Contract – Credit Card – Consumer Protection Code – Account Stated

Plaintiff bought a charged-off debt from a credit card issuer and brought this action against defendant, the purported credit card debtor. We hold that consumer credit cards are “lender credit cards” and “consumer loans” pursuant to the South Carolina Consumer Protection Code, and plaintiff should have sent defendant a right to cure notice before filing suit.

We affirm in part, reverse in part and remand judgment for plaintiff.

Defendant is a “person other than an organization”; no party disputed that the debt at issue was incurred “primarily for a personal, family, or household purpose”; credit statements said the “loan finance charge” annual percentage rate was 29.99 percent; and the total principal amount owed on defendant’s account did not exceed the maximum dollar amount for a consumer loan. Because we hold the credit transactions at issue are consumer loans and therefore, consumer credit transactions under the SCCPC, the trial court erred in determining that plaintiff was not required to send a right to cure notice before suing for the debt.

We reject plaintiff’s argument that the requirement to issue a notice of right to cure before suing defendant disappeared when plaintiff bought the debt from Synchrony Bank. Plaintiff’s argument that it is not a creditor as defined in S.C. Code Ann. § 37-1-301(13) is an improper reading of the statute. Pursuant to plaintiff’s argument, no creditor, initial or assignee, would be held liable for violation of the SCCPC’s right to cure notice requirement whenever a charged off debt was assigned because an initial creditor would argue it would have no obligation once all its claims to a debtor’s account were assigned, and an assignee would raise the argument plaintiff raises.

Though the statute of limitations for defendant’s SCCPC counterclaim is two years, the SCCPC allows for an aggrieved individual’s debt obligations to be set off by any “refunds or penalties” she may be entitled, regardless of “time limitations.” S.C. Code Ann. § 37-5-202(1). Therefore, defendant may be entitled to a set off of amounts she owed plaintiff, and we remand this counterclaim to the trial court.

Although the “account stated” cause of action was at first confined to accounts between merchants, the modern trend is to open the doors to persons other than merchants. Absent clear language to the contrary and any policy reason to limit the cause of action, we hold the account stated cause of action applies in consumer credit card transactions. Therefore, the trial court did not err in recognizing that an account stated cause of action is a valid cause of action in a consumer debt collection matter.

The essential elements of an account stated are (1) that the account is actually stated and (2) that the parties either expressly or impliedly agreed that it is a true statement and is due to be paid then or at some other specified time.

First, the account was presented to defendant because (1) plaintiff’s employee, Larry Andrews, testified that according to Synchrony Bank’s standard procedures, it would have mailed out credit statements to the address on the statement; (2) defendant testified she believed she had received the billing statements from Synchrony Bank; and (3) she admitted she had made prior payments on the account. She also confirmed her address was the same address that was printed on the credit statements admitted into evidence. Additionally, defendant did not provide any evidence she objected to the account balance before charge off and sale to plaintiff.

Second, an agreement existed between plaintiff and defendant. Though no express agreement was introduced between plaintiff and defendant, or Synchrony Bank and defendant, an implied agreement existed as to Synchrony Bank and defendant. Defendant testified she believed she received the credit statements from Synchrony Bank and previously made payments on the account prior to charge off. Therefore, an implied agreement existed between her and Synchrony Bank. As assignee of Synchrony Bank, plaintiff stood “in the shoes” Synchrony Bank for this purpose and received the benefit of this implied agreement. Accordingly, plaintiff established all the elements of the account stated cause of action.

Affirmed in part, reversed in part and remanded.

Portfolio Recovery Associates, LLC v. Campney (Lawyers Weekly No. 011-066-23, 14 pp.) (James Lockemy, A.J.) Appealed from Dorchester County Circuit Court (Diane Schafer Goodstein, J.) John Cantrell for appellant; Jesse Ronald Jones and Caren Enloe for respondent; Carolyn Grube Lybarker and Kelly Hunter Rainsford for amicus curiae. South Carolina Court of Appeals