NYC Debt Collection: The Business Record Rule

File RecordsWinning your New York debt collection case may hinge on your company’s record keeping abilities. In order to succeed and win your case you must prove

there was an agreement between you and your client(s) to perform (i.e.  render services or provide goods), prove that you performed as required and that there is an outstanding balance due.

Proving the above may be easiest by the person or people directly involved in the underlying transaction.  Because of various reasons, the people involved are not always available or wish to spend their time on a debt collection case.

Can you pursue and win your collection cases by having someone other than the person(s) directly involved testify in the case?  The answer is yes.

Testimony, either live or in writing by Affidavit, made by someone who was not directly involved may be considered “HEARSAY”.  This is because the witness lacks personal knowledge of the underlying transaction and relationship.

By using exceptions to the HEARSAY rule known as The Business Record Rule someone not directly involved can pursue and win the case.

The Business Record Rule will apply if two criteria are:

  1. The person testifying can state that the business records were maintained in accordance with office policies and procedures, maintained in the ordinary course of business, and,
  1. The records were prepared at or near the time of the underlying transaction.

Here is an example of applying the business record rule in a debt collection action:

A credit manager or another person can testify in open Court or by way of Affidavit.

They will need to explain the company’s established process of documenting the sale, performance, demand for payment and, the customer’s failure to pay in part or whole.

Documents including contracts, email exchanges, sign offs, proof of completion of services or delivery of the goods, invoices, statements of account and more may then be introduced into evidence.

So even though the credit manager is unfamiliar with the facts and circumstances of the claim, he or she is able to testify and prove your NYC debt collection case because of the preparation of supporting documents maintained in the ordinary course of business.

If you have questions, need help documenting or maintaining your records in the ordinary course of business or help collecting a claim in New York, contact Frank, Frank, Goldstein & Nager.