Over the past several years, credit card companies who have brought breach of contract cases against cardholders have had trouble winning because they have been unable to produce the original credit card agreement at trial. To avoid that problem, some credit card companies have made "account stated" claims against their cardholders. In an account stated claim, the credit card company does not need to produce the credit card agreement; it only has to prove that the debtor has admitted that he or she owes money to the credit card company, and that there is some evidence of the amount owed.
In 2013, several county courts have issued decisions in "account stated" cases brought by Citibank and other credit card companies. An "account stated" case brought by Citibank in Lancaster County was rejected by the Court. The Court stated that the mere sending of a statement which went unchallenged was not enough to show that the defendant "admitted" to any debt, let alone the amount of the debt. (Check out tip #5 in my package of "Hot Tips" from July.) However, Citibank recently fared much better in Lawrence County, primarily because, during a hearing, the defendant admitted that she was indebted to Citibank, but was unable to pay the debt.
Veteran collection attorneys have advised me that, regardless of the amount of proof they have, and regardless of whether a case is brought as a "contract" or "account stated case," the likelihood of credit card company success often depends upon the specific county in which the case is brought. Seemingly identical cases brought in neighboring Lancaster and Lebanaon Counties haved produced opposite results.
For years, the prevailing wisdom had been that, if a person finds himself or herself in credit card debt, the best thing to do would be to reach out to the credit card company and try to work out something amicably, rather than waiting for the credit card company to start collection proceedings. However, because of all of the uncertainty in the law, the differences in each credit card company's policy, and the varying degrees of proof required from county to county, the prevailing wisdom now seems to be that, instead of making the credit card company your first call, your first call should be to your attorney.