A recent study confirmed what most of us already suspected: the credit card companies are back at it, raising rates yet again.  In fact, that study revealed that average interest rates are near an all-time high.  Here’s the reason: The new credit card laws and regulations have strict requirements on how and when a bank can raise interest rates for existing customers, but those requirements often do not apply to new customers.  The banks and credit card companies are taking advantage of this loophole to ensure their new customers are paying a high interest rate from the beginning, just in case they have difficulty raising the rates later.

In my opinion, this is a shame and simply wrong.  Just remember, all of us taxpayers paid for a bailout that included many of the same banks that are now trying to charge you these very high rates.  So, after we collectively paid to bail out the banks, they now turn around and try to stick to new customers for the sake of their profit.  One can only wonder how many of those credit card companies would have failed if we taxpayers did not pay for the bailout.

Of course, don’t expect the credit card companies to stop filing lawsuits against consumers, even if they dispute the amount or even existence of the alleged debt.  If you have been sued in a credit card lawsuit in Central Florida (Seminole County, Orange County, Lake County, Brevard County, Volusia County or Flagler County), please feel free to contact us for a free consultation and evaluation of your rights.  There are numerous defenses to a credit card lawsuit that may be available to you.  Please also feel free to review Taras Rudnitsky’s background, experience and qualifications, as well as a summary of some of the credit card lawsuits we have defended on behalf of other Florida consumers.

During the “discovery” phase of a lawsuit, both sides may have the opportunity to ask the other side to answer interrogatories.  These are written questions that must be answered under oath.  They can be very important in finding out what evidence each side has to support their case – and what evidence they don’t have!  If a debt collector refuses to answer questions about your debt, or provide documents to prove the debt, that may be a sign they will be unable to prove their case at trial.

A person sued by a debt collector needs to be very careful in answering such interrogatories.  It should go without saying that the answers need to be truthful.  However, you have the right to object to certain questions.  For example, there is no legitimate reason to answer interrogatories asking for your bank account information.  That information is not relevant to whether you owe the debt or not.  Instead, debt collectors use this shady tactic to be intimidating and to save time later on, in case they win.  Generally, the best response to an irrelevant question is a legal objection.

If you have any questions about whether specific interrogatories are appropriate or not, you should contact a local consumer attorney experienced in defending debt collection cases to discuss the specific facts of your particular case.  If you are located in Central Florida, or have been sued for an alleged debt in Central Florida, (including Seminole County, Orange County, Lake County, Brevard County, Volusia County or Flagler County), please feel free to click on the “contact us” link or call us toll-free at 1-888-834-5297 for a free consultation with an experienced consumer attorney.

If you’ve been sued by a credit card company for an alleged debt, you undoubtedly have many questions about how you can defend the lawsuit and preserve your legal rights.  Some of those questions undoubtedly include the proof that the credit card company is required to present in court in order to win.  One way to defend your case is to force them to present proof that they are entitled to win, and to recover the amount they are suing for.  This article discusses the proof the credit card company (or its debt collector) needs in order to win.

There are three basic proofs the credit card company will need to present evidence on in order to win: they are the proper plaintiff, you are the proper defendant, and that they are entitled to the amount they sued for.  We’ll discuss the basics of all three of those here.

First, they need to prove they are the appropriate plaintiff and are entitled to bring the lawsuit.  Although it may sound they can easily do so, this is not necessarily as easy as it sounds.  For example, if a debt collector is suing on behalf of the credit card company, do they have the documentation to prove the debt was assigned to them?  Can they prove they own the debt using evidence admissible in court?  Even if the company that is suing you is the company that issued your credit card (such as Capital One or Citibank), it is possible that they assigned or sold your debt to another company, and are no longer entitled to sue you for that debt.  In some cases, your debt has been combined with millions of dollars of debts from other consumers, and sold on Wall Street to investors.  Sometimes, the bank that issued you the credit card was sold or merged into another bank that may not have records of your transactions.  Remember, as the plaintiff, the credit card company has the burden of proof on these issues; if they cannot prove any of these using admissible evidence, they should not be entitled to win.

Second, they need to prove you are the correct defendant.  Again, this may be more difficult than it first seems.  For example, if you were simply an authorized user rather than an owner of the credit card account, you may not be responsible for the debt.  Also, there have been numerous instances where the debt collector simply sued the wrong person.  Sometimes it’s because the person who owed the debt shared a similar name with you.  Sometimes it’s because the credit card company just wasn’t sure if you were the correct defendant but a deadline was approaching, and they sued you “just in case”.

Third, they need to prove that they are entitled to the amount they are suing you for.  In order to recover the full amount, they need to prove they are entitled to the full amount; partial proof is not enough.  For example, they may be claiming that you owe amounts you never authorized.  They may be claiming for amounts you are unsure about, such as over-limit charges, late charges, or other penalties.  They may be claiming they are entitled to their attorney fees, even if that is not true.  Remember, what they put in the lawsuit are only allegations – to win, they need to prove each of those amounts.

Finally, even if they can prove all of these things, you may have “affirmative defenses” that will still allow you to win.  For example, even if they can prove everything they said, you can still win if they waited too long to sue you; if they are past the statute of limitations, you may be entitled to win if you present this properly to the court.  If you tried to work it out with them, and they made promises to you that they are not keeping, you may be able to assert fraud or misrepresentation as a defense.  There are many other defenses that you should also consider.

In summary, you may have valid defenses, either partially or completely, if any of the following apply to your lawsuit:

• The credit card company sold or assigned your debt to someone else
• The company that issued your credit card is different than the one that is suing you
• They cannot prove the amount they are suing for
• They did not attach a copy of your contract to the legal complaint
• They modified your contract without your permission, consent or knowledge
• You were not the owner of the account
• You did not authorize any of the charges
• Your contract did not authorize the payment of certain charges, interest or attorney fees
• The debt has expired because the statute of limitations has passed
• They made representations to you that they are now violating

Of course, whether these defenses apply will depend on the unique facts of your case.  If you would like a free consultation to discuss your case with an experienced consumer attorney, please feel free to call me on our toll-free number, 1-888-834-5297, or send us an email by clicking here.  I would be honored to speak with you.

In May, a new law was signed into effect that was designed to reduce some of the most unfair and abusive credit card practices.  That law, called the Credit Card Accountability, Responsibility and Disclosure Act, had several provisions that took effect in August 2009.  (Sometimes that law is referred to as the Credit Card Bill of Rights.)  Other provisions will take effect next year.  This article summarizes some of the changes resulting from this new law, as well as some loopholes that will undoubtedly be used by credit card companies.

The first change is that credit card companies must now give you 45 advance notice before they raise your interest rate.  The old law required only a 21 day notice.  However, there’s a catch: this applies only to fixed-interest-rate credit cards, and not to variable-rate credit cards.  This helps explain why some credit card companies have been trying to get their customers to shift to variable-rate cards.

The second major change is that the credit card companies must now mail your statement to you at least 21 days before the due date.  This gives 7 additional days to get your payment in on time.

Your interest rate cannot be increased retroactively unless your payments are late by at least 60 days.  Also, you can restore your earlier, lower interest rate if you then make payments on time for 6 months.

Fees cannot be greater than 25% of the credit limit on the card.  The earlier law allowed such charges to eat up half of the credit limit.  This provision is particularly helpful to those who have bad credit or subprime credit cards.

If there is more than one interest rate applied to purchases or advances under your credit card, the issuer must apply any payments exceeding the minimum payment first to those portions that have the highest interest rate.  This can reduce the amount you pay in interest.

Fees for penalties must now be reasonable and proportional to the provision of the agreement that was violated; such penalties can no longer be automatic without any reasonable basis for them.

The new law also allows you to “opt out” of any changes to the terms of your agreement, including any increases in the interest rates or fees.  If you refuse to accept the increases, however, you cannot use your credit card anymore, and you must pay the balance off within five years.

Unfortunately, even under the new law, the credit card companies are not required to give you any advance notice before lowering your credit limit or even closing your account altogether.  These actions can actually lower your credit rating, and you may not even know it until your card is rejected at a cashier when you are buying something.

All in all, this new credit card law is a significant improvement compared to the old law.  However, there are still far too many ways that the credit card companies can take advantage of you.

If you are sued on a credit card debt, we may be able to help you.  All too often, we get phone calls from people who acted too late or thought they could handle the situation themselves.  Some admit they were unprepared, unfamiliar with the legal terms or legal procedures, or became nervous when they stepped into the courtroom.  I offer free consultations and would be happy to discuss your situation with you.  Helping Florida Consumers is what this blog is all about.

In some cases, the first time you know that you are being sued on an alleged credit card debt is when you receive a Summons and Complaint.  In small claims cases, the Summons may also be accompanied by a Notice to Appear for a Pretrial Conference.  This post explains what these terms mean for the people being sued for credit card debts.

The “Complaint” is the formal document that begins a lawsuit.  That is where the Plaintiff (the person or company that is suing) sets out their claim or claims against the Defendant.  The “Summons” is the formal legal document notifying you that you are being sued, and gives you instructions on how and when you must respond.

In Florida, you must file a formal response called an “Answer” or other responsive document unless you are being sued in small claims court.  In small claims court (the division of county court where the dispute is for $5000 or less), you do not need to file an Answer, but it is still often a good idea to do so.  That way, if you dispute the credit card debt, or if you are unsure whether you owe the amount being sued on, you can formally document your dispute.

If you receive a Summons or a Summons and Notice to Appear for Pretrial Conference, it is absolutely CRITICAL that you respond appropriately.  If you don’t show up, or if you don’t respond appropriately, you may lose the entire lawsuit before you can present your evidence.  There are also other important safeguards you may lose if you don’t respond by the deadline.  You should definitely speak to a credit card lawyer before those deadlines expire, so please call, email or fax us for a free consultation.  There is nothing so disappointing as a person who has a valid defense not being able to defend their case because the deadlines expired!