Cavalry Credit Card Case -

  • View

  • Download

Embed Size (px)


  • 7/27/2019 Cavalry Credit Card Case -




    The Defendant JOHN DOE (Defendant) pursuant to New York CPLR Article 31,requests that Plaintiff CAVALRY SPV I, LLC (Plaintiff), answer the followinginterrogatories separately, fully and completely, in writing and under oath withintwenty (20) days of service hereof:


    A. Acquiring Bank: A bank that contracts with merchants to accept, process, andsettle credit card transactions.

    B. Associations: The organizations that provide rules, advertising, and settlementservices.

    C. Authorization: The process of obtaining permission from the issuing bank toaccept the card for payment.

    D. Cardholder: A person to Whom a cardholder has been issued.

    E. Cardholder Agreement: A written, legal contract between the issuer and thecardholder. It contains the terms of the account and a schedule of various fees.

    F. Fedwire: The Federal Reserve Banks nationwide real-time gross settlement

    electronic funds and securities transfer network. It is a credit transfer system.Each funds transfer is settled individually against an institutions reserve orclearing account on the books of the Federal Reserve. The issuing bank pays theAssociation using Fedwire. To use Fedwire, a bank must hold an account at theFederal Reserve Bank and settlement is drawn from the account. The issuing bankmakes payments by sending a message over Fedwire that authorizes the FederalReserve Bank to electronically debit the banks Federal Reserve Bank account forthe net settlement amount and transfer the funds to the settlement bank. The

    Cavalry SPV I, LLC,As Assignee of GE Money Bank ,



    John Doe,



    Court Index No. ###

  • 7/27/2019 Cavalry Credit Card Case -



    transfers are essentially instantaneous. The settlement bank then pays themerchant bank using Fedwire.

    G. Interchange: The exchange of transaction data, information, and money betweenacquiring and issuing institutions participating in a payment network and inaccordance with the Associations by-laws and rules.

    H. Issuers: Financial institutions that supply (issue) cards to cardholders for use inperforming transactions.

    I. Merchants: Sellers of goods, services, and/or other information who accept creditcards as payment for these items. They have a signed merchant agreement tohonor credit cards and display the service mark.

    J. Merchant Processing: The routing of electronic transmissions from merchantsthrough the payment network for clearing and settlement. It is a separate anddistinct business line from credit card issuing. Merchant processing activity is, forthe most part, off-balance sheet and involves gathering sales information from themerchant, collecting funds from the issuing bank, and paying the merchant.

    K. Point-of-Sale Transactions: Face-to-Face transactions in which the cardholder usesthe physical card at a merchants physical place of business.

    L. Securitization: The process by which financial assets are transformed intosecurities.

    M. Settlement: As the card sales transaction value moves from merchant to acquiringbank to issuer, each party buys and sells the sales ticket. Settlement is what occurswhen the acquiring bank and the issuer exchange funds during that process.


    1. What is the Plaintiffs address and phone number?

    2. What is the Plaintiffs assignors address and phone number?

    3. Is there a Cardholder Agreement setting forth the material terms of the accountbeing sued upon in this action?

    4. What Truth in Lending Act disclosures did the Plaintiffs assignor provide to the

    Defendant prior to the issuance of the credit card account?

    5. What additional Truth in Lending Act disclosures did the Plaintiffs assignorprovide to the Defendant in monthly statements?

    6. If the terms of the account agreement were changed please state the changedterms, the date of the change in terms and the manner in which the change interms was communicated to the Defendant.

  • 7/27/2019 Cavalry Credit Card Case -



    7. If you contend that the Plaintiffs assignor extended credit to the Defendantidentify the date the credit was extended, the amount of the credit wasextended and the source of the credit that was extended.

    8. Did the receivable arising from the use of the credit card account serve as thebasis of a securitization?

    9. If you contend that the receivable arising from the use of the credit cardaccount did notserve as the basis of a securitization, identify the source of thefunds used by the Plaintiff for settlement of the point-of-sale transactions onthe account through Fedwire.

    10. For each agreement you contend was offered to and accepted by the Defendant,including but not limited to the original account agreement, any amendment tothe agreement, any notice of any change in terms of the agreement, or anyschedule of interest rates or fees applicable to the account, explain how theagreement was offered to and accepted by the Defendant.

    11. Explain how each document containing the terms of any agreement for the

    account or reflecting any amount due on the account was delivered to theDefendant, including but not limited to, the original account agreement, anyamendment to the agreement, any notice of a change in a term of theagreement, any schedule of interest rates or fees applicable to the account, anycredit card issued in connection with the account, and any statement ofpayments, charges, fees or interest for the account. Include in your explanationthe date the document was delivered and a description of the manner in whichit was delivered, including, if the document was delivered by the Postal Serviceor other courier, the location to which it was addressed and Whether thedocument was returned undelivered.

    12. For each document you contend applies to the subject credit card account and

    that does not contain the Defendants identifying information, such as theDefendants name, social security number, account number, or signature,explain how you know the document applies to the account.

    13. For each documented point-of-sale transaction(s) you contend applies to theaccount and was created by someone other than you or assignor, such as amerchant(s) or acquiring bank(s), identify the source of the documentation bystating the date you or assignor obtained the documentation and identify theperson from whom you or assignor obtained the documentation.

    14. Identify the consideration supporting the payment obligation of the Defendantunder the terms of the cardholder agreement.

    15. Identify with particularity the damages the Plaintiff or assignor suffered as aresult of the Defendants failure to pay on the account.

    16. If the Plaintiffs assignor contends that it loaned the Defendant money oradvanced money to any third party when the Defendant used the credit cardaccount, identify the source of the money used by the Plaintiffs assignor forsettlement.

  • 7/27/2019 Cavalry Credit Card Case -



    17. Did the Plaintiffs assignor adhere to Generally Accepted Accounting Principles(GAAP)when it established the credit card account in the name of theDefendant?

    18. Did the Plaintiffs assignor adhere to the Board of Governors of the FederalReserve Systems policies and procedures for the issuance of credit cards?

    19. Does the Plaintiff or its assignor agree that the intent of the cardholderagreement requires that only the party who provided the money that funded thesettlement of the point-of-sale transactions is to be repaid the money plus theagreed upon interest?

    20. According to the terms of the cardholder agreement does the Plaintiff or itsassignor agree that Generally Accepted Accounting Principles (GAAP) were to befollowed, including the matching principle as outlined in GAAP?

    21. Pursuant to CPLR Rule 3018, what are the names and post office addresses ofthe Plaintiffs chief executive officer, the chief financial officer, and the officer(s)

    or executive(s) who is/are responsible for the negotiation and acquisition ofcredit card receivable assignments from original creditors? Please provide theforegoing information regardless of what titles these individuals may havewithin Plaintiffs organization.

    22. What are the names, post office addresses, phone numbers and any othercontact information of the Plaintiffsassignors officer(s) or executive(s) whoassigned the subject credit card receivables to the Plaintiff? Please provide theforegoing information regardless of what titles these individuals may havewithin Plaintiffs assignors organization.

    Dated: April 8, 2013

    ..John Doe, Defendant Pro SeAddressPhone No.