NFCU Line of Credit purchased by LVNV

[Fred030]

Hi, 

One of my family memeber had a NFCU LOC in the amount of 5k that was closed in 2019. They have not made any payments because they have no means of income  and partially disable. They recently received an email from LVNV that NFCU sold the account to LVNV (Resurgent Capital Services). I want to help them navigate this.

I want to ask how they should handle it?

Is the NFCU LOC agrement is same as CC?

In this state, SOL on CC agreement is 6 y.

[centex]

14 hours ago, Fred030 said:

Hi, 

One of my family memeber had a NFCU LOC in the amount of 5k that was closed in 2019. They have not made any payments because they have no means of income  and partially disable. They recently received an email from LVNV that NFCU sold the account to LVNV (Resurgent Capital Services). I want to help them navigate this.

I want to ask how they should handle it?

Is the NFCU LOC agrement is same as CC?

In this state, SOL on CC agreement is 6 y.

They should go to the desk drawer or file cabinet and pull out the file that has all of the relevant paperwork for the account.  Terms in those Agreements go a LONG ways towards being able to determine what laws governed the contract at the time of default...

[Fred030]

1 hour ago, centex said:

They should go to the desk drawer or file cabinet and pull out the file that has all of the relevant paperwork for the account.  Terms in those Agreements go a LONG ways towards being able to determine what laws governed the contract at the time of default...

They got the paperwork but I can't find anything relating to what law governs the default and collection. May be i am misiing something. Question is can a CLOC debt be sold to a CA?

[centex]

Just now, Fred030 said:

They got the paperwork but I can't find anything relating to what law governs the default and collection. May be i am misiing something. Question is can a CLOC debt be sold to a CA?

If it was a defaulted debt, then yes, it would be fair game for sale. 

 

The Agreement should have a paragraph that governs jurisdiction.  I cannot imagine that NFCU would botch things THAT badly and NOT have one...

[Fred030]

6 minutes ago, centex said:

If it was a defaulted debt, then yes, it would be fair game for sale. 

 

The Agreement should have a paragraph that governs jurisdiction.  I cannot imagine that NFCU would botch things THAT badly and NOT have one...

It does have a clause concerning default. It, however, does not state that NFCU can sell the CLOC debt or place it for collection outside.

[centex]

30 minutes ago, Fred030 said:

It does have a clause concerning default. It, however, does not state that NFCU can sell the CLOC debt or place it for collection outside.

If accurate, that would be a huge gaffe.  A CU will often have many paragraphs of rights and remedies, to include the ability to take all manner of legal recourse to collect upon default, and often also have language regarding cross-collateralization as an additional remedy. 

[centex]

IF the Agreement is the same one found at https://www.navyfederal.org/content/dam/nfculibs/pdfs/checking/123d.pdf , then the out for a sale is in the line which states "If the amount due is not paid immediately, Navy Federal shall have the right to take such action as is available to it under the law."

[Fred030]

That agreement is same is what I read. I will have them read it again.

[legaleagle2012]

;(2) upon failure of the Applicant to satisfy the terms of the agreement; or (3) at the option of the Applicant or of Navy Federal with good cause. Navy Federal has the right of assignment of this agreement.

 

Assignment means they can sell it.

[Fred030]

On 10/30/2022 at 7:23 AM, legaleagle2012 said:

;(2) upon failure of the Applicant to satisfy the terms of the agreement; or (3) at the option of the Applicant or of Navy Federal with good cause. Navy Federal has the right of assignment of this agreement.

 

Assignment means they can sell it.

I have them go over the agreement. Should they settle with LVNV?

[Fred030]

On 10/30/2022 at 7:23 AM, legaleagle2012 said:

;(2) upon failure of the Applicant to satisfy the terms of the agreement; or (3) at the option of the Applicant or of Navy Federal with good cause. Navy Federal has the right of assignment of this agreement.

 

Assignment means they can sell it.

After re-reading the terms of contract scouring for the mentioned qoute above, it becomes evident that the specific phrase and where mentions applies to contractual law. The contract of rights, and delegation of duties of said contract. This specific contractual aggrement was not within the outlined page of the bold written default agreement. 

According the signed contract the default agreement is as listed.

 

"Default Agreement

The occurrence of any of the following shall constitute default: failure to make payments as specified; failure to perform in accordance with this agreement; failure to stay within your approved CLOC limit; discovery that any warranty or statement of Applicant made in connection with this transaction is incorrect in any material respect; death, insolvency, business failure, or entry of a discharge in bankruptcy or receivership by or against the Applicant, Co-applicant, or any property of either. Any default by Applicant under any of the terms or provisions of any other agreement between Applicant and Navy Federal, whether existing now or in the future, shall constitute a default under all agreements. Under default, the balance due under this agreement, plus any interest, charges, and fees, shall become immediately payable without further notice to the Applicant at the option of Navy Federal. If the amount due is not paid immediately, Navy Federal shall have the right to take such action as is available to it under the law. Such action may include taking possession of all stated collateral and sell, or otherwise dispose of the same, or any part thereof, at public or private sale upon such terms as Navy Federal may elect, and apply the proceeds received from such a sale to the amounts owed. Applicant will be liable to Navy Federal for any deficiency to the extent permitted by law. In the event of default, all reasonable costs of collection, including, but not limited to, court costs, expenses, and reasonable attorney’s fees, will be paid by the Applicant. Navy Federal may also revoke any and all membership privileges previously extended to the Applicant (except the right to vote and to maintain a savings account) without prior notice to the Applicant. The waiver by Navy Federal of any default by the Applicant shall not be a waiver of any subsequent default. If Applicant is in default, Navy Federal may obtain any information it deems necessary to cure or collect said default, including Applicant’s current contact information, as permitted by law. Contact to an Applicant’s employer will be limited to obtaining current contact information. You agree that if you do not make payments on your account in accordance with this agreement, you will accept calls from Navy Federal regarding your account at any telephone number provided by you (including cellular telephone numbers). In addition, we may use pre-recorded voice messages or automatic dialing devices to contact you at any telephone number associated with your account. You agree such calls will not be “unsolicited” calls for the purpose of state and federal laws."

 

Since the  

Navy Federal has the right of assignment of this agreement.

context was written in regard to assignment of the contract and not mentioned in the default agreement, it leaves room to argue that this statement was not applicable to the default agreement or the parameters of within it.

I have browsed multiple credit card and line of credit contracts and agreements and each specified stated as such

 

Bank of Americe :

WE MAY SELL YOUR ACCOUNT We may at any time, and without notice to you, sell, assign or transfer your account, any amounts due on your account, this Agreement, or our rights or obligations under your account or this Agreement to any person or entity. The person or entity to whom we make any such sale, assignment or transfer shall be entitled to all of our rights and shall assume our obligations under this Agreement, to the extent sold, assigned or transferred. YOU MUST NOTIFY US WHEN YOU CHANGE YOU

 

Discover:

 

Survival of this agreement. the arbitration agreement shall survive 

closing of your account

voluntary payment of your account

any legal proceedings to collect money

any sale by us of your account

 

These contracts are all available on consumerfinance.gov, after browsing numerous aggreements, it is clear that this disclosure of this specific discourse action must be notified within the contract for the signee to acknowledge. 

 

In my opinion, the lack of this disclosure leaves room to speculate that this create a room to argue that the sale was a illegal. 

[legaleagle2012]

Sure, If you don't believe what is right in front of you, file a motion with the court.

[Fred030]

Thanks for the reply.

 

Her contract was written prior to the 2016 class action where a 23 million settlement was awarded to victims for NFCU's failure to disclose their debt collection processes to their clients. She to was closed out from her account and unable to verfiy her debt or fees.

She pointed this vague default agreement out to me prior to being aware of the lawsuit, with the newest details she has decided to retain an attorney and file a motion holding them accountable not only for selling her contract unlawfully, but hold them accountable for unlawful practices of harassment the debt collector has been implementing such as threating legal actions prior to the 30s days alloting ability to verify or dispute debt.  

[hdporter]

I don't have information to add re the validity of the collection account purchase.

 

However, separately, doesn't CB have a modest trove of advice on dealing with LVNV in general (verification/validation, etc.)?  I'm not at all versed in disputing/defending against collections, so am merely suggesting an additional avenue for comment to this post.

[Fred030]

On 10/28/2022 at 12:40 PM, centex said:

If accurate, that would be a huge gaffe.  A CU will often have many paragraphs of rights and remedies, to include the ability to take all manner of legal recourse to collect upon default, and often also have language regarding cross-collateralization as an additional remedy. 

After researching further, the huge gaffe caused a 23 million pay out in 2016 by nfcu because of these undisclosed debt collection tactics. The courts did in fact view it as a lack of disclosure. They are also notorious for locking clients out of their accounts to pay which is what happened to my family member. This is done so client is unable to review charges, interest, payments ect. 
Because of that she disputed the charges and they were unable to verify it, it fell off the credit report. Despite the fact they could not verify, stopped reporting and had no right to sell they did.

She will be seeing an attorney this week to discuss her next steps, since essentially unlawfully selling the contract should have voided it. 

Edited November 6, 2022 by Fred030

[legaleagle2012]

It isn't unlawful to sell your account, get that out of your head. They have already accomplished debt validation, since you know who they are and how much they want. It is not a violation to threaten to sue or actually sue within the thirty days. Debt validation is YOUR burden, not theirs.

 

(4)  a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector;

 

Did you read the FDCPA? Your lawyer is going to tell you the same thing.