complaint indicate that it is not an amendment or modification to any prior agreement, the complaint said.
Therefore, Nudelman, Klemm & Golub are trying to collect a debt that allegedly resulted from a credit card issued in 2004 and defaulted in 2009 by using a customer agreement issued in 2010, Wheeler's complaint said.
Collection agencies and financial institutions have been hit with several recent suits in the Eastern District of Pennsylvania over these collection practices, including a 2011 suit against Capital One that is still pending, according to the complaint. That shows that the bank and its collection attorneys systematically use false documentation to support alleged contractual obligations asserted against consumers they have sued in order to collect alleged debt, the complaint said.
"These wrongful collection activities are intended by the defendants to secure collection from those whom the United States Congress has defined as the `least sophisticated consumer,'" the complaint said.
The suit, which also names Nudelman Klemm & Golub, seeks to establish a class of Capital One cardholders who have been the subject of debt collection suits in which the bank has used the customer agreements as evidence.
Capital One has faced plenty of recent scrutiny over its card practices. In July, the bank agreed to pay $210 million to settle deceptive credit care marketing allegations made by the
Under a pair of consent decrees, Capital One agreed to reimburse up to 2.5 million customers a total of $150 million for deceptive marketing of so-called add-ons to credit cards as well as unfair billing practices. All but $10 million of the $150 million total will go to 2 million consumers with low credit scores that were either pressured into purchasing or given false information regarding payment protection, credit monitoring and other add-ons to their cards.
On top of the $150 million in restitution to customers, Capital One agreed to pay a $25 million fine to the CFPB and a $35 million fine to the OCC.
Capital One is also facing multidistrict litigation accusing it of illegally manipulating debit card transactions to collect hundreds of millions of dollars in excessive overdraft fees, in violation of its contracts and state consumer protection laws.
A representative for Capital One couldn't immediately be reached for comment Tuesday.
Wheeler is represented by Stuart A. Eisenberg and Carol B. McCullough of McCullough Eisenberg LLC.
Counsel information for the defendants wasn't immediately available Tuesday.
The case is Wheeler v. Capital One Bank USA NA et al., case number
— Additional reporting by Evan Weinberger. Editing by Katherine Rautenberg.
FEBRUARY 26TH, 2009
I've been enjoying the wonderful blog by SJ Mills at
Mr. Mills was sued by Pressler and Pressler, who named "Capital One" as the Plaintiff in the case. It turns out that Cap One no longer owned the account which was the subject of the lawsuit, but had charged it off. During the court proceedings,
And then there is this; if AMERTRAK or TRAKAMERICA are "handling" the account as stated, then Pressler & Pressler are actually collecting for AMERTRAK or TRAKAMERICA and NOT Capital One Bank like they sued me for over a year in the Bergen County Civil Court; thus proving FRAUD upon the Court and have committed fraud by attempting collection in a name other than the original supposed account holder.
I published a
I'm cheering for Mr. Mills, who has filed a lawsuit for fraud and harassment, among other things, in the New Jersey courts against Capital One, Pressler and Pressler, and various other persons. The case is not decided yet, but you can get tabs on his progress and read his voluminous accounts of his encounters from start to finish.
07.11.13
On July 10, 2013, all financial institutions that are regulated under the Dodd-Frank Act and collect debts, whether as original creditors or as legally-defined debt collectors, were put on notice by the CFPB that they are now subject to the requirements of current federal debt collection law. In two "bulletins" issued by the CFPB, the CFPB went a long way toward eradicating decades of Fair Debt Collection Practices Act (FDCPA) precedent, which unambiguously holds that original creditors are not debt collectors and, thus, are not subject to Federal regulation under the FDCPA. The CFPB has taken the position that its general authority to prevent "unfair, deceptive or abusive acts or practices" (UDAAP) applies to debt collection, and has announced that the type of conduct barred under UDAAP is analogous to conduct subject to enforcement under the FDCPA.
Indeed, Director Richard Cordray stated that "these bulletins make clear that it doesn't matter who is collecting the debt — unfair, deceptive or abusive practices are illegal." Based on this statement and the CFPB's latest guidance, any original creditor, while not explicitly subject to the FDCPA, therefore, is essentially subject to FDCPA-like supervision and examination by the CFPB.
Many financial institutions subject to the Dodd-Frank Act collect their own debts and are not subject to the FDCPA. With the CFPB's newest declaration regarding non-FDCPA entities — i.e., banks and other financial institutions within the scope of the CFPB supervisory/enforcement jurisdiction — the entire legal landscape of federal regulation of debt collection has changed. Federal debt collection law now applies to all consumer debt collection activities conducted by any financial institution regulated by the Dodd-Frank Act.
The first of the two debt collection industry bulletins issued by the CFPB yesterday is primarily concerned with the prohibition of unfair, deceptive, or abusive acts or practices in the collection of consumer debts. The CFPB specifically provides that "[a]lthough the FDCPA's definition of `debt collector' does not include some persons who collect consumer debt, all covered persons and service providers must refrain from committing [unfair, deceptive, or abusive acts or practices] in violation of the Dodd-Frank Act."
The CFPB also explains that it considers an act or practice to be "unfair" if it "causes or is likely to cause substantial injury to consumers," which can include acts that lead to emotional injuries. The CFPB enumerates several specific examples of UDAAP violations including:
Collecting or assessing a debt not expressly authorized by the agreement or permitted by law (including interest, fees, and charges);
Failing to post payments timely or properly;
Taking possession of property without the legal right to do so;
Revealing the consumer's debt, without the consumer's consent, to the consumer's employer and/or co-workers;
Falsely representing the character, amount, or legal status of the debt;
Misrepresenting that a debt collection communication is from an attorney;
Misrepresenting whether information about a payment or non-payment would be furnished to a credit reporting agency; Misrepresenting to consumers that their debts would be waived or forgiven if they accepted a settlement offer; and
Threatening any action that is not intended.
These concerns essentially replicate many of the requirements imposed upon debt collectors by the FDCPA and signal that the CFPB intends to transfer FDCPA requirements from the debt collector world onto original creditors through use of its UDAAP authority over original creditors.
In its second bulletin, the CFPB provides additional guidance regarding certain deceptive claims and representations that creditors, debt buyers and third-party debt collectors may make in the course of collecting debts in an effort to persuade consumers to pay. Again, this bulletin is directed not only at entities subject to the jurisdiction of the FDCPA but also at original creditors. The CFPB identified four problematic types of representations, which include statements regarding the relationship between:
The CFPB does explain that such representations are likely to be important to consumers and their future access to debt. As a result, the CFPB views these types of potentially deceptive claims as a matter of "significant concern." While these concerns are subject to FDCPA regulation, original creditors must now be explicitly mindful of them, based on the CFPB's guidance.
The CFPB appears to be setting a new standard through regulatory guidance: that is, original creditors should now view the FDCPA requirements as essentially being applicable to them.
Troutman Sanders is an accomplished and experienced leader in providing litigation and regulatory advice to a broad spectrum of financial services institutions. Troutman Sanders' CFPB Team monitors the development and activities of the CFPB on its
© TROUTMAN SANDERS LLP. ADVERTISING MATERIAL. These materials are to inform you of developments that may affect your business and are not to be considered legal advice, nor do they create a lawyer-client relationship. Information on previous case results does not guarantee a similar future result.
