New York City Debt Collection Defense Attorney

Can a Debt Buyer Authenticate (Admit into Evidence) an Original Creditor's Business Records?

The General Rule

Do you have a case where a debt buyer[1] is using an affidavit signed by its own employee to introduce account statements of the original bank? That is generally not allowed because the debt-buyer employee has no knowledge of how those records were created or maintained. Similarly, debt-buyer employees probably lack personal knowledge of assignment activity between debt buyers earlier in the chains of transfer.

"A debt buyer's affidavit has no probative value when the affiant's claimed familiarity with the assignor's (i.e. bank) business records is derived solely from the affiant's review of those records after they came into the debt buyer's possession."[2]

The Minority Exception

As an exception to this basic rule of evidence, a minority of courts recognize a 'rule of incorporation,' which provides that records taken into custody by a business are considered "made" by that business if that business integrates the documents into its business records and relies upon them."[3]

However most courts reject this theory since it's inconsistent with the basic rules of evidence. This rule would not apply to records created by the debt buyer. Moreover, debt buyers rarely integrate the bank's records into their businesses. Bank records include account applications, the original credit agreement, amendments to the agreement, billing statements, additional communications from the creditor and any change of terms, a running account diary, or written communications between the bank and the consumer. Then there is the additional issue of authenticating electronic records as will be discussed in our next blog.

Be alert to who references documents in your case. Whether you're facing a complaint, summary judgment motion, or post-judgment enforcement action (bank restraint or wage garnishment), fundamental rules of evidence should always be raised and respected.

How to Admit Bank Records into Evidence

In New York, the steps to authenticate evidence, such as bank records, in a legal proceeding typically include:

  1. Laying the Foundation: Presenting testimony from a witness with personal knowledge about the record-keeping system of the bank to verify that the records were kept in the course of a regularly conducted business activity.

  2. Business Records Exception: Invoking the business records exception to the hearsay rule, which requires showing that the documents were made at or near the time by, or from information transmitted by, a person with knowledge.

  3. Certification or Affidavit: Submitting a certification or affidavit from the custodian of records or another qualified individual, attesting to the authenticity of the records.

  4. Compliance with CPLR 4518(a): Under New York's Civil Practice Law and Rules section 4518(a), bank records can be admitted as evidence if accompanied by a certification from the custodian of records.

  5. Review by the Court: The judge will review the evidence to ensure that it meets the necessary standards for authenticity and reliability before admitting it into evidence.

Foundational Questioning: Authenticating Bank Records in NY Legal Proceedings

To authenticate bank records in a New York case, a lawyer might ask the following foundational questions of a witness, such as the custodian of records:

  1. Can you please state your name and occupation for the court?
  2. In your capacity at [Bank Name], what are your responsibilities?
  3. Are you familiar with the bank's record-keeping system?
  4. How does the bank create and maintain these records?
  5. Are these records created at or near the time of the events they document?
  6. Do the records you oversee include account statements and transaction histories?
  7. Were these bank records kept in the course of a regularly conducted business activity?
  8. Is it the regular practice of the bank to make such records?
  9. Have you brought with you the records that pertain to the case at hand?
  10. Do these records accurately reflect the bank's transactions and business activities concerning the account in question?

These questions aim to establish the reliability of the records as part of the bank's normal business operations and to qualify them for the business records exception to the hearsay rule under CPLR 4518(a).

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[2] LHR, Inc. v. Ayree, Asset Acceptance v. Lodge, Unifund CCR Partners v. Youngman, Rushmore Recoveries X, LLC v. Skolnick.

[3] Jonathan Sheldon, Carolyn L. Carter, Chi Chi Wu, Collection Actions, at 66 [3rd ed 2014].