contract-law consumer-protection debt north-carolina
What is a misrepresentation made after a contract is signed?
<p>Consider the following scenario:</p>
<ol>
<li>Consumer opens a credit card account with bank, signs cardmember agreement</li>
<li>Consumer uses card regularly, pays bills</li>
<li>Consumer calls bank and closes credit card account</li>
<li>Bank does not disclose that account has a balance at time of closure</li>
<li>Consumer fails to pay balance as a result of (4)</li>
<li>Bank reports account to credit bureaus as delinquent</li>
</ol>
<p>What causes of action against the bank for (3)? Negligent misrepresentation?</p>
<p>The consumer relied on the misrepresentation, but it did not induce them to enter into the contract, as it occurred after the contract was signed.</p>
<p>EDIT:</p>
<p>The contract states the customer &quot;will receive billing statements&quot; and that the customer agrees to &quot;pay the minimum payment by the due date [on the statement]&quot;. The statement is furthermore the &quot;official&quot; record of the account. This suggests that the consumer's duty to pay by a particular date is conditioned upon receipt of a billing statement.</p>
<p>The account agreement also states &quot;You will receive a billing statement, if one is required, each month It will show your minimum required payment.&quot; &quot;<em>Required</em>&quot; is not defined in the agreement. Presumably it is a reference to the provisions of the Fair Credit Billing Act (statement required if balance &gt;= $1).</p>
<p>Customer claims they never received statements, before or after the account's closure. Customer notified bank that they did not receive statements repeatedly, with a record of such a notification occurring as late as one week prior to the account's closure.</p>
<p>The customer is ultimately liable for the balance, of course. But that is not what is reported to the credit bureaus. Payments were reported, e.g., as &quot;30+ days late&quot;. Can a payment be &quot;late&quot; when the due date is on a statement that the customer does not have?</p>

<p>There is no misrepresentation by the bank as you describe it, there is negligence by the account holder to comply with the terms of the account. The bank made no representation at all regarding a balance due. If you want the bank to be at fault, they the customer would have to demand a declaration as to the existence of a balance due (choose your words carefully), and the bank would have to have falsely asserted that there is no present or future obligation. This is not going to happen. All the bank can say is that they have no <em>present</em> record of charges. The customer's question might be something like &quot;Do you guarantee that there will be no charges to this account as of now&quot;. Of course, the bank cannot know whether there is a forthcoming paper charge that was made at some mountain resort. If case they did make such a promise, you could disavow the debt, using your reliance on their assertion as the basis for denying the debt.</p>
<p>There is no law requiring banks to warn people of their contractual obligations when they close an account. I've never encountered a credit card contract that includes such a clause, but I suppose some bank might include a mandatory-warning clause, in which case they could be in breach of contract.</p>

<p>It could be a breach of contract if the contract requires the bank to report the account balance to the consumer.  It could be a violation of banking laws of they require such a statement of the balance.  It could be both.</p>
<p>Did the consumer ask what the balance was?  How was the monthly balance statement communicated to the consumer during the life of the account?  What does the cardmember agreement say about closing the account, the procedure for doing so, or the status of unpaid charges at the point of the account's closure?</p>
<p>To the extent that misrepresentation inducing the consumer to enter into the contract might be involved, it could be on the argument that the lender always intended not to send statements if the account was closed with an outstanding balance and lied about that by putting something into the cardmember agreement claiming that they would.  That would of course be nearly impossible to prove without access to internal documents that you can't likely get -- if they even exist.  Beach of contract and violation of fair lending practice laws are much easier to demonstrate.</p>
