Limiting Common Sense Communication One Credit Card Contract at a Time

David Ashe

John Smith obtained a credit card. He asked for it and he used it when he needed it. Then, life got in the way and the card was closed for non-payment with the unpaid balance remaining.

His credit score is now blemished, default penalties are likely, and so is the inescapable element of embarrassment. Does the arrival of the debt collector portend additional pain or needed relief for the debtor?

The collector will likely settle for a reduced amount, so Mr. Smith will receive an unexpected discount. On top of that, the time between default and collection activity gave Mr. Smith an unexpected extension on his payment schedule. With additional time to pay on a now reduced total, Mr. Smith has his best chance ever to clear this blemish from his credit history. Lastly, the bank—once facing a total loss for this account—now has obtained a partial recovery.

In this scenario, it was easy to determine that with good communication, the arrival of a debt collector brings the debtor some reprieve.

There are not very many moving parts to the job of a debt collector: Make contact with the debtor and discus payment arrangements. FDCPA litigation has narrowed or eliminated safe harbor conduct for many common sense routes of communication with the debtor. This same litigation seeks to crack down on abusive practices, yet allows more leeway for creatively construed claims to continue alleging FDCPA violations. Has the arrival of these interpretations of the FDCPA brought added relief to the debtor as expressly stated in the CFPB’s mission? Cautious collectors are being forced to avoid attempts to simply discuss the debt with the consumer. What is left for the collector except suit? Even then, regulations throw stumbling blocks in the way of collectors attempting to reinforce contracts.

As is so often stated in the case law, a business record is not created for litigation; it is created for the purpose of maintaining a functioning business. In our modern era of electronic generation, storage, and transmission of data, requirements for authentication must reasonably acknowledge the numerous court holdings that state the self-evident position that neither an original preparer or an assignee’s trained custodian is in a better position to review and authenticate regular business records.

Attorney David Ashe of Providence Dane has been actively engaged in the collection industry since 2004. He practices law in Virginia, Maryland and the District of Columbia.  He serves as litigation lead for all matters in state and federal court with a special focus on post-judgment enforcement and on evidentiary issues.