New York City Debt Collection Defense Attorney

Citibank debt buyer loses appeal; flimsy evidence sinks case

A Pennsylvania appellate court affirmed a trial court's ruling that debt buyer, Commonwealth Financial Systems, Inc. (CFS), failed to supply adequate authentication of computerized business records. As a result, all of CFS' proffered evidence was excluded at trial and it lost. In short, trial testimony from an employee of debt buyer #2 could not properly lay a foundation for 1) two billing statements; 2) an unsigned card agreement; 3) bill of sale between Citibank and debt buyer #1; and 4) an affidavit from debt buyer #1.

Debt buyer lawsuits are usually predicated on "media sheets" (spreadsheets) of basic information. These media sheets often fail in court because the information contained within must be properly authenticated to amount to reliable evidence that is not hearsay. But who can authenticate it? The employees of third-party debt buyers lack familiarity with the record keeping practices of the credit issuing banks and thus are not able to provide admissible testimonial proof.

This sore loser debt buyer (CFS) argued that there currently exists a nationwide trend and federal precedent for allowing the introduction of business records generated by third parties. It claims that reliance on the records of its predecessors is enough. Not so, the court held. Just because debt buyers have been doing this for so long unchallenged does not mean it has been lawful.

Click here for the appellate decision.

(Commonwealth Financial Systems, Inc. v. Smith, Sup. Ct. Penn., App. July 20, 2009, 06-53273)