Not only are the NCSLT loans suffering from a distinct lack of documentation to validate the loans but in California an attorney can raise another issue to invalidate the loan if the debtor is sued.
Christine says in her experience the vast majority of the NCSLT loans are cosigned and in California they are not complying with the co-signer statute. In addition when NCSLT sues it is almost always outside the Statute of Limitations which is another defense to raise.
Under the California co-signer statute it says:
CA CIV. Code §1799.91, (a) Unless the persons are married to each other, each creditor who obtains the signature of more than one person on a consumer credit contract shall deliver to each person who does not in fact receive any of the money, property, or services which are the subject matter of the consumer credit contract, prior to that person’s becoming obligated on the consumer credit contract, a notice in English and Spanish in at least 10-point type as follows:
NOTICE TO COSIGNER (Traducción en Inglés Se Requiere Por La Ley)
You are being asked to guarantee this debt. Think carefully before you do. If the borrower doesn’t pay the debt, you will have to. Be sure you can afford to pay if you have to, and that you want to accept this responsibility.
You may have to pay up to the full amount of the debt if the borrower does not pay. You may also have to pay late fees or collection costs, which increase this amount.
The creditor can collect this debt from you without first trying to collect from the borrower. The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become a part of your credit record.
This notice is not on the contract that makes you liable for the debt.
CA CIV. Code §1799.92, (a) If the notice required by Section 1799.91 is included with the text of the consumer credit contract or with any other document establishing the liability of the person, the statement shall appear immediately above the space reserved for that person’s signature or above or adjacent to any other notices required by law to be placed immediately above the signature space and shall be contained in a box formed by a heavy line.
(b) If the notice required by Section 1799.91 is not included with the text of the consumer credit contract it shall be on a separate sheet which shall not contain any other text except as is necessary to identify the creditor and consumer credit contract to which the statement refers and to provide for the date and the person’s acknowledgment of receipt.
Christine adds, “National Collegiate’s contract provides no such disclosures immediately above the space where Defendant’s signature appears. Further, in violation of CA CIV. Code §1799.92(b), the copy of a “FEDERAL AND CALIFORNIA COSIGNER NOTICES” sheet attached as part of the Contract, and thus is not included with the text of the consumer credit contract. Such notice also fails to provide for the date and acknowledgment of receipt of the notice. Without Defendant’s signature and date, acknowledging that she has received any such required notices, National Collegiate cannot initiate a collections lawsuit against her because they lack standing to sue. This is a legal defect that leave to amend cannot cure.”
If you live in California and have an issue with a NCSLT loan you can contact Attorney Christine Kingston at www.attorneychristine.com or 714-533-9210.