San Jose Bankruptcy & Fair Debt Collection Practices Act Lawyer Blog

An appellate court upheld a judge's ruling, throwing out a lawsuit brought by Arrow Financial Services, LLC against a consumer, since the debt collector could not prove its right and ownership to collect the debt. Arrow Financial Services, LLC v. Wright, 715 S.E.2d 715 (2011).

Arrow Financial Services, LLC is a debt buyer and collection agency that sues to collect debts nationwide, including in California. Arrow Financial is owned by Sallie Mae, a company whose stock is traded on the New York Stock Exchange (ticker symbol SLM). For a link to its website click here.

According to San Jose (Santa Clara County) Court records, Arrow Financial has filed hundreds, or even thousands of lawsuits against San Jose consumers. Arrow Financial has brought these lawsuits in Santa Clara County Superior Court, alleging they were assigned debts by creditors such as:

Bank One
Bank First
Chase
Walmart
Neiman Marcus
First Premiere Bank
GE Money Bank
Washington Mutual

* For a more complete list of creditors who allegedly assigned debts to Arrow click here. (Santa Clara List of Arrow suits):

Arrow Financial Could Not Prove Ownership of or Right to Collect the Debt

In Arrow Financial Services, LLC v. Wright, 715 S.E.2d 715 (2011), the three judge appellate court in Georgia ruled that Arrow Financial Service's business records were insufficient to prove the consumer owed the debt collector a debt.

Arrow Financial Services claimed that it had been assigned the debt by a previous entity. Arrow Financial presented an employee as a witness. She provided a series of statements sent by GE Money Bank and its predecessors as evidence of the debt's origins. The consumer objected and the court then allowed the consumer to examine the witness about her knowledge of the documents before rendering a decision on their admissibility. The witness then testified that she had no personal knowledge of the means by which the documents were created. She also testified that Arrow Financial had not obtained the documents at the time it began its efforts to collect the debt.

Based on this testimony, the trial court sustained the consumer's objection to the documents' admission on the ground that Arrow Financial did not have the personal knowledge necessary to authorize admission of the documents under the business records exception to the hearsay rule. Simply put, the court found that the records were not Arrow's and any Arrow testimony about them were hearsay.

Court Directs a Verdict in Favor of the Consumer

At the close of this testimony, the consumer asked the court for a "directed verdict" (meaning the court can issue a verdict since the matter need not even go to a jury). The court granted the directed verdict in favor of the consumer on the grounds that Arrow Financial had failed to prove either the original contract or a valid chain of assignments from the original creditor to Arrow.

The court went on to order Arrow Financial to pay the consumer for her emotional distress as a result of Arrow Financial's actions that were in violation of the Fair Debt Collection Practices Act.

Arrow Lost Previous Verdicts for Violations of the Fair Debt Collection Practices Act

Arrow Financial is no stranger to Fair Debt Collection Practices Act (FDCPA) violations. Back in 2007 a federal jury in Los Angeles, California, returned a $100,000 verdict against Arrow Financial for its violations of the FDCPA. Laura Nelson v. Arrow Financial Services, LLC, Case# CV06-1568 RGK (PLAx), U.S. District Court, Central District of California, May 9, 2007. For the court's decision denying a motion for a new trial click here. For a link to the press release click here.