..

September 19, 2000

02 05 02 61 00091901

Mr. Ken Vaidya
Supervisor Disputes
Proof Department
Maryland Bank, NA
P.O. Box 15019
Wilmington, DE 19891
USA
..

Subject:	RMA# 1797954; Return Omnibook 4150
	MBNA Account....4195 MBNA letter dated September 5, 2000 Telecon Ken/Rod September 19, 2000

Dear Ken,
..
Thanks very much for assistance today in expediting subject matter. I, also, appreciated Elly's courtesy and professionalism, as a customer advocate.
..
This letter, together with the attached record of our telecon, notifies MBNA the charge by CDW of $4,449.60 is not approved, and was never approved. Welch granted CDW permission to effect a charge on our MBNA account provided that CDW delivered serviceable goods, free of defects. Since CDW failed to perform this part of our agreement, they were not authorized to charge our MBNA account, and so their charge is contrary to our agreement, fraudulent and invalid.
..
MBNA was notified on May 19, 2000 that CDW's charge was not approved by Welch. This notice was confirmed in writing on May 25. Since the account belongs to Welch, charges must be authorized by Welch. Since the charge has been expressly rejected by Welch, MBNA must show authority for acting in violation of customer instructions. As we discussed today, MBNA has failed to disclose any basis for accepting a charge which the customer has not approved.
..
You reported today that MBNA received the Welch letter dated August 24, 2000 which responds to MBNA's letter dated August 8. Your report today therefore corrects an error in MBNA's letter on September 5, 2000 which states that MBNA did not receive a response to its August 8 letter.
..
Today, you clarified MBNA's letter on September 5, as intending to convey that the content of the response was different from what you requested on August 8, and therefore justifies MBNA to charge the customer for defective goods shipped by a vendor.

Additionally, you stated today in substance and effect that regardless of uncontested evidence MBNA has that shows CDW shipped defective goods, and thereafter issued subject RMA, MBNA holds that unspecified language in a broad federal regulation enables a vendor to be paid for defective goods merely by refusing to make reasonable efforts to correct its mistakes, and can thereby cause the customer to pay for defective goods.
..
We received MBNA's letter dated September 5 on September 12, 7 days from the date of the letter. However, we did not receive MBNA's letter dated August 8, 2000 until August 18. The extended delay in receipt of MBNA's letter dated August 8 is critical, because MBNA proposes a deadline for action by the customer on August 21, particularly since August 18 is a Friday, and August 21 is a Monday. This is insufficient time for the customer to investigate the correctness of the proposed action and accomplish any actual requirement justified by the facts and applicable authority. Therefore, MBNA's deadline on August 21 is without force and effect. You acknowledged this in our call today, when you stated the actual deadline was September 1, which MBNA concealed from the customer.
..
Therefore, MBNA's notice on August 8 was defective in conveying false and misleading information that prevented compliance with any actual requirement. It is acknowledged that MBNA's intention was not mendacious, but was misguided, perhaps overtaken by circumstances in failing to properly report the record and give the customer sufficient time for compliance, due to a heavy work load burdening your staff.

Additionally, MBNA's notice on August 8 is defective, along with verbal notices, in that there is no disclosure of the basis for charging the customer to correct vendor mistakes, where such charge conflicts with customer instructions that the charge is not approved. As you stated, today, you are an expert interpreting applicable regulations. We have reasonably relied on MBNA to apply regulations fairly in the interests of both customer and vendor. MBNA has a fiduciary duty to do so. This duty is not discharged by vague references during phone calls to broad federal regulations; rather the duty requires express written disclosure of specific sections and language that support what, you admitted today, is an unreasonable position by CDW, which, if correct, would enable the vendor to escape responsibility and accountability for "doing the right thing." Accordingly, the customer has a reasonable basis to exercise caution. If you want your customer to take an unreasonable action, then you have a duty of notice to disclose the basis for such position, especially, where, as here, you claim superior knowledge. Since you deal with these matters daily, and since you know, or reasonably should know, that the customer does not have the same level of familiarity with requirements, MBNA has a heightened duty of disclosure to assist the customer, which has not been met in this case.
..
Therefore, based on the foregoing defects, MBNA's letter on August 8 is without effect, and there is no basis for MBNA to issue a charge to the customer's account on this matter, until proper notice is given, as set out herein. If MBNA makes any such charge that is contrary to the evidence it has that such charge is incorrect, this will cause Welch considerable damage, which MBNA has a duty to avoid, based on this notice. MBNA is thus not authorized to pay any monies to CDW on this matter, as set out in our letter on May 25, and stated again today in our telephone discussion.
..
Based on our discussion today, I appreciate the extra effort you and other members of your staff have made to resolve this issue without recourse to extended dispute resolution. MBNA has been a valued financial partner for nearly 12 years, and in all that time, has supported the customer with expertise and fairness. If you need additional information to help conclude this transaction, please let me know. I am sure we will work through this successfully for all parties.
..
Sincerely,

THE WELCH COMPANY

Rod Welch
rowelch@attglobal.net

..
Post Script

Even though your department cannot receive email, feel free to send us email to expedite communication. rowelch@attglobal.net