Open accounts

[guest.]

What is the name of your state? Ok

Open accounts

As most states have no specific SOL provisions for “open end credit plan” as defined by the TILA, the applicable statutes of limitations for many states seem to be up for interpretation.

The general response seems to be that since the TILA defines them as open accounts they can’t be considered by state laws to be written contracts. While this used to make sense to me, scrubbing the laws of my state I am not convinced. Considering in a civil suit, success is not governed by a “shadow of doubt”, but a “preponderance of the evidence” (which I guess translates to 51% sure) this leaves a lot of confusion to the average Pro Se defendant (which is evidenced by the frequent posts on this subject, assuming the search button and google is not malfunctioning) leaving them somewhat skeptical of the position they are taking in court. This is compounded by the fact that the SOL’s cause of action is based on a law dealing with contracts.

I assume other laws define mortgages, leases, etc.. without precluding them from consideration as written contracts.

Is the real argument that a credit card does not meet the requirements of a written contract since in many cases, an agreement is not signed by either party? Usually only an application, or the back of the credit card is signed, although there is typically a statement in the disclosure accompanying the card that states signing and using the card constitutes an acceptance of the terms. If the state’s really can’t categorize them as anything other than open accounts, how would they fall under contracts not in writing, conversions of instruments, torts, etc.. that many of the web sites quote in reference to the lesser SOL?

I have received differing opinions from lawyers emailed from the naca web site about this subject. This subject has piqued my interest enough to check into law school requirements, but cripes! 90 hours at $875 a credit hour! On top of the 123 hour undergraduate degree! No wonder legal representation is so expensive.

 

[Ladynred]

While its true that all states do not specifically define credit cards as open accounts, most DO have something regarding 'contracts not in writing' and that is what is typically used to defend the SOL.

Since you've read the definition of an open account in the TILA, consider exactly what it says -

means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time.

A typical written contract on the other hand, such as a loan, is for a defined finite period of time and there are no repeated transactions - you make payments and you cannot re-use that part you've paid off.

Signing a charge slip doesn't make it a written contract, all that means is that you're bound by the terms of the cc agreement. It does not change the character of the account either - its still an open-ended plan.

Are you being sued on a time-barred debt ?

Unfortunately, most lower-court judges don't have a clue about the FDCPA, the TILA or the FCRA for that matter. In many places, judges aren't even lawyers !! Many times people have taken a copy of the TILA to court with them and given it to the judge when the plaintiff's attorney tried the argument that a cc is a written contract - and they convinced the judge and won their case.

 

[guest.]

Ok, I have a top consumer advocate attorney office in OK who is interested in my FDCPA & FCRA case against Asset Acceptance on 1 of my accounts that is over 7 years past last payment. I will be meeting with them this week once I get all of my paperwork together.

The other account held by asset is between 3 and 5 years since last "alleged" payment. This one they are shying away from, at least the Kimber v FFC aspect of my suit. I have had discussions with them about "open" accounts not being contracts or agreements in writing and have cited the TILA definitions.

They do not concur and regard them as founded on writing since the agreement is signed by the debtor which contains a statement accepting the terms and conditions and the disclosure statement. They point out not only does the TILA define open end accounts, but closed end accounts.

Is there no case law I can show holding a open end account is not founded on writing? I know there are small claims victories reported, but I haven't found anything that was appealed and held.

 

[Ladynred]

Actually, the TILA does NOT specifically define what a 'closed end' account is, but does so indirectly in its definition of an open-ended plan:

(i) The term ''open end credit plan'' means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time.

In a 'closed end' credit plan, which is 99% of loans out there, there are no repeated transactions - its closed-ended - you have a finite term for repayment and you do NOT get to re-use the balance you've paid off - therefore there are no 'repeated transactions' - you pay off the loan and its done.

I'm no accountant, but the 2nd part of that, about the finance charges on the unpaid balance, I don't believe that applies to a closed-ended loan either. In my experience, the interest on fixed loans is computed UP FRONT and rolled into the total of your loan so your payment INCLUDES that 'future' interest. That's why when you have a mortgage the bulk of your payment is paying off all that interest for the first 5-10 years before you ever touch the principle. The don't compute finance charges against the unpaid balance of your loan as they do with a credit card.

Your lawyer needs to consider the differences, they're not even close. I'm not sure about case law, but I can scrounge around and see what else I can find.


********** edit ********
I found this, you should read it and print it off. The FDIC has a extensive definition of what is considered a closed-end credit plan !

http://www.fdic.gov/regulations/laws/rules/6500-1700.html#6500226.17

 

[guest.]

Thank you and I do not disagree with you. The problem is that the terms of the open ended account are spelled out in writing (disclosure statement). I know the disclosure statement is not signed. Typically only an application (and that is not always the case as the Lowe's card I just received was 100% completed "online") is signed, or the back of the card which has a disclaimer stating using the card constitutes acceptance of the terms.

Even with a "short" 3 year SOL, I have no pitty for them since consumers typically only have a 1 or 2 year SOL to enforce some of their rights. I do not disagree that debt collection is a legitimate industry and creditors have rights. The should however follow applicable law and have the intelligence to file claim within statute.

 

[Ladynred]

Yes, I understand what they're getting at with the whole signature and agreeing to terms crap, but that doesn't change the nature of the type of account as Federal laws have defined them. There is a pretty clear distinction, at least to me, between the two types and my signature on some piece of paper doesn't change it.

 

[guest.]

Beware anyone using the sample answer and affirmative defenses from whychat web page for credit cards lawsuits in Oklahoma.

12A O.S. 3-118(g) is not applicable to credit cards.
Article 3 is for negotiable instruments and is not relevant as defined by that article.

 

[JETX]

One distinctive way to show that a credit card is in fact an open-account is to read the terms of the agreement.

You will see that a credit card agreement is clearly a 'recurring' monthly charge in that each month stands on its own. You as the debtor, have the right to pay any amount you want, between the contractual minimum and paid in full. Any unpaid amount (plus new charges) are carried over to the next payment period. Simply, each monthly statement is a 'stand-alone' debt, with its own balance, own minimum and own interest amount calculation. The amount you pay (over the minimum required) is completely up to you. No other repayment agreement lets you do that.

The credit card issuers like that (monthly accounting) because it gives them the ability to raise or lower (unlikely) your interest rate. They simply send you a notice saying that you can pay your current bill in full at this months interest rate, or that you you can 'carryover' a balance which will be at a 'new' (usually higher) interest rate next month. Again, no other repayment agreement lets THEM do that.

In essence, what you have is a one month billing, for the entire balance. If you pay it off in full, the carryover is zero. If you don't pay it off in full, then you 'carryover' a balance and pay a calculated interest amount on that balance..... and the amount of payment can change every month.

That is the real difference between an open account (carryover balance with new calculated interest) and a closed (or written) account where you have a specific amount due every month for the duration of the term.

 

[guest.]

Being able to prove credit card debt is open ended not close ended is not really the problem.
Those are defined in title 14A of the Oklahoma Statutes in banking and interest definitions.
Open accounts or open ended accounts are not expressly designated in the Title 12 95 statutes of limitations and would fall under either:

95(1) Within five (5) years: An action upon any contract, agreement, or promise in writing;

95(2) Within three (3) years: An action upon a contract express or implied not in writing; an action upon a liability created by statute other than a forfeiture or penalty; and an action on a foreign judgment;

95(12) An action for relief, not hereinbefore provided for, can only be brought within five (5) years after the cause of action shall have accrued