More than 70% of consumer attorneys have represented individuals who were threatened with a lawsuit by a debt collector to try and recover a time-barred debt, and nearly two-thirds of those attorneys have “recently” worked on cases where a lawsuit to collect on a time-barred debt was actually filed, according to the results of a survey conducted by the National Association of Consumer Advocates that was released yesterday.
The survey was conducted after the release of the proposed debt collection rule from the Consumer Financial Protection Bureau. Consumer advocates were hoping for tighter restrictions, perhaps even an outright ban, on collecting debts where the statute of limitations has expired, but the CFPB did no such thing in the proposed rule. In the survey, 134 consumer attorneys, many of whom dedicate a significant portion of their time to debt collection cases, shared their clients’ experiences.
Relative to the proposed call cap of seven attempts per week per debt, the survey revealed that 79% of private attorneys and 74% of legal aid organizations had clients who received seven or more calls per week. And 81% of responding attorneys said that debt collectors did not stop calling individuals when they were asked to do so.
The attorneys also indicated that consumers are having a very difficult time understanding the disclosures related to time-barred debt collection. From the report:
The majority of responding consumer attorneys (65%) has worked on cases for consumerclients who received a written disclosure from a debt collector related to the collection of time-barred debt. More than half said that their clients “rarely” understood the disclosures. Legal aid attorneys, in particular, 85% of them, said that their clients “rarely” or “never” understood the disclosures. Meanwhile, only seven private and legal services attorneys in total said that their clients “usually” or “always” understand the time-barred debt disclosures.
