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Sued by Webbank — How to Win

Chloe Meltzer | January 10, 2024

Chloe-Meltzer
Legal Expert
Chloe Meltzer, MA

Chloe Meltzer is an experienced content writer specializing in legal content creation. She holds a degree in English Literature from Arizona State University, complemented by a Master’s in Marketing from California Polytechnic State University-San Luis Obispo.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: WebBank is a digital bank, based in Utah, that finances companies in all sorts of industries. WebBank is known its predatory interest rates, and it has even been involved in some class action lawsuits because of it. If you are being sued by WebBank, use SoloSuit to draft and file your response before your state's deadline.

If WebBank is suing you, you need to know exactly how to respond to avoid making matters worse. Although it might feel like you have no hope, there are many avenues that you can take to improve your situation. It might feel like you should avoid it, but that is the last thing you should do.

It is commonly known that WebBank, a consumer debt agency, forces customers to sign contracts. It's common to never receive a copy of your contacts with WebBank because mandatory arbitration is required in these contracts. This can make it difficult for customers to file suit in court. Despite this, if you are being pursued for a debt by WebBank, you can respond and beat them in court.

Here's how.

Don't let debt collectors get a default judgment against you; respond with SoloSuit.

What is WebBank, and how does it work?

Located in Salt Lake City, UT, WebBank is a “national issuer of consumer and small business credit products,” which is just a fancy way of saying it is a bank that funds consumer and commercial loan products, revolving lines of credit, credit cards, private-label card issuance, auto-refinancing and more. WebBank has been known to finance companies like Fingerhut, Dell Computer, Yamaha, Avant, Klarna, Lending Club, Onemain Financial, and Paypal, to name a few.

If you've entered an agreement with any of the companies or services listed above, it is likely that WebBank financed it. So, when WebBank comes after you for a debt you owe, you might not even recognize the name “WebBank.” They might even sell your debt account to a debt collection agency or hire one to collect on their behalf, which makes things even more confusing.

You can reach WebBank at the following address:

WebBank
215 S. State St.
Suite 1000
Salt Lake City, UT 84111

If you're being sued by WebBank, the first step to winning in court is to understand your rights and to file an Answer to the lawsuit.

You have rights that protect you under the FDCPA

The Fair Debt Collection Practices Act (FDCPA) protects consumers, like you, from unethical debt collection practices. For example, the FDCPA prohibits debt collectors from:

  • Calling consumers before 8 a.m. or after 9 p.m.
  • Using abusive, threatening, or vulgar language to intimidate consumers into paying off a debt.
  • Threatening to arrest or take legal action that they cannot or do not plan to take.
  • Pretending to be the police or a judge.
  • Discussing a consumer's debt with their friends, family, or coworkers.
  • Calling consumers at their workplace when the employer prohibits such communications.

These are just some of the ways that the FDCPA protects consumers. If WebBank collectors or a debt collection agency representing WebBank, have used any of these tactics to get you to pay off your debt, report it to the FTC, CFPB, or your state's attorney general. You may be eligible for compensation of up to $1,000 per violation of the FDCPA.

Respond to a debt lawsuit against WebBank

If WebBank is coming after you for a debt, don't ignore it, especially if you're being sued. This will only result in a default judgment, which gives WebBank the ability to garnish your wages, seize your property, or even take money directly from your bank account.

If you've been sued by WebBank, respond immediately by filing an Answer with the court and sending a copy of it to the attorneys representing WebBank. Check out this video to learn more about how to respond to a debt collection lawsuit:

What you need to know about the hearing

When you go to your debt collections hearing, you will be able to plead your case. Whether you owe the debt or do not owe the debt, you should still try to find an affirmative defense. For example, you can always ask WebBank to prove that you owe the debt. The case will be dismissed if they cannot prove that you owe the debt or that they own the debt and have the right to pursue you for it.

You can also attempt to settle before going to your hearing as well. This can allow you to have other options, such as setting up a payment plan or settling for a lower amount than you originally owed.

In some cases, you may not feel that you owe the debt. This might be a situation where you can invoke other affirmative defenses. In these cases, you may have purchased something defective or that never arrived, or the contract was originally illegal. You may also have signed it without knowing the terms. In any case, these are defenses against a Webbank suit.

Whatever your situation, making your decision is one that can only be done based on your situation. But what you must remember is to always respond to a debt collection lawsuit.

How does the WebBank arbitration clause work?

Because WebBank requires arbitration, you should not feel powerless. WebBank requires this to limit their damages, but you can use it against them to increase the chances of WebBank dropping a lawsuit. Arbitration typically only helps WebBank when it comes to class action lawsuits or larger cases over $10,000.

When it comes to smaller cases under $10,000, arbitration is often not worth the cost of the debt. For example, the filing costs for arbitration can range from a few hundred dollars to $2,500 or more. If your initial contract with WebBank contains a mandatory arbitration clause, WebBank may have no choice but to pursue arbitration before filing a lawsuit. If you exercise your right to arbitration, WebBank may decide to drop the case altogether. Regardless, there are a few things you need to do if WebBank has sued you.

WebBank was involved in a Supreme Court class action lawsuit

A Motion to Compel Arbitration in Bethune v. Lending Club Corporation et al., spun a carefully-watched class action suit. In this case, the plaintiff filed a complaint in April 2016 disputing a loan received through Lending Club's online platform and provided by WebBank.

To understand the heart of the case, it is essential to understand that most states have “usury laws” designed to protect consumers from predatory interest rates. The plaintiff, Mr. Bethune, filed the class action lawsuit claiming that WebBank took advantage of consumers by using the usury laws of it's chartered state of Utah, instead of complying with the laws of the state where each consumer resides. Mr. Bethune is from New York, where interest rates are capped at 16%. Utah's interest rates, with a contract, are capped at 50%.

Mr. Bethune claimed that by lending to borrowers at interest rates higher than the usury caps in the borrowers' home states, the defendants broke state usury laws and state consumer protection laws.

The court quickly dismissed the plaintiff's "perfunctory" argument that the arbitration agreement was inherently unconscionable. The plaintiff had 30 days to opt-out of the arbitration clause, and failed to do so. Therefore, the district court where the case was filed upheld the defendant's right to force the issue into arbitration. The stated arbitration clause required that the issue be arbitrated on an individual basis, protecting the lender from a class action suit. Lending Tree eventually agreed to pay a $2 million penalty to resolve the allegations. Both Lending Tree and WebBank made no admission of responsibility.

How does WebBank Fingerhut work?

The Fingerhut FreshStart installment loan and the Fingerhut Advantage Credit Account are offered through WebBank. These items can be used to finance orders placed through Fingerhut's catalog or website.

The WebBank Fingerhut Credit Account is a revolving line of credit, much like a credit card. It is promoted as a solution for internet buyers to establish credit while making periodic payments on their goods.

Is Fingerhut suing me?

If you owe Fingerhut money, they have the right to sue you and possibly obtain a judgment against you. The first step to winning in court is to file your Answer. You can use SoloSuit to respond to the lawsuit in just 15 minutes.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

Respond with SoloSuit

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