A New Jersey appeals court ruled that debt buyers do not have to provide notice to consumers when debts are purchased and assigned but must prove they own the debt and the amount before they can collect. Further, electronic business records are sufficient for proof.
The Appellate Division for the Superior Court of New Jersey last week issued a 46-page consolidated opinion concerning two consumer credit card collection cases in which the consumers appealed the sufficiency of proof offered by the debt buyers with respect to their ownership of the debts and the amounts.
The court held that debt buyers must prove they have the right to collect on debts and the amount owed by consumers based on electronic business records, data files or copies documenting ownership and containing consumer names or account numbers and last billing statements.
In doing so, the court concluded that while the actual assignment documents may not specifically reference discrete consumer account information and debt buyers may not alert consumers that their debt was purchased and assigned, the validity of assignment and, thus, evidence of ownership is not affected.
The court ultimately affirmed the case against one consumer who claimed he had never heard of the debt buyer that was trying to collect payments from him. The court reversed the decision against the other consumer, finding that the debt buyer did not provide an electronic document or affidavit sufficiently proving the full chain of ownership of the claim.
The court further criticized the debt buyers because the "presentation of their proofs needlessly complicated these cases." The court opined that proofs in cases like these should be "presented in a clear and straightforward manner" particularly because the "sums in these are often modest and defendants commonly self-represented."