Hi Gang, It may be time to start discussing the Uniform Commercial Code. I've noticed a lot of recent posts about EXACTLY what constitutes proper validation. The UCC governs all commercial paper transactions in the U.S., and has been adopted by all 50 states. First, here's a couple things to know; a) An "instrument" is a document b) A "negotiable instrument" is a document that is worth money, ( All bills fall into this catagory ). c) To be "presented" means that you have been presented the bill, thus d) A "Presentment" is a bill that you have in fact received. Here is the pertinent excerpt regarding the "proper validation" discussion. U.C.C. - ARTICLE 3 - NEGOTIABLE INSTRUMENTS ..PART 5. DISHONOR § 3-501. PRESENTMENT. (a) "Presentment" means a demand made by or on behalf of a person entitled to enforce an instrument (i) to pay the instrument made to the drawee or a party obliged to pay the instrument (b) (2) Upon demand of the person to whom presentment is made, the person making presentment must (i) exhibit the instrument, (ii) give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so, and (iii) sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made. (3) Without dishonoring the instrument, the party to whom presentment is made may (i) return the instrument for lack of a necessary indorsement, or (ii) refuse payment or acceptance for failure of the presentment to comply with the terms of the instrument, an agreement of the parties, or other applicable law or rule. http://www.law.cornell.edu/ucc/3/3-501.html ************************************** The UCC is how to force an OC to validate, since FDCPA is inapplicable. It's been said that the OC doesn't have to validate. Well, if you use FDCPA you're right. Done properly however, yes they do. To a tremendous extent we are missing the boat by not applying UCC law to our Val. demands.
Has anyone used this? or found any caselaw that shows this is applicable to making an OC validate? It looks like a great way to force the OC to put up or go away. Does the law say what they are liable for if they violate? I couldn't find it.
Thanks Butch! Finally! A law to point to that backs up what I've known intuitively all along. I've made a simple argument over and over that basic common sense, common courtesy, and common law requires that anyone who posts a notice about the character of another person had better be able to back it up, but I've never been able to cite the law that backs me up. I have always assumed the answer lay somewhere in the libel laws, and perhaps there still is something to that notion. But, at last, we can point to a section of law, and cite it chapter and verse to unwary OC's. Kudos Butch! Thanks Again!
You're most welcome, I've always known more about UCC than FDCPA or FCRA. I joined CN about 6-7 weeks ago and fortunately, being self employed, I've been in a unique position to take this time off and do nothing but STUDY, and read CN. My lovely bride is pissed at me because "my nose has been in here FOREVER", as she puts it. I believe I'm "up to speed" and intend to bring some new information to the board. Enclosed in the next post is the answer to Pat's question; "Has anybody ever used this before". I'm posting a recent UCC demand in it's own message, to avoid clutter. ...
November 27, 2001 OSU/Harding Health Dept. 71-xxxx Columbus, Ohio 43271-3081 Certified Mail # 7000 0520 0020 5560 5214 (2-Pages) Re: letter of 11/05/00 Acct # 906133554 for Butch! Mr. Sir/Madam: I am returning this presumptive presentment demand to you WITHOUT DISHONOR, pursuant to UCC 3-501. Are you a holder in due course pursuant to UCC 3-105 (b), UCC 3-305 or UCC 3-306? You have sent me an incorrect instrument with which you are attempting to induce me by FRAUD*, UCC 3-305 (a) to acquiesce to for your benefit. You have failed to provide me with proper consideration. My repeated attempts to resolve this matter with you have obviously fallen upon deaf ears. THIS PRESENTMENT IS INCORRECT? You have ignored my letter of 6/22/00 which explains my position in this matter and was sent to you WITHIN 30 days from the day I received the first bill from you. After receiving another bill from you on 10/09/00 I took the initiative and called your representative, "Jay", on 10/09/00 and I explained to her that this bill is incorrect. She said, in pertinent part, that she would "investigate the matter". Mistakenly assuming the situation was in capable hands the next thing I receive from you is THE SAME INCORRECT BILL, enclosed. Thus far you have chosen to ignore my efforts to resolve this issue. At this point I am forced to initiate my own internal investigation. If you insist that you have provided any performance to which I am indebted by instrument that does bear my signature, pursuant to UCC 3-501 (b) 3, I hereby demand that you immediately exhibit the instrument(s) that contain(s) my signature, obliging me to your demand, under agreement. UCC 1-201 (3) Further, pursuant to UCC 1-201 (3) send me a photocopy of ALL documents that may be in your possession that have anything whatsoever to do with this alleged liability. Pursuant to UCC 3-501 1) Provide me with proof of your claim that you maintain a security interest, UCC 1-201 (37), in my person or property that makes you a holder , UCC 1-201(20) to make a presentment. 2) There are grounds for insecurity on my part. 3) You may be in violation of numerous laws re-garding willful constructive fraud! As of January 1, 1994, the Justice Dept. has begun investigations and prosecutions into collection em-ployees who, after being informed by a Citizen of his or her lack of authority, proceeds with collection activities against a citizen, using authority that does NOT EXIST to back up their actions, or, by using incomplete or inaccurate presentments. If such an action is willful, the employee will face charges of extortion and conspiracy. Because you are only immune from prosecution if you can bring forth ALL the information I have demanded upon which you are relying as your legal authority, I do suggest you take this letter most seriously. You may NOT rely on presumptive (prima face) authority after it has been rebutted and you have no evidence to the contrary. U.S. Criminal Code Sec. 241 (in it's entirety) "If two or more persons conspire to injure, oppress, threaten, or intimidate any Citizen in the free exercise or enjoyment of any right or privilege secured to him by the Constitution or laws of the United States, or because of his having so exercised the same; or If two or more persons go in disguise on the highway, or on the property of another, with intent to prevent or hinder his free exercise or enjoyment of any right or privilege so secured--- They shall be fined not more than $10,000 or imprisoned not more than ten years or both; and if death results, they shall be subject to imprisonment for any term of years or for life". Please respond to my concerns, and supply the information requested within "5 WORKING DAYS" of receipt of this letter. Please sign ALL documents so that I know who I'm dealing with. Until such time as I have heard from you addressing each of my con-cerns (in turn) I will take the position that this presentment is erroneous. Failure to respond will be taken to mean that you have "acquiesced" and from that date forward the concept of "estoppel by acquiescence" shall prevail. This serves as constructive notice that, before you proceed with ANY collection activity against me, INCLUDING THE TRANSFER OR SALE TO ANY COLLECTION AGENCY, I must receive ALL of this request. If you have any questions I can be written to at this address. Respectfully, *** Butch My Address * Blacks law Dictionary defines FRAUD thusly: An intentional perversion of the truth for the pur-pose of inducing another in reliance upon it (the truth) to part with some valuable thing belong-ing to him or to surrender a legal right: a false representation of a matter of fact, whether by word or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives or is intended to deceive another so that he will act upon it to his own legal injury.
Thanks Butch The letter with a little tweaking will fit my situation almost perfectly. I've tried everything else
The UCC covers bills of lading, warehouse receipts and other documents of title. Instruments used in trade and finance transactions. I am not trying to be critical Butch, but I don't see how the UCC would apply to validation at all. The UCC doesn't cover 'bills' from creditors. I have expertise in banking and finance transactions that utilize instruments covered in the UCC and cannot understand how the UCC could apply to demanding validation of a debt as you are thinking. I believe you have misinterpreted the UCC as well as some of the definitions as they would apply. I disagree, but am appreciative of your bringing an interesting and new idea to the board. Jeff
I don't believe you are understanding the difference between commercial paper and a 'bill'(not a bill of lading, etc. ). Where are 'bills' referred to in the UCC? Your definition of a 'bill' as it applies to the UCC is incorrect. A bill is definitely NOT considered commercial paper. I know quite a bit about this subject and am interested in what you have to say but I believe you are very wrong. Jeff
This is certainly an interesting concept, although quite a stretch. I think this might be considered "cousin of a nutcase letter." What could it hurt to send this to an unknowing creditor to see if they would settle with you? However, if you are up against a suit, I'd consider it twice before sending this letter to a lawyer. I would also be very cautious about making assertions like this in a court. I've looked for any reference to case law similar to this on lexis nexis and I can find none. Although it makes total sense to you, unless there is established case law, you'd be hard pressed to convince a judge. From time to time we all would like to interpret these laws to best suit our situation, even me. But I don't know how successful either one of us would be Playing devils advocate: A bill is not a negotiable instrument. It cannot be endorsed nor does it have face value. You cannot sell a bill, assign it, trade it, or perform any other transaction with it. It is the debt or the contractual obligation requiring you to pay the bill that has worth, not the bill. The bill is just a reporting document required to show you what the creditor says that you owe.This is the base premise of your arguement and likely where any lawyer would attack you. You might want to consider the definition of a negotiable instrument (a) Except as provided in subsections (c) and (d), "negotiable instrument" means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it: (1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder; (2) is payable on demand or at a definite time; and (3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain (i) an undertaking or power to give, maintain, or protect collateral to secure payment, (ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral, or (iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor. (b) "Instrument" means a negotiable instrument. (c) An order that meets all of the requirements of subsection (a), except paragraph (1), and otherwise falls within the definition of "check" in subsection (f) is a negotiable instrument and a check. (d) A promise or order other than a check is not an instrument if, at the time it is issued or first comes into possession of a holder, it contains a conspicuous statement, however expressed, to the effect that the promise or order is not negotiable or is not an instrument governed by this Article. (e) An instrument is a "note" if it is a promise and is a "draft" if it is an order. If an instrument falls within the definition of both "note" and "draft," a person entitled to enforce the instrument may treat it as either. (f) "Check" means (i) a draft, other than a documentary draft, payable on demand and drawn on a bank or (ii) a cashier's check or teller's check. An instrument may be a check even though it is described on its face by another term, such as "money order." (g) "Cashier's check" means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank. (h) "Teller's check" means a draft drawn by a bank (i) on another bank, or (ii) payable at or through a bank. (i) "Traveler's check" means an instrument that (i) is payable on demand, (ii) is drawn on or payable at or through a bank, (iii) is designated by the term "traveler's check" or by a substantially similar term, and (iv) requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the instrument. (j) "Certificate of deposit" means an instrument containing an acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank. Just my humble opinion. That said, the UCC is definitely important to us Creditnet'ers. It is what defines things like the SOL on contracts and requirements of accord and satisfaction as well as restrictive endorsements. Be aware that many states have adopted varying versions of the UCC. This may alter your rights depending upon which state you reside or perform transactions in.
Butch, These definitions are not correct as defined in the UCC. When 'bill' is referred to in the UCC it does not mean a 'bill' such as one that is mailed to your home from a creditor. The UCC in large part is referring to documents and instruments used in international trade and finance. "Presentment" does not mean you have received a bill from a creditor, and "presented" does not mean you have been presented a bill by a creditor. These terms are used and are well understood by international bankers and financiers in regard to instruments used in trade transactions. I think a letter like you have put together may scare a creditor that doesn't know better into submission. The UCC just does not apply however and I wouldn't advise using it seriously in this regard.
Some definations I found over at www.findlaw.com § 3-104. NEGOTIABLE INSTRUMENT. (a) Except as provided in subsections (c) and (d), "negotiable instrument" means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it: (1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder; (2) is payable on demand or at a definite time; and bill: <snipe> 4: an itemized account of goods sold, services performed, or work done 5: a written instrument setting out the terms of a transaction involving goods: as a: "bill of lading" b: "bill of sale" 6: a piece of paper money 7: a written instrument providing proof of an obligation to pay money Presentment 2: the act of producing or offering at the proper place and time a document (as a negotiable instrument) that calls for acceptance and payment by another: a demand for payment of an instrument upon a party liable for payment on behalf of the holder. Holdr in Due Course: : the holder of a negotiable instrument that is complete and regular on its face and that is taken in good faith and for value without notice that it is overdue or has been dishonored or that there is any defense against it or claim to it by any party (compare bona fide holder) Note: A holder in due course takes the negotiable instrument free of any claims to it and of most defenses of a party to it. Federal Trade Commission rules have abolished the status of holder in due course in consumer transactions. I can understand what you are getting at, but I don't think that it may have any legal standing. I am not a lawyer so please take it as you see fit and correct me if I am in error. According to the findlaw.com site, the FTC "has abolished the status of hokder in due course in consumer transactions". Given this your letter IMHO does not carry any weight. In trying to get the OC to vialdiate, I have read in some BK where Sears was trying to say they had a security interest in goods purchasded with a Sears Card, was told by the BK courts they in fact did not. In addition some courts have ruled that without a signed receipt, the tranaction did not take place. In some cases consumers were using a defense of, you may have a signature but there was no impression of the credit card therefore I was not there. And it has worked. I know now if I use my Amex or if I shop at Target, no matter what card I use they make an immpression of it. Furthermore, if the SOL would chage if you were to claim the bill was a negotiable instrument. Most states state that open ended credit, SOL runs 3-5 uears depending on the state whereas an negotiable instrument can be as long as 15-20 years. I just dead a quick read of some of this and still new, if I am way off base please let me know. email is on. Enigma
From Cornell at; http://www.law.cornell.edu/topics/contracts.html negotiable instruments law: an overview Negotiable instruments are mainly governed by state statutory law. Every state has adopted Article 3 of the Uniform Commercial Code (UCC), with some modifications, as the law governing negotiable instruments. The UCC defines a negotiable instrument as an unconditioned writing that promises or orders the payment of a fixed amount of money. Drafts and notes are the two categories of instruments. A draft is an instrument that orders a payment to be made. An example is a check. A note is an instrument that promises that a payment will be made. Certificates of deposit (CD's) are notes. Drafts and notes are commonly used in business transactions to finance the movement of goods and to secure and distribute loans. To be considered negotiable an instrument must meet the requirements stated in Article 3. Negotiable instruments do not include money, payment orders governed by article 4A (fund transfers) or to securities governed by Article 8 (investment securities). Quasar: "Playing devils advocate: A bill is not a negotiable instrument. It cannot be endorsed nor does it have face value. You cannot sell a bill, assign it, trade it, or perform any other transaction with it. It is the debt or the contractual obligation requiring you to pay the bill that has worth, not the bill. The bill is just a reporting document required to show you what the creditor says that you owe.This is the base premise of your arguement and likely where any lawyer would attack you". Granted Quasar, a "bill" from a creditor is a worthless piece of paper. Which is EXACTLY my point. A bill represents an agreement made between the provider of a good or service in exchange for payment. A "contract". A bill from a creditor is a representation of this underlying contract. It is the contract that is negotiable. That's why CA's "buy", and then sometimes "resell" debt. contracts: an overview Contracts are promises that the law will enforce. The law provides remedies if a promise is breached or recognizes the performance of a promise as a duty. Contracts arise when a duty does or may come into existence, because of a promise made by one of the parties. To be legally binding as a contract, a promise must be exchanged for adequate consideration. Adequate consideration is a benefit or detriment which a party receives which reasonably and fairly induces them to make the promise/contract . For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of giving is normally not considered adequate consideration. Certain promises that are not considered contracts may, in limited circumstances, be enforced if one party has relied to his detriment on the assurances of the other party. Contracts are mainly governed by state statutory and common (judge-made) law and private law. Private law principally includes the terms of the agreement between the parties who are exchanging promises. This private law may override many of the rules otherwise established by state law. Statutory law may require some contracts be put in writing and executed with particular formalities. Otherwise, the parties may enter into a binding agreement without signing a formal written document. See § 110 of The Restatement. Most of the principles of the common law of contracts are outlined in the Restatement Second of The Law of Contracts published by the American Law Institute. See Restatement (Second) of Contracts. The Uniform Commercial Code, whose original Articles have been adopted in nearly every state, represents a body of statutory law that governs important categories of contracts. The main Articles that deal with the law of contracts are Article 1 (General Provisions) and Article 2 (Sales). Sections of Article 9 (Secured Transactions) governs contracts assigning the rights to payment in security interest agreements." To suggest that an original creditor is under NO OBLIGATION to prove that money is owed flies in the face of common sense as well as common law. I know neither you nor Jeff, have suggested this but how would YOU go about approaching the OC? What is to stop my from sending YOU a bill for a Million Dollars and making YOU pay me? What is to stop the IRS from sending you an erroneous bill for $5,000 in back taxes that you don't owe? Something they do all the time BTW. It is merely my contention that it's those applicable provisions of UCC that will stop me. I think if we work on this we can come up with a consenceous as to how to handle an OC. We desperately need to do SOMETHING to deal with some of these OC issues BEFORE the case gets turned over to collections. I suppose it is possible I've made some misinterpretations. I did make a mistake once before ... let's see ... it was way back in uh ... lol
Butch, I have just done a far amount of reading in various law sites and have done some searching, but so far I am unable to find a clear answer to your questions. As I understand it, you or someone else went to a healthcare provider and services were rendered. At a later date a â??billâ? or more accurately, should be called a â??statement of accountâ? was presented which contained incorrect information as to the charges and those charges are being disputed. I would not agree with you in that the transaction constitutes a negotiable instrument and therefore would not fall under the UCC. It does not meet the definition. You cannot attach a security to a natural person and as to property, unless some prosthetic device was used, then again trying to repossess that device may not be allowed since it would cause further injury and / or lessen ones quality of life. The FCBA is not applicable because it is not an â??open endedâ? transaction. Has the healthcare provider sent the information to the CRAâ??s? If so, your recourse is to dispute it through the CRAâ??s. Of course if the debt cannot be validated then it has to be removed. Or you may have grounds because the healthcare provider is â??furnishingâ? information, then they would fall under the FTCâ??s guidelines. If this is not the case then, I believe that your only other course of action is going to be in contract law. Look to your states evidence code. File a civil action in a local court to force the healthcare provider to furnish the documentation you desire. Now if you were to present me with a bill, I could either ignor it or sue to force the turn over of the contract. Now as for the IRS, I've been there and it was not a fun ride. They are governed by another set of ruls . Now if I am completely off base, email me privately. Enigma
One other thought, some states have "Fair Medical Billing" acts, that require itemized billings. Does your state?
The FCBA does indeed apply to medical bills, as does the FRCA and the UCC. I am not at liberty to divulge information on my suit, but a medical account is indeed an "open ended", revolving, open account. You have 60 days to lodge a dispute against such a bill. You are also protected by the UCC, but a completly different section than what you are arguing. The thing is, you have to wage the dispute within 60 days of the original bill. You can't just ignore it for months or years and then all of the sudden expect the OC to validate. I think this is what you are trying to circumvent. The only thing I can say is that you could argue that you never got the bill, or disputed it and never got an explanation in writing. They are required to send an explanation in writing, not just an itemized bill. (16 U.S.C. 1601 § 161 (ii)) You want to look at the Truth in Lending Act to see the definition of an open account. There is no way of knowing the amount of charges that may be amassed, for example, in a visit to the emergency room or hospital stay. You might receive multiple services over several days, hence repeated transactions. The hospital is extending you credit on these services. If the amount is high enough, it would not be unusual that the bill could be payed off in installments. The hospital can apply finance charges to your account if not paid in full. There is an FTC opinion on the matter. There is case law centering around this subject. Just look for it. I know, I just completed a similar case myself. I am happy with the outcome.
