Under Appendix E of 12 C.F.R. § 1022.42(b), the policies and procedures of a furnisher of information to credit reporting agencies (e.g. a credit card issuer) must be reasonably designed to ensure that information furnished with respect to a consumer account “[r]eflects the terms of and liability” of the account and “[r]eflects the consumer's performance and other conduct with respect to the account”.

Separately, subsection (c) of that appendix provides that a furnisher should “maintain[ ] records for a reasonable period of time, not less than any applicable recordkeeping requirement, in order to substantiate the accuracy of any information about consumers it furnishes that is subject to a direct dispute”.

Under the terms of many credit card agreements, as well as 12 C.F.R. § 1026.7, a credit card issuer has a duty to provide a cardholder with a periodic billing statement containing the payment due date.

Arguably, if a cardholder misses a payment as a result of statement non-receipt, then it is inaccurate to report to the credit reporting agencies that the payment was "late" as that does not reflect the “terms of” the account or the "consumer's performance and other conduct with respect to the account".

Is it lawful for a credit card issuer to have a retention policy such that it cannot prove or disprove an allegation of statement non-receipt by a consumer?

With respect to the specific scenario: (1) Consumer signed up for paperless billing statements. (2) Consumer alleges that bank failed to provide them, presumably due to a software glitch. (3) Consumer missed a payment as a result and the late payment was reported to the credit bureaus. (4) Consumer tried and failed to have bank correct the reporting without litigation. (5) Consumer sued bank two years later. (6) Bank admitted records necessary to prove or disprove consumer's allegation are only retained for one year. (7) Bank argued that the consumer has the burden to prove non-receipt and cannot do so.


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presumably due to a software glitch

You can prove that?

I’ll give you several other equally “presumable” scenarios:

  • the Post Office lost it. It happens and if the bank can show they posted it, that’s your problem.
  • it was stolen from your mailbox. You can prove you keep your mailbox locked?
  • you got it and misfiled it and forgot about it.
  • you got it, missed the payment and are now making up this whole story about never receiving it.

In most scenarios, a sender cannot conclusively “prove” that they posted a given item - even mail receipts only shows that something was sent, not what was sent. Similarly, a receiver cannot usually “prove” that they didn’t receive something - unless they can provide a comprehensive logbook showing it was their practice to log all mail received and that one wasn’t in the log.

However, the bank will almost certainly lead evidence that their “policies and procedures” involve the generation of statements and the mailing of them to customers. They will show evidence of your other payments in response to other statements and suggest to the court that there is no reason to believe that this statement was any different.

You will present evidence of … what is your evidence?

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    The question is whether the bank’s retention period is unlawful. Whether one consumer has evidence to support specific case has no bearing on the answer in general, right? Commented Oct 26, 2021 at 20:43
  • To clarify what I mean by “prove or disprove”—these are paperless statements, i.e., delivered electronically. The arrangement, as is common practice, was for the bank to “post” the statements to a website that the consumer had access to. A bank can certainly have an employee testify as to the reliability of the system responsible for the posting, etc. in general -- but that is distinct from specific record-keeping, e.g., a timestamped log entry showing a specific statement was posted/sent. Commented Oct 26, 2021 at 20:49
  • To be clear, I don't think the paper or paperless angle is material, either. My understanding is that, for a paper statement, a rebuttable presumption of receipt is established only when the sender proves the statement is sent. There's no question that if the bank kept records that specific statements were mailed, that would be sufficient. The analogous question for paper is -- what if they only retained those records for a year? Commented Oct 26, 2021 at 20:58
  • "However, the bank will almost certainly lead evidence that their 'policies and procedures' involve the generation of statements and the mailing of them to customers." They did not (and cannot as the evidentiary record is closed). Commented Oct 26, 2021 at 21:02
  • "You will present evidence of … what is your evidence?" Sworn testimony and corroborating circumstantial evidence (e.g. audio of call with tech support complaining about the issue prior to the late payment). Although, admittedly, IANAL, so I do not know the weight that a fact-finder would give to the corroborating evidence. Commented Oct 26, 2021 at 21:08

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