An account stated claim means that there is an agreement, either in writing or based upon prior dealings between a creditor and consumer without a written agreement. The claim basically states that money is due from the consumer based upon a promise made by the consumer to pay the debt. And that the debtor agreed to the amount owing on the debt, just by the consumer’s silence when a demand was made for payment.
Many states in the country treat this claim differently so you have to look at your local contract law and consumer protection websites.
If a Debt Buyer is making such a claim, then generally, they have to prove the following:
(1) There has to be a pre-existing debt or payment obligation, and
(2) The consumer agreed to the amount owed by failing to object to the amount within a reasonable time.
To prove such a claim, the Debt Buyer’s attorney is making an allegation that needs to be proved by facts which requires evidentiary proof. Debt buyers are using this claim to get around having to produce the original contract as evidence to prove their case. And they’re probably using this tactic because they don’t have the original contract.
If you’ve watched my other debt buyer videos, I have talked about requesting documents from the debt buyer’s attorney to see if they even have documents. In most cases, they don’t have the documents to prove their case.
I have prepared a document that is formatted to help you acquire that information from a Debt Buyer’s attorney during a lawsuit. The document is entitled “Request for Production of Documents.”. You can download the document from this link.
That document asks the Debt Buyer’s attorney to produce documents to prove their case. If they can’t produce those documents, then you move the court to dismiss your case.
Now, let’s get to the defenses you may want to use against an account stated claim.
One of the defenses to an account stated allegation is that this theory does not support modern contract law. A little history for you. Contract law has evolved over hundreds of years and billions of transactions between two parties. The law is not static. It’s refined according to different transactions and the different parties over time.
Generally, in modern contract law, silence does not mean acceptance when it comes to consumers who owe debt. There needs to be a written agreement and acceptance of the credit with the promise to repay.
What a debt buyer is trying to tell a judge is, if you didn’t object to a demand for a balance due, then you, the consumer, by doing nothing means that you agreed to the debt. And, they’re using this claim against an unsophisticated consumer to claim that this debt collection is enforceable. The debt buyer is shifting the burden of proof to the consumer.
Here is one possible defense to such a claim. Usually, an account stated claim is made between two merchants. A individual consumer is not a merchant. In other words, this would apply in transactions between two commercial parties. You’re not a commercial party to the transaction.
A second defense could be that an account stated claim is against public policy. You argue that it violates consumer protection laws in your state. That’s a big one and that’s why you should check your local consumer protection laws.
A third defense could be that account stated violates modern contract law. A contract between a commercial merchant and consumer, in most states, requires there to be an agreement in writing and signed by the parties. There are some valid verbal contracts, like asking a kid to cut your lawn and you’ll pay the kid $20. Many states require a contract if the deal is for a certain amount of money or event.
You need to argue these defenses to the court. Some courts may not listen to you, but a lot of them will. Why? Because they see how consumers attempting to defend themselves are at a distinct disadvantage.
By arguing against account stated, then you are FORCING the debt buyer’s attorney to support their allegation by citing the specific law that would support this legal theory. Remember, challenging a debt buyer’s lawsuit is the first line of defense.
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