Discover Bank - Original Creditor as Plaintiff (profile)

DISCOVER CREDIT CARD COLLECTION SUITS IN TEXAS COURTS

NAME OF CARD ISSUER AND ENTITY TYPE

Discover Bank is a bank operating out of Delaware and a leading issuer of credit cards nationwide. It is not a national bank under the National Banking Act, but it is insured by the FDIC. Discover Bank appears as plaintiff in debt collection suits, but other entities are also involved. 

SERVICERS AND SUBSIDIARIES

March  2015 UPDATE: DB SERVICING CORPORATION DOES NOT EXIST ANY MORE. See image of record from Ohio Secretary of State: 

The new servicer is DISCOVER PRODUCTS INC, a UTAH corporation. Also see list of Discover Financial Services family of companies (image added to bottom of this post) 

Discover Bank relies on servicers to handle part of its operations. Two affiliated entities' names appear in summary judgment affidavits:  DB Servicing Corporation and DFS Services LLC.

The numerous people who execute summary judgment affidavits for Discover Bank in debt collection suits (see partial list below) are employees of the servicers. Some identify themselves as employee of one servicer on some affidavits, and as employee of the other entity on others. They may be full-time affidavit signers, but their job titles are typically given as “Legal Placement Account Managers” or “Litigation Support Specialist”.

LAWFIRMS AND LAWYERS THAT SUE ON DISCOVER BANK'S CREDIT CARD ACCOUNTS IN TEXAS 

Discover Bank has many customers in Texas and sues on defaulted accounts in its own name. For that purpose, it employs more than one law firm in Texas. The debt collection firms used by Discover include ZWICKER& ASSOCIATES; RAUSCH, STURM, ISRAEL, ENERSON & HORNIK, LLC ("RSIEH"); and SCHEINTHAL & KOUTS, L.L.P.

Additionally, Discover Bank debt suits are also brought by WEINSTEIN & RILEY, P.S. a law firm with offices in Seattle, Washington. Because it is a legal requirement, WEINSTEIN utilizes Texas-licensed attorneys to handle cases in Texas court (Josh Harrison, Jason D. Anderson, Cody Moorse).

VOLUME OF LITIGATION 

From August 2012 to August 2013 Discover Bank filed 454 cases in Harris County District Courts. The total for the four civil county courts at law for the same time span was 66.
  

DISCOVER CARD AGREEMENTS

Discover Bank’s form contracts are typically more than two dozen pages long and have a table of content, with page references. The bank’s standard agreements come in many versions, which are identified by Copyright Year and by versions codes consisting of numbers and a letter in the footer of the first page. 

For Example: TL20A.0508 from 2008, and  TL22H.0210 from 2010 

  
The iterations of agreements appear to be consecutively numbered. Assuming Discover Bank started with TL01, there are now more than twenty successive versions, not counting version distinguished by the letter designations ("A" and "H" in the examples above).  

Arbitration Clause 

Like most other CMAs, Discover Bank CardmemberAgreements contain arbitration provisions. The choice of law is Delaware, which reflects its home state and that state’s requirement that all banks located there operate under Delaware law.

Usury Avoidance Clause 

Unlike most other CMAs, Discover card agreements also contain a usury savings clause. That clause is designed to avoid usury liability in the event a variable interest rate exceeds the legal limit in a particular jurisdiction. It provides for a credit for all overcharges resulting from the application of an excessive interest rate.

MONTHLY ACCOUNT STATEMENTS

Finance Charges

Monthly Discover Card statements contain two or three balance categories, depending on whether a balance transfer offer was made and utilized. The standard balance categories are Purchases and Cash Advances. Different interest rates may apply to different balance categories. The interest rate for the balance transfer category will typically be a low rate (e.g  3 for 4 percent) for a limited time.

Interest rates on Discover Card account statements run as high as 29.99%. This is legal under Delaware law, but could be challenged as usurious if the Plaintiff does not invoke Delaware law or other basis for exemption from Texas interest rate limits (-- > usury under Texas law). 

Payment address and address for correspondence 

Discover Bank statements have either one of two addresses printed on payment coupons: a post office box in Phoenix Arizona ZIP Code 85038 or one in Carol Stream, Illinois with ZIP Code 60197.

Interestingly, Discover Bank requests that correspondence be sent to an address in Utah: P.O. Box 30943 Salt Lake City, UT 84130. This is presumably the address where complaints (billing disputes) should also be sent. Implication: If an affiant testifies about no dispute having been received, the affiant should show a connection to the Utah office to be in a position to do so based on personal knowledge and familiarity with mail received and documents created at that location.  

Purported “duplicates” of monthly statements for use in litigation

For litigation purposes, Discover Bank (or an affiliated company) re-generates statements from a database; oftentimes a whole stack of them (but the volume of documentation appears to vary among attorneys). They are not necessarily true and accurate copies of the statements that were actually mailed near the date shown as the billing cycle closing dates. On occasion the statements created for use as litigation exhibits differ from the originals. They may even have a different mailing address on them.  

Additional documentation produced by Discover as Plaintiff in debt collection suits 

Unlike most other credit card issuers, Discover Bank produces (and uses as exhibits) images of checks signed by card members and sent with payments, along with the corresponding payment coupons torn off from the monthly statements and enclosed in the envelope in which the payment is sent. At least in a subset of debt collection cases this type of evidence appears as part of the summary judgment submission. Unlike the re-generated monthly statements, these exhibits appear to be genuine copies (or images) of the originals as indicated by the presence of handwriting on them.  

  

AFFIDAVIT SIGNERS IN RECENT CASES  

Danielle Laughrey, identified as "employee and custodian of records for DB Servicing Corporation, the servicing affiliate for Discover Bank". Her affidavit states that DB Servicing Corporation is a wholly-owned subsidiary of Discover Bank.  Like other affiants, Laughrey also signs affidavits in Franklin County in the State of Ohio. She also acts as a notary for other affiants. 

Patrick Sayers, identified as "Litigation Support Specialist" for DB SERVICING CORPORATION, signs affidavits in Franklin County, Ohio (Notary: Phyllis A. Scholey)

James Ball, Litigation Support Manager for DB Servicing Corporation

Natasha Szcyzgiel, Legal Placement Account Manager, signing affidavits in the State of Ohio, County of Franklin.

Additional affiants whose affidavits have appeared in lawsuits by Discover Bank in Texas courts: 
Heidi Leo, with Abigail Fried as notary
Joshua Frazier, with Bethany Stark as notary 
Janice Dorr, with Schloley as notary
Bethany Stark, Robert Adkins, Stacey Holmes, Stefanie Watkins, Tiffany Adair, Stephen Ball, Erin Marmol

   

WHAT’S UNIQUE OR NOTEWORTHY IN SUITS ON DISCOVER BANK ACCOUNTS?

The usury-avoidance clause that is a feature of all Discover Bank cardmember agreements.

DISCOVER FINANCIAL SERVICES & DISCOVER BANK: RELATED ENTITIES

Discover Financial Services - List of Subsidiaries incl. Discover Bank (2015)

OTHER CARD ISSUERS THAT BRING THEIR OWN LAWSUITS AGAINST CONSUMERS / CARD-HOLDERS

American Express Centurion Bank
American Express Bank, FSB
Bank of America (through FIA Card Services N.A.) 
Capital One Bank
Citibank, N.A.
Target National Bank