The Iowa Court of Appeals has laid out some important rules for anyone trying to collect on a credit card debt.
The ruling came after Capital One sued two Iowans in small claims court.
The cases had been dismissed because Capital One failed to provide documentation showing transactions on the credit cards starting with a zero balance.
On appeal, the Iowa Court of Appeals said it wasn’t necessary for there to be documentation going back to a zero balance but a credit card collector did have to provide evidence of how the amount claimed to be owed was determined.
The Court said there were two ways a creditor could get a judgment on a credit card debt in Iowa.
The first way is “by providing an account agreement with the consumer, a final or ‘charge-off’ statement with:
- the consumer’s address
- a sworn statement from a person with knowledge that account were sent to the consumer at the address
- the charge-off statement is the sum total of those statements
- the consumer used the credit card
- the consumer never objected to the monthly statements.
If the creditor cannot prove the consumer never objected to any item, the creditor may provide:
- a sworn statement detailing the objections and demonstrating they were resolved without further objection by the consumer
- a statement establishing that during the last 90 days before the charge-off statement
- the customer used the credit card and made no objections during that time.”
The second way a judgment on a credit card debt can be obtained is:
“by filing an account agreement with the customer and a transaction history ending at a recent charge-off statement together with a sworn statement from a person with knowledge authenticating these two items. The creditor is limited to recovering any increase in debt shown on the transaction history, plus ongoing interest.”