OKLAHOMA CITY – An application for a U.S. passport must be accompanied with an original birth certificate. An applicant for a Real ID driver’s license in Oklahoma must provide proof of identity and legal U.S. presence, such as a U.S. birth certificate or passport and proof of Social Security, such as the person’s Social Security card, a W-2 or a 1099 form. A Real ID, in turn, is required to get on a commercial flight or to gain access to some federal facilities.
A credit collection company apparently is learning the hard way that mere photocopies of barely legible mass-produced documents aren’t enough to compel payment of a past-due debt in Oklahoma.
Credit Corp Solutions describes itself as “a receivables management company” that buys and collects consumer debt, “including unpaid retail finance and sales finance credit cards and personal loans.”
CCS reportedly is based in Utah but was established several years ago in Australia and today operates in Australia, New Zealand and the U.S.
They claim that if you’ve heard from them, “it’s likely because Credit Corp has bought your past-due debt from a bank, finance, telecommunications or utility company. This means that you now owe the outstanding balance to Credit Corp.”
Well, maybe not.
A Michigan-based law firm advertises on its website that lawsuits filed by CCS “are all based upon a weird title history of strange sounding entities buying up the old debt with no proof.” Their lawsuits are filed “without the proper assignment or title paperwork…”
That’s what Robert Wafer of El Reno asserted after Credit Corp Solutions Inc. filed suit against him in Canadian County District Court.
CCS filed a one-page “Petition for Indebtedness” against Wafer in March 2020.
“WebBank provided credit to the defendant” and he “defaulted on the obligation,” an Oklahoma City law firm retained by CCS alleged. Since the account was assigned to Credit Corp Solutions Inc., Wafer owes CCS $14,700, the letter claimed. The six attorneys listed on the document also asked for “interest at the statutory rate from the date of judgment, all court costs and a reasonable attorney’s fee…”
Two months later Wafer’s OKC law firm responded with a list of “Affirmative Defenses.”
• The applicable statute of limitations has expired.
• Credit Corp Solutions is not the real party in interest.
• Plaintiff [CCS] lacks [legal] standing to bring the lawsuit.
• Plaintiff fails to state a claim upon which relief may be granted.
• Fraud.
• Violation of the Fair Credit Reporting Act.
• Violation of the Fair Debt Collection Practices Act.
In late 2021 the OKC law firm representing Wafer, who filed a pauper’s affidavit with the court, withdrew from the case and was replaced by Sherry Doyle of Legal Aid Services of Oklahoma.
Canadian County District Judge Paul Hesse, in a one-page document, ruled summarily for CCS on March 25, 2022, writing that “there is no genuine issue as to any material fact and the Plaintiff is entitled to judgment as a matter of law.” Hesse awarded CCS $17,205, which included the principal amount due, court costs and attorneys’ fees of $2,205.
Doyle appealed to the Oklahoma Supreme Court, which assigned the case to the state Court of Civil Appeals.
CCS ‘failed to provide’
authenticated exhibits
The appellate judges observed that in its petition for relief, Credit Corp Solutions “states that WebBank, a Utah-chartered industrial bank using the web-based platform LendingClub Corporation, provided a loan to Wafer.”
CCS wrote that it purchased Wafer’s loan from WebBank, and subsequently Wafer defaulted on the loan and thus became indebted to Credit Corp Solutions.
The court file contains a photocopy of an “Original Debt Sale Affidavit” signed by Andrew Jensen, director of LendingClub; the letter is dated Sept. 11, 2017, and was typed in San Francisco, California. In the notarized affidavit, Jensen states that on Aug. 29, 2017, LendingClub sold “a pool of charged off accounts” to CCS.
Also included is an exhibit purporting to be a record of a $20,000 loan to Wafer from Web Bank but serviced by LendingClub Corp. from December 16, 2014, to July 16, 2017.
The Court of Civil Appeals reversed Hesse’s summary judgment for CCS. Credit Corp “failed to provide authenticated exhibits to prove that Wafer had a valid contract with WebBank and failed to prove that Credit Corp became the proper party in interest by purchasing the contract from WebBank,” the judges ruled.
Credit Corp submitted seven exhibits that constituted the evidentiary basis for its alleged “undisputed” facts. Wafer’s attorney, Doyle, disputed them as inadmissible. Those exhibits “did not qualify as business records because there was no accompanying affidavit or testimony” as required by state law, she pointed out.
The Court of Civil Appeals concurred because CCS “failed to authenticate its exhibits with written declarations.”
‘Inconsistent terms’
The Civil Appeals court pointed to inconsistent contractual terms. For example, the loan agreement includes a principal balance “between $1,000 and $35,000”, a loan term of either three or five years, and the truth-in-lending disclosure includes an interest rate of 21.69% but the interest rate on the purported payment schedule includes an interest rate of 19.24%.
“A contract that is indefinite and uncertain in its terms cannot be enforced and therefore is invalid,” state courts ruled in a 1946 lawsuit.
CCS produced “no admissible evidence proving it had obtained all rights to a valid contract from a person entitled” to enforce it, Doyle insisted.
She also argued that the loan is “void and uncollectable” because the original lender “was not a supervised lender in Oklahoma” as required by state statute.
The length of the loan agreement “necessitated that Wafer sign a contract,” but none of the exhibits CCS submitted includes Wafer’s signature, the appellate judges noticed.
In this case “there is no contract or verified evidence that Wafer’s alleged loan was purchased by Credit Corp,” the Court of Civil Appeals wrote. “Without evidentiary support showing it is the party in interest, Credit Corp does not have standing to bring this lawsuit.”
Consequently, the trial judge’s summary judgment in favor of CCS was reversed.