Before Wagner, Chief Judge, and Schwelb and Reid, Associate Judges.
The opinion of the court was delivered by: Reid, Associate Judge
Appeal from the Superior Court of the District of Columbia
(Hon. Stephen F. Eilperin Trial Judge)
The central issue presented in this case is whether, under the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq. (1994), a credit cardholder is required to avail himself of the billing dispute procedures of 15 U.S.C. § 1666 by notifying the creditor of disputed charges, in order to invoke the liability protections of 15 U.S.C. § 1643 against unauthorized charges to a credit card. Appellant Crestar Bank ("Crestar") filed a civil action against appellee Eric L. Cheevers alleging that Mr. Cheevers owed an outstanding credit card balance of $4,231.76, plus interest. Mr. Cheevers claimed that he did not make or authorize most of the charges alleged. The trial court concluded that the disputed charges were "unauthorized" within the meaning of 15 U.S.C. § 1643, and thus, Mr. Cheevers was not liable for them. We affirm, concluding that § 1666 imposes no mandatory notification requirement on the credit cardholder, and that Crestar failed to satisfy its burden of proof under § 1643 by showing that the charges on Mr. Cheevers' credit card were authorized, or that if unauthorized, the statutory conditions imposed on Crestar were not met.
The evidence at trial established that on April 3, 1992, Mr. Cheevers entered into an agreement with Crestar for use of a Visa credit card. At the time, he resided in the 1600 block of Kenyon Street, N.W., but notified Crestar in December 1992 of his move to another address. Crestar received regular and timely payments from Mr. Cheevers from April 1992 until December 1993. Mr. Cheevers made additional charges on his account in January, February and April 1994. After his April 1994 charge, he took the credit card out of his wallet to avoid further use because he was experiencing financial difficulties. He could not recall what he did with the card, but thought it may have been lost during his move from Kenyon Street.
When Mr. Cheevers' account became two months past due in June 1994, Crestar blocked the account from further transactions and mailed Mr. Cheevers a statement informing him that his privileges had been suspended. Despite the block on Mr. Cheevers' account, in October and November, 1994, charges totaling $3,583.92 were posted to Mr. Cheevers' card from Amtrak automated ticket machines.
In August 1994, Mr. Cheevers moved again and filled out a postal forwarding address card. On November 29, 1994, Crestar sent Mr. Cheevers a billing statement which included the charges from October and November. Mr. Cheevers testified that he never received the statement. Crestar's litigation department also sent a letter to Mr. Cheevers, but the letter was returned by the postal service to Crestar on December 14, 1994. At that time, Crestar charged the matter off as bad debt, turned it over to its attorneys, and stopped mailing monthly statements to Mr. Cheevers.
Sometime around November 1994, Crestar contacted the Amtrak Police Department about the charges on Mr. Cheevers' credit card. Raymond E. Wright, then a criminal investigator with the Amtrak Police, investigated the matter. He testified that the machines used to purchase the Amtrak tickets required no signature nor other identifying information, and took no photograph of the purchaser. He stated that the transactions amounting to thousands of dollars on Mr. Cheevers's card were unusual. He concluded that the ticket transactions were irregular and fraudulent.
In the early part of 1995, Crestar continued its efforts to collect from Mr. Cheevers the sums charged to his account. On March 8, 1995, an entry made by the Crestar collector assigned to the account stated: "This is probably fraud, no idea, real mess." On March 22, 1995, Crestar's attorneys called Mr. Cheevers and left a message on his machine. When they called back on April 8, 1995, the number was disconnected. On April 26, 1995, the attorneys contacted Mr. Cheevers' place of employment but were informed that he had been fired. On May 2, 1995, Crestar filed suit against Mr. Cheevers.
Mr. Cheevers testified that after changing jobs in April 1995, which resulted in his making more money, he contacted Crestar on July 24, 1995, without knowledge either of the October and November charges on his credit card or the lawsuit against him, because he wanted to pay off his balance which he believed was about $400. When the Crestar representative told him that the balance was about $4,500, Mr. Cheevers "became very alarmed and asked her why the amount was so high." The Crestar representative stated that fraud was suspected and suggested that he call Amtrak and Crestar's attorneys. Mr. Cheevers called Officer Wright and the attorneys. Subsequently, in January 1996, he notified Crestar, the bank's attorneys, and the Amtrak Police in writing that he disputed the October and November 1994 charges. He testified that he did not make the Amtrak charges, that he did not receive any benefit from the charges, that neither he nor his family traveled during that period of time, that he did not give tickets to anyone, and that he does not know who made the charges.
After the bench trial, the trial court ruled "for Mr. Cheevers as to all of the matters in dispute" and in favor of the bank for the undisputed amount of $617.84, plus prejudgment interest from September 1994. In particular, the court concluded that Crestar had failed to carry its burden of proof to show that the charges made on Mr. Cheevers' credit card were authorized, *fn1 and that Mr. Cheevers could not be assessed the statutory $50 fee "because the bank ha[d] not provided a method whereby the use[r] of the card can be identified as the person authorized to use it with respect to the charges that were incurred." Relying on Stieger, *fn2 the trial court also ...