Is this correct

[NicV]

I tend not to believe things I read on the internet but I am curious about this.

Banks make consumer loans on unilateral contracts of adhesion, and as the superior party in a unilateral contract they cannot sue for breach of contract, so they file insurance claims on the non performing accts. and collect insurance on the accts

Credit card are installment contracts, and as such are not "negotiable instruments" and cannot be sold for value under holder-in due-course theories of law

If this IS True then when a collection agency "buys" the debt that has been already substantially paid and trys to re-collect, isn't that fraud?

[Trish]

So (in layman's terms)......are you asking how a CO (debt that has been written off) can be sold to a CA and continue to be collected on?

[NicV]

Well if it has been written off and funds collected, the original creditor has for the most part been made whole, so the only deficiency is the difference between what they collected and the original debt.

Additionally if the Statement that these debts are not "negotiable" is true then they cannot be sold at all.

[Trish]

A company writes off a debt for a tax break. If they are eventually able to collect on the debt then they have to claim the repayment as income.
Basically a write off or charge of is just an accounting term. They will almost always try to collect on it (even after it is written off) or end up selling it to a CA/JDB.

As far as it being a non-negotiable instrument, I do not believe that would apply to a debt that the consumer failed to pay.

[NicV]

If a company writes it off then its a loss, but what if they collect on insurance, is there some way to find out if this is so? Do they have to disclose this?


A non-negotiable instrument is just that, non-negotiable or assignable, so then the collector has no contractual relationship with the debtor, making them a 3rd party interloper with no legal standing

[Trish]

Ok, let me ask you this.....
What law is it that applies here...and where, specifically, does it say "credit cards" can't be sold or transferred?

There are also other things that fall under the category of a "non negotiable" instrument.......such as a auto/retail installment contract.......so if what you are saying is true then how can that be transferred?

besides...they're not selling or transferring the "credit card"...but rather the rights to collect on it...

[NicV]

I'm not saying it isn't done, it seems to be done all the time, but therein lies the problem. If it is being done then a certain collusion is being perpetrated against the debtor by the purchaser and the courts

Even if the purchasing plaintiff provides an affidavit of the debt and balance purchased, it should be considered "hearsay" as no one at the purchaser has personal knowledge of the creation, maintenance, issuance and tracking of the statements and debt, due to the fact that they are business records of the originating creditor not the purchasing plaintiff.

So the above scenario could be considered a violation of 18 USC 1341 & 1962 requiring complicity of State court judges who in their actions may violate 18 USC 371

This is also happening in the Mortgage industry where there is NO original note in possession. So they file a "lost note affidavit" and things proceed along "wink wink Nod Nod, say no more" and the unwitting consumer doesn't even know he's been screwed again. Because it is his right to see the original note he signed at closing, and if the banksters cannot produce it then they cannot pursue their claim without the collusion of the court. There was a decision in Florida I believe in 04 or 06 in this, holding for the consumer.

[Trish]

Again, can you please show me what law states that credit cards can't be sold or transferred?

[NicV]

Trish, here is the definition of a "negotiable instrument" from the UCC code and you will see that credit cards ( installment loans" ) do not satisfy this definition

negotiable instrument: West's Encyclopedia of American Law (Full Article) from Answers.com This is now the law of the land, the UCC code.

[Trish]

Ok, Nic....
Did a little more looking into this... and I see what you are thinking.........but there is one problem.
UCC does not apply to credit cards. UCC only applies to (generally speaking) goods and services.......and secured items (like a vehicle). It does not apply to revolving accounts.......which is what credit cards are (they are not installment loans). For that you need to go into your state laws and the Truth in Lending Act.