New Jersey Appellate Court Clarifies Debt Buyers’ Burden Of Proof


On March 5, the Superior Court of New Jersey, Appellate Division issued an opinion clarifying the proof necessary for debt buyers to prevail on efforts to collect an assigned debt on a closed and charged-off credit card account. New Century Fin. Servs. Inc. v. Oughla, Nos. A-6078-11T4, A-6370-11T1, 2014 WL 839180 (N.J. Sup. Ct. App. Div. Mar. 5, 2014). In a consolidated appeal of two trial court decisions, debtors sought to reverse the trial court’s orders granting summary judgment to two debt buyers seeking to collect on charged-off credit card debt they had purchased from sellers who derived their ownership from credit card issuers. The appeals court explained that to collect such debt, debtors must prove (i) ownership of the charged-off debt, which it can do through business records documenting its ownership, and (ii) the amount due at the time the card issuer charged off the debt. The court also determined that (i) an electronic copy of the last billing statement is sufficient to demonstrate the amount due at charge-off; (ii) the validity of a debt assignment is not undermined by a failure to provide notice of the assignment to the debtor, and (iii) that a debt can be assigned without specifically referencing the debtor’s name or account number. The court held in these companion cases that one of the debt buyers established ownership through proper authentication and certification of business records, while the other debt buyer failed to provide sufficient proof of the full chain of ownership of its claim to meet its burden. The court affirmed summary judgment for one buyer and reversed and remanded the other buyer’s case accordingly.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BuckleySandler LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.