Credit card debt collection: Legal Theories of Recovery

Causes of action invoked by card issuers and their assignees to collect credit card debt in Texas courts: 

BREACH OF CONTRACT [breach of credit card agreement or default under terms of agreement] 

To prevail on its breach of contract cause of action, Citibank had to prove the following essential elements: (1) the existence of a valid contract, (2) performance or tendered performance by Citibank, (3) breach of the contract by Owusu, and (4) damages sustained as a result of the breach. See Winchek v. American Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.-Houston [1st Dist.] 2007, no pet.) (op. on reh'g).

ACCOUNT STATED THEORY OF RECOVERY [recently approved by several courts of appeals -- but  not all - as viable for debt collection by financial institutions without requiring them to produce the underlying cardmember agreement] 

A party is entitled to relief under the common law cause of action for account stated where (1) transactions between the parties give rise to indebtedness of one to the other; (2) an agreement, express or implied, between the parties fixes an amount due; and (3) the one to be charged makes a promise, express or implied, to pay the indebtedness. See Dulong v. Citibank (South Dakota), N.A., 261 S.W.3d 890, 893 (Tex. App.-Dallas 2008, no pet.). 

SOURCE: Dallas Court of Appeals - 05-10-00175-CV - 6/22/11