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Originally Posted by gweedoh  Ok, fair enough, but to argue the accuracy of a collection account reporting as "Open account" for "Portfolio Type", there has to be a legal definition of "Portfolio Type" and it must address the term "open" in relation to collection accounts, right?
IOW, if you go to court, you're going to have to make a case for why "Open account" is inaccurate for "Portfolio Type" and to my knowledge, there's nothing on the books about this and you'll be treading new ground.
Sorry to strike a nerve, but I've seen a lot of crusades over this and "Factoring Company Account" for JDB's but they are purely semantical arguments and no one's ever been able to prove to me by way of case law or other that either are inaccurate. If you can prove otherwise, I'll be glad to be wrong.  |
Issue #1: What is Metro2? It is nothing. It is not a federal statue, law, code, or regulation. It is not a statute, law, code, regulation or ordinance of any state, county or politicial subdivision.
Issue #2: Why the big deal over Metro2? I can only assume that the same people who get their bowels in an uproar over Metro2 are the same people who think Suzie Orman is the FTC Chairperson and is married to the Gorebot who is secretly pulling the Bushman's strings and Suzie and the Gorebot have two children: Pink and Jewel.
Issue #3: Who enforces Metro 2? The Tooth Fairy and the Easter Bunny, both of whom have been tasked by FTC Chairperson Suzie Orman and baptized by the Gorebot with this sacred task.
Issue #4: Who cares about what Metro2 does or does not say, or does or does not suggest? No real human being.
Issue #5: Does the standard for determining whether something violates the FDCPA based on whether or not it harms your credit score? Absolutely not, except maybe in the minds of Suzie Orman and the Gorebot and their children.
Issue #6: Is that which is deceptive, false, misleading or misrepresents the facts is subjective? Yes, in the real world, but not in the legal world. In court, subjectivity has been converted to objectivity to create an objective standard against which something that is false, deceptive or misleading can be judged. We call that standard the "least sophisticated consumer" doctine. All violations of section 1692e are viewed through the eyes of the least sophisticated consumer, even if the consumer in question has a PhD.
Issue #7: Courts make differentiations between the least sophisticated consumer and the "most irrational consumer."
Issue #8: If the court is still unable to make a determination if something is or is not objectively false, misleading or deceptive under the least sophisticated consumer doctrine, the issue is left to a jury to decide whether something is false, deceptive or misleading.
Issue #9: When looking at a credit report and seeing the words "collection agency," what's the first thing that jumps into a consumer's mind? "Collection Agency," riiiiiight? Let's move on. If a consumer looks at their credit reports and sees 3rd Party Collector, what's the first thing that jumps into a consumer's mind? "Collection Agency," riiiiight? If a consumer sees "debt collector" what's the first thing that jumps into a consumer's mind? "Collection Agency," riight? Now notice that EQ lists collection agencies separate from creditors and notice how EX and TU also do in a round about sort of way. Then notice how JDBs are listed in the creditor section, and not the collection section. So when a consumer sees "factoring company account," what's the first thing that jumps into a consumer's mind? Huh? A consumer might be lead to believe that a JDB is something other than a collection agency, and in the course of doing so, give up their rights. How many people know that a factoring company, when it is a JDB, is subject to the FDCPA? Not many. Any information a consumer might find, unless they find it here, on factoring companies could lead them to believe a JDB is not subject to the FDCPA.
Factoring companies purchase debts that are not in default. Because factoring companies purchase debts that are not in default, they are innocent purchasers. Because they are innocent purchasers, they are holders under the definitions of all state statutes defining holders. Because they are a holders, their rights and remedies are sustained. Because their rights and remedies are sustained (transferrable), the debtor's rights, remedies and defenses are limited.
A factoring company is an innocent purhcaser which is a holder which has certain rights and remedies, with the end result being that the consumer believes it is not entitled to certain defenses and cannot effect certain rights and remedies.
For a JDB to state that it is a factoring company violates:
1692e(12) The false representation or implication that accounts have been turned over to innocent purchasers for value. JDBs are not innocent purchasers and not holders.
1692e(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer. The operand in this sentence is ANY. Any false statement. Any misleading statement. Any misrepresentation. A contradiction is inherently false or misleading and/or a misrepresentation. That is the thrust of the overshadowing case law. 1692g(b) says you have 30 days to request verificaiton or a copy of a judgment, therefore to state that you must "pay now" or "pay immediately" or "remit payment within 5 days", "pay this debt within 10 days" or "send a check within 30 days" contradicts 1692g(b) and a contradiction is inherently false (did I already say that?)
1692e(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false. A JDB knows or should know that it is not an innocent purchaser and that it is not a holder.
1692e(6)(A) The false representation or implication that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to lose any claim or defense to payment of the debt. A JDB currently has a class action against them because in their affidavits attached to the complaint they claimed to be a "holder in due course." They are neither a "holder in due course" (abolished by US Congress in 1979) nor are they a "holder" under state laws. They misrepresented the rights and remedies of the consumer and misled the judge as to the true nature of their relationship with the consumer. A judge, believing that the debt collector is a holder, would accept the affidavit as prima facie evidence of indebtedness, rather than what it truly is: Hearsay.
1692e(5) The threat to take any action that cannot legally be taken or that is not intended to be taken. A non-holder cannot legally sue as a holder.
1692e(2)(A) The false representation of the character any debt. The debt has been characterized as one that was not in default at the time of purchase.
1692e(2)(A) The false representation of the legal status of any debt. Reporting as a factoring company confers the legal stauts of holder upon the furnisher.
16922f A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. The use of factoring company is unfair as it deprives the consumer of rights, remedies and defenses and provides a false impression to current and potential lenders.
This "suite" of 8 violations are discreet violations occuring each and everytime a credit report is updated. Since the FDCPA statute of limitations is one year, the result is 12 x 8 = 96 violations. If you live in Ohio, 96 x $200 =$19,200. If you live in Oklahoma it is $192,000, and in other states it could be $240,000 or $480,000 just in statutory damages under state consumer protection acts, consumers sales practices acts, consumer sales protection acts or state statutes complimenting the FDCPA.
Q: I just got my credit report for the first time yesterday. How can I allege violations for the previous months if I wasn't even aware that they were doing that?
A: IT DOES NOT MATTER. In a class-action law suit for violaiting 1692g(a) the judge ruled that the fact that a consumer received the notice but threw it away before reading it does not matter. When a spouse reads a notice to a consumer that violates the FDCPA but the consumer does not, both are members of the class and entitled to statutory damages.
DRESSES FOR LESS, INC., DFL MANAGEMENT INC., THE DFL APPAREL GROUP, an unincorporated association, ALLISON CHE' FASHIONS, INC., BICCI STUDIO LTD., GARDEN CITY DRESSES FOR LESS, INC., DONALD WEINER and BARBARA WEINER, individually and derivatively as a shareholder of STELLA N. BISHOP FASHION CORP., and I.S.B. FASHIONS CORP., Plaintiffs, - against - CIT GROUP/COMMERCIAL SERVICES, INC. and THE UPTOWN CREDIT GROUP, INC., Defendants.
No. 01 Civ. 2669 (WHP)
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
2002 U.S. Dist. LEXIS 18338; 2002-2 Trade Cas. (CCH) P73,828
September 30, 2002, Decided
September 30, 2002, Filed
Factoring is a business relationship in which companies known as "factors" purchase at a discount other businesses' rights to collect accounts receivable. The discount usually ranges from approximately 0.5 to 0.9 percent of the accounts. The factor then collects the accounts receivable. (Am. Compl. PP 38-39.)
Without the ability to quickly convert accounts receivable into cash through [*3] factoring, a factor's clients could be exposed to a liquidity crunch that would threaten their businesses. When a factor purchases an account receivable, it assumes the risk of collecting the receivable. (Am. Compl. P 39.) However, a factor assumes that credit risk only after it has checked whether its customer is selling to a creditworthy purchaser. (Am. Compl. PP 39, 42.) Moreover, factors like CIT may refuse to credit check a client's purchaser for any reason, even if that customer is creditworthy. (Am. Compl. P 41.) Because a manufacturer usually cannot afford to risk sales that are not acceptable to the factor, the factor's credit check decision often determines whether a sale is made. (Am. Compl P 39.)
FRESH KIST PRODUCE, LLC., Plaintiff, v. CHOI CORPORATION, INC. d/b/a WASHINGTON WHOLESALE PRODUCE COMPANY, NORFOLK BANANA DISTRIBUTORS, INC., and BERKLEY TOMATO COMPANY, INC., Defendants.
Civil Action No.: 01-1834 (RMU), Document Nos.: 51, 53, 54
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
223 F. Supp. 2d 1; 2002 U.S. Dist. LEXIS 14403
July 31, 2002, Decided
JCW argues that even if Fresh Kist had a claim to the PACA benefits it received from WWP, JCW is a bona fide purchaser and thus the court may not force JCW to disgorge its benefits. Def. JCW's Mot. for Summ. J. at 23. It is settled law that a bona fide purchaser of trust assets "receives the assets free of any [*12] claim by the trust beneficiaries." Endico Potatoes, 67 F.3d at 1067. In Boulder Fruit, a factoring company purchased the receivables of a PACA buyer who subsequently defaulted [**26] in payments to growers. Boulder Fruit, 251 F.3d at 1269. Although this sale resulted in dissipation of the trust assets, the court held that the PACA creditors could not force the factoring company to disgorge proceeds from the receivables. Id. at 1272. The court reasoned that because the trustee received fair value for the assets or receivables, the sale had not dissipated the trust. Id.
GENERAL MOTORS CORP., Plaintiff, - against - VILLA MARIN CHEVROLET, INC., Defendant. ARGONAUT HOLDINGS, INC., Plaintiff, - against - VILLA MARIN GMC, INC., Defendant. VILLA MARIN CHEVROLET, INC., VILLA MARIN GMC, INC., Plaintiffs, - against - GENERAL MOTORS CORP., ARGONAUT HOLDINGS, INC., Defendants. VILLA MARIN CHEVROLET, INC., VILLA MARIN GMC, INC., SPENCER HONDROS, Plaintiffs, - against - RONALD C. SCHLEMMER, BUILDING ANALYTICS, INC., L&A ARCHITECTS, INC., Defendants.
98-CV-5206 (JG), 98-CV-5208 (JG), 98-CV-6167 (JG), 99-CV-3750 (JG)
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK
2000 U.S. Dist. LEXIS 2772
March 7, 2000, Decided
Nine years later, Chief Judge Cardozo authored Ultramares Corp. v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931), a case that placed in clear relief how narrowly Glanzer had expanded liability to nonprivies for negligent misrepresentations. The defendants in Ultramares were public accountants who prepared a year-end certified balance sheet for a rubber importer. The accountants knew that the balance sheet would be exhibited in the ordinary course of their client's business to banks and other creditors, [*78] and they supplied 32 copies for that purpose. The plaintiff was a factoring company that made substantial advances to the rubber importer against accounts receivable certified by the accountants.
DFS CREDIT CORPORATION, as Administrator of DFS Secured Healthcare Receivables Trust, Plaintiff, v. PARTIAL HOSPITAL INSTITUTE OF AMERICA, INC., JAMES S. HARROLD, JR., KENNETH FIELDS, and JUDY BARRIOS, Defendants.
CIVIL ACTION NO. 96-0954-RV-S
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA, SOUTHERN DIVISION
1997 U.S. Dist. LEXIS 8153
June 4, 1997, Decided
June 4, 1997, FILED
6. DFS Secured Healthcare Receivables Trust ("DFS Trust") is a trust created and existing under the laws of California. The Trust operates as a factoring company for various medical care facilities around the country. In very general terms, DFS Trust purchases the healthcare accounts receivable [*4] of these facilities at a discount in order to provide them with regular cash flow funding for their operations. Once purchased, the accounts receivable are actually assigned to and owned by DFS Trust. Pursuant to contractual arrangements, DFS Trust is entitled to the payments on the accounts receivable, in addition to various fees (or "discounts") for providing the funding service.
W. E. FELTS, Gene A. Gist, Clarence Bennett, William Moyle, James F. Park, Sr., Mrs. Lige Brunson, John F. Harper, Judy Harper, J. H. Franklin, Herbert S. Wooley, S. M. Cornwall, Bobby F. Clay, H. Douglas Ivy, Earl J. Winn, Plaintiffs, v. NATIONAL ACCOUNT SYSTEMS ASSOCIATION, INC., Starco Corporation, Jackson Warehousing and Certifying, Inc., Edward J. Peters, Charles J. Steen, Geraldine Steen, James Carroll Fuller, Robert B. Dukes, Jr., L. C. Schmidt, Andrew D.Andrews, the London Guarantee and Accident Company of New York, John Doe(s), Defendants
No. GC 75-151-S
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF MISSISSIPPI, GREENVILLE DIVISION
469 F. Supp. 54; 1978 U.S. Dist. LEXIS 14095; Fed. Sec. L. Rep. (CCH) P96,860
November 30, 1978
NASA was represented to be a "factoring" company which purportedly factored the accounts receivable of established manufacturing or retail firms. It was represented that NASA purchased the receivables at a discount from firms which required a better cash flow than permitted by 60 or 90 day receivables. NASA was to have collected the receivables for face value and thus earned a profit. It was also represented that NASA "loaned" funds on the strength of receivables.
FIRST NATIONAL BANK OF SOUTH CAROLINA OF COLUMBIA, Plaintiff, v. GLENS FALLS INSURANCE COMMPANY, Defendant
No. AC/441
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF SOUTH CAROLINA, COLUMBIA DIVISION
197 F. Supp. 264; 1961 U.S. Dist. LEXIS 3474
September 12, 1961
In this modern day of commercial banking and factoring, the court might take judicial notice of the fact that the assignment of accounts receivable is an [*266] important means of financing industry. In 1958, [**5] the total volume through factoring companies alone was over $ 4,000,000,000. Moore, 'Factoring -- A Unique and Important Form of Financing and Service', Volume 14, The Business Lawyer 703,706 (April 1959). It is accepted business practice for a manufacturer to bring into a lending agency duplicate invoices and to assign these invoices as security for loans.
