Motion to Compel Arbitration in FDCPA Class Action Denied Over Lack of Proof That Plaintiff Signed Agreement

A District Court judge in Illinois has denied a defendant’s motion to compel arbitration in a Fair Debt Collection Practices Act class action because it did not prove that the plaintiff actually agreed to the terms and conditions when he signed up for a cell phone contract.

A copy of the ruling in the case of Gilbert v. I.C. System can be accessed by clicking here.

The plaintiff claimed that the balance of the debt was changing on a monthly basis because of interest or other charges being added to his account, but that was not mentioned in a collection letter sent by the defendant. The plaintiff alleged he could have paid the amount that was referenced in the letter, and not known that he still had a balance on his account. It was the defendant’s responsibility, the plaintiff claimed, to inform him that “if he paid the amount due as stated in the Collection Letter, an adjustment may be necessary,” and that the defendant “would inform [the plaintiff] before depositing the check for collection.”

The defendant filed a motion to compel arbitration, including a copy of the terms and conditions of the original agreement. But the copy of the terms and conditions appeared to come from the original creditor’s website and were not part of a signed contract, noted Judge Franklin Valderrama of the District Court for the Northern District of Illinois, even though the document stated that by activating or using the service, the plaintiff accepted the terms and conditions of the agreement.

“The Court is left to guess whether [the plaintiff] was meaningfully informed of the Terms and Conditions and whether [the creditor] reasonably communicated to [the plaintiff] that any of his actions would equal an assent to the Terms and Conditions,” Judge Valderrama wrote. The defendant “has the burden of proving the existence of a valid contract. Without evidence showing Gilbert’s assent to the submitted Terms and Conditions, the Court cannot determine whether a valid contract exists.”

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