Johnston v. Arrow Fin. Servs., LLC

[Guest-1661]

Tell me how these folks were sent to arbitration?
ROBETTA S. JOHNSTON and GEORGIA THOMAS-MARSHALL, f/k/a Georgia Thomas, individually and on behalf of a class, Plaintiffs, v. ARROW FINANCIAL SERVICES, LLC, Defendant.

No. 06 C 0013

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION

2006 U.S. Dist.

[David A. Szwak]

Tell me how these folks were sent to arbitration?
ROBETTA S. JOHNSTON and GEORGIA THOMAS-MARSHALL, f/k/a Georgia Thomas, individually and on behalf of a class, Plaintiffs, v. ARROW FINANCIAL SERVICES, LLC, Defendant.

No. 06 C 0013

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION

2006 U.S. Dist.

From the opinion: "Plaintiff Georgia Thomas-Marshall opened a credit card account with Capital One on September 23, 1999. Capital One's policy at the time Ms. Thomas-Marshall opened her account was to mail both the credit card itself and a Customer Agreement to the address provided by the customer. At that time, Customer Agreements did not contain an arbitration provision. Ms. Thomas-Marshall does not recall receiving a Customer Agreement, but she admits that she threw away all documents regarding her Capital One account shortly after receiving them. Ms. Thomas-Marshall did, however, receive her credit card at the address she provided to Capital One, which she has used on numerous occasions since September 23, 1999. Capital One's records do not indicate that the Customer Agreement was returned to Capital One as undeliverable.
*2 On October 30, 2001, Capital One sent Ms. Thomas-Marshall an amendment to her original Customer Agreement. The amendment contained an arbitration clause identical to the one contained in Ms. Johnston's account. The amendment also provided an opt-out coupon to be filled out by Ms. Thomas-Marshall if she did not agree to the arbitration clause. Ms. Thomas-Marshall never returned the arbitration coupon or otherwise opted out of the arbitration agreement, which became effective on January 31, 2002. Ms. Thomas-Marshall does not recall receiving the amendment and arbitration coupon, but Capital One's records indicate that the company sent the documents to the address provided by Ms. Thomas-Marshall when she opened her account (and the same address to which Capital One sent Ms. Thomas-Marshall's credit card). Capital One's records do not indicate that the amended Customer Agreement, containing the arbitration clause and the opt-out coupon, was returned to Capital One as undeliverable. Ms. Thomas-Marshall continued to use her credit card after January 31, 2002.
Both plaintiffs ultimately defaulted under the terms of their Customer Agreements, and Capital One retained defendant, a debt collection service, to assist in collecting the debts owed by plaintiffs. Plaintiffs received letters on Capital One letterhead; the letters indicated that plaintiffs should contact defendant to resolve debt disputes. Ms. Johnston's letter included a footnote stating that should Capital One cancel or forgive more than $600 of debt, she must include the canceled debt as income on her tax returns.
Plaintiffs claim that defendant itself sent these debt collection letters, purporting to act as Capital One by using Capital One letterhead and the names of Capital One employees. Plaintiffs maintain that such misrepresentation constitutes a violation of the FDCPA because it constitutes the use of a name other than defendant's true business name to induce customers to call defendant. Plaintiffs also maintain that a cancelled or forgiven debt does not constitute income for the purpose of tax returns.
Defendant maintains that Capital One itself sent the letters after retaining defendant to assist with debt collection. Defendant claims that it has not violated the FDCPA because it did not send letters to plaintiffs; rather, Capital One sent the letters and provided contact information for defendant. Further, defendant maintains that such a dispute must be resolved through arbitration as required by the arbitration clause contained in each Customer Agreement. Capital One has agreed to defend and indemnify defendant in this matter. [emphasis added.]."

This is one of those implied consent cases where the continued use implies that you agreed to the arb. The original contract states that lender can change terms at any time. Notice and consent are the real problems here. I do not agree with these implied consent cases.

[Guest-1661]

Tell me how these folks were sent to arbitration?
ROBETTA S. JOHNSTON and GEORGIA THOMAS-MARSHALL, f/k/a Georgia Thomas, individually and on behalf of a class, Plaintiffs, v. ARROW FINANCIAL SERVICES, LLC, Defendant.

No. 06 C 0013

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION

2006 U.S. Dist.

From the opinion: "Plaintiff Georgia Thomas-Marshall opened a credit card account with Capital One on September 23, 1999. Capital One's policy at the time Ms. Thomas-Marshall opened her account was to mail both the credit card itself and a Customer Agreement to the address provided by the customer. At that time, Customer Agreements did not contain an arbitration provision. Ms. Thomas-Marshall does not recall receiving a Customer Agreement, but she admits that she threw away all documents regarding her Capital One account shortly after receiving them. Ms. Thomas-Marshall did, however, receive her credit card at the address she provided to Capital One, which she has used on numerous occasions since September 23, 1999. Capital One's records do not indicate that the Customer Agreement was returned to Capital One as undeliverable.
*2 On October 30, 2001, Capital One sent Ms. Thomas-Marshall an amendment to her original Customer Agreement. The amendment contained an arbitration clause identical to the one contained in Ms. Johnston's account. The amendment also provided an opt-out coupon to be filled out by Ms. Thomas-Marshall if she did not agree to the arbitration clause. Ms. Thomas-Marshall never returned the arbitration coupon or otherwise opted out of the arbitration agreement, which became effective on January 31, 2002. Ms. Thomas-Marshall does not recall receiving the amendment and arbitration coupon, but Capital One's records indicate that the company sent the documents to the address provided by Ms. Thomas-Marshall when she opened her account (and the same address to which Capital One sent Ms. Thomas-Marshall's credit card). Capital One's records do not indicate that the amended Customer Agreement, containing the arbitration clause and the opt-out coupon, was returned to Capital One as undeliverable. Ms. Thomas-Marshall continued to use her credit card after January 31, 2002.
Both plaintiffs ultimately defaulted under the terms of their Customer Agreements, and Capital One retained defendant, a debt collection service, to assist in collecting the debts owed by plaintiffs. Plaintiffs received letters on Capital One letterhead; the letters indicated that plaintiffs should contact defendant to resolve debt disputes. Ms. Johnston's letter included a footnote stating that should Capital One cancel or forgive more than $600 of debt, she must include the canceled debt as income on her tax returns.
Plaintiffs claim that defendant itself sent these debt collection letters, purporting to act as Capital One by using Capital One letterhead and the names of Capital One employees. Plaintiffs maintain that such misrepresentation constitutes a violation of the FDCPA because it constitutes the use of a name other than defendant's true business name to induce customers to call defendant. Plaintiffs also maintain that a cancelled or forgiven debt does not constitute income for the purpose of tax returns.
Defendant maintains that Capital One itself sent the letters after retaining defendant to assist with debt collection. Defendant claims that it has not violated the FDCPA because it did not send letters to plaintiffs; rather, Capital One sent the letters and provided contact information for defendant. Further, defendant maintains that such a dispute must be resolved through arbitration as required by the arbitration clause contained in each Customer Agreement. Capital One has agreed to defend and indemnify defendant in this matter. [emphasis added.]."

This is one of those implied consent cases where the continued use implies that you agreed to the arb. The original contract states that lender can change terms at any time. Notice and consent are the real problems here. I do not agree with these implied consent cases.

This is exactly my point. Look like they could have got around this and my reading and research tells me that arbitration favors the creditor.

What do you think the outcome will be or is it too soon to say?

[David A. Szwak]

Tell me how these folks were sent to arbitration?
ROBETTA S. JOHNSTON and GEORGIA THOMAS-MARSHALL, f/k/a Georgia Thomas, individually and on behalf of a class, Plaintiffs, v. ARROW FINANCIAL SERVICES, LLC, Defendant.

No. 06 C 0013

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION

2006 U.S. Dist.

From the opinion: "Plaintiff Georgia Thomas-Marshall opened a credit card account with Capital One on September 23, 1999. Capital One's policy at the time Ms. Thomas-Marshall opened her account was to mail both the credit card itself and a Customer Agreement to the address provided by the customer. At that time, Customer Agreements did not contain an arbitration provision. Ms. Thomas-Marshall does not recall receiving a Customer Agreement, but she admits that she threw away all documents regarding her Capital One account shortly after receiving them. Ms. Thomas-Marshall did, however, receive her credit card at the address she provided to Capital One, which she has used on numerous occasions since September 23, 1999. Capital One's records do not indicate that the Customer Agreement was returned to Capital One as undeliverable.
*2 On October 30, 2001, Capital One sent Ms. Thomas-Marshall an amendment to her original Customer Agreement. The amendment contained an arbitration clause identical to the one contained in Ms. Johnston's account. The amendment also provided an opt-out coupon to be filled out by Ms. Thomas-Marshall if she did not agree to the arbitration clause. Ms. Thomas-Marshall never returned the arbitration coupon or otherwise opted out of the arbitration agreement, which became effective on January 31, 2002. Ms. Thomas-Marshall does not recall receiving the amendment and arbitration coupon, but Capital One's records indicate that the company sent the documents to the address provided by Ms. Thomas-Marshall when she opened her account (and the same address to which Capital One sent Ms. Thomas-Marshall's credit card). Capital One's records do not indicate that the amended Customer Agreement, containing the arbitration clause and the opt-out coupon, was returned to Capital One as undeliverable. Ms. Thomas-Marshall continued to use her credit card after January 31, 2002.
Both plaintiffs ultimately defaulted under the terms of their Customer Agreements, and Capital One retained defendant, a debt collection service, to assist in collecting the debts owed by plaintiffs. Plaintiffs received letters on Capital One letterhead; the letters indicated that plaintiffs should contact defendant to resolve debt disputes. Ms. Johnston's letter included a footnote stating that should Capital One cancel or forgive more than $600 of debt, she must include the canceled debt as income on her tax returns.
Plaintiffs claim that defendant itself sent these debt collection letters, purporting to act as Capital One by using Capital One letterhead and the names of Capital One employees. Plaintiffs maintain that such misrepresentation constitutes a violation of the FDCPA because it constitutes the use of a name other than defendant's true business name to induce customers to call defendant. Plaintiffs also maintain that a cancelled or forgiven debt does not constitute income for the purpose of tax returns.
Defendant maintains that Capital One itself sent the letters after retaining defendant to assist with debt collection. Defendant claims that it has not violated the FDCPA because it did not send letters to plaintiffs; rather, Capital One sent the letters and provided contact information for defendant. Further, defendant maintains that such a dispute must be resolved through arbitration as required by the arbitration clause contained in each Customer Agreement. Capital One has agreed to defend and indemnify defendant in this matter. [emphasis added.]."

This is one of those implied consent cases where the continued use implies that you agreed to the arb. The original contract states that lender can change terms at any time. Notice and consent are the real problems here. I do not agree with these implied consent cases.

This is exactly my point. Look like they could have got around this and my reading and research tells me that arbitration favors the creditor.

What do you think the outcome will be or is it too soon to say?

If you think this decision is crazy, look at what Citibank and Citifinancial tried in the Poulson and Maranto cases. ID Theft victim subject to an arb? Court said no way but look at how lenders are desperate to push arbs. Poulson is essentially the same effort and outcome.

It will take Congressional action to outlaw arbs in consumer credit contracts. Of course, the present regime will not do so.