In this debt collection lawsuit, Rushmore Recoveries’ assignment of debt incurred by the consumer with an original lender was found to be an inadequate basis for the debt buyer to enter the account records into evidence.[1]

Admissibility of Assignor’s Debt Records

As a general rule, the original credit card company’s monthly billing statements are considered hearsay evidence when they are offered into evidence for the purpose of proving the truth of the account history and balance. Hearsay evidence is inadmissible in court, unless it falls within an exception.

The main exception to the hearsay rule relied on by debt acquisition companies in court filings is the Business Records Exception. This exception allows the credit card default account statements into the court record for consideration by the judge. But in order for the Business Records Exception to the Hearsay rule to apply, testimony must be provided from a personal with personal knowledge of the practices and procedures of the company that created and maintained the account books and records at issue.

When a debt is assigned to a third party debt buyer like Rushmore Recoveries LLC, the new owner of the debt lacks personal knowledge of the manner in which the original creditor account records were created and maintained.

Accordingly the judge found himself obligated to dismiss Rushmore Recoveries’ debt collection lawsuit.

Rushmore Recoveries’ Chase Manhattan Bank case cited in support of entry of judgment was found inadequate to allow this Assignee to lay a proper legal foundation for admission of the original creditor records into evidence.[2]

Notice of Assignment of Debt

It must be noted that even if the records were admitted into evidence, they must reflect notice by the original creditor of the assignment of debt at issue.

Have you received notice from the Original Creditor that your account was assigned to Rushmore Recoveries LLC?

Call our debt relief law firm for a free review of your account documents today.

[1] Rushmore Recoveries X, LLC v. Skolnick, District Court of the State of New York, County of Nassau, 15 Misc. 3d 1139(A)

[2] Chase Manhattan Bank, N.A. v. Hobbs, 94 Misc. 2d 780, 405 NYS2d (NY Civil Court, Kings County)