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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
Letting a consumer know about the statute of limitations can be a difficult needle to thread. There are often disclosures under state law that need to be made while collectors also look to caselaw and enforcement actions to see what judges and regulators have deemed to be sufficient and appropriate ways to let consumers know if the statute of limitations has expired or under what circumstances it could be restarted. A plaintiff has accused a collector of violating the Fair Debt Collection Practices Act because the statute of limitations disclosure in a letter is subject to at least five different interpretations, according to the complaint.
A copy of the complaint, originally filed in New York state court which was then removed by the defendant to federal court, can be accessed using case number 23-cv-03363 or by clicking here.
The letter, which offered to settle the debt for 45% of the balance that was owed, included the following statements:
- “… if you make a payment on a debt, admit to owing a debt, or promise to pay a debt, the time period in which the debt is enforceable in court may start again;”
- “However, your creditor or debt collector believes that restarting the time period on this debt is prohibited by law, and whether or not you acknowledge, promise to pay, or make a payment on this debt, your creditor or debt collector will NOT sue you to collect this debt;” and
- “If you waive the statute of limitations on a debt, the time period in which the debt is enforceable may start again.”
The complaint alleges the statements are open to at least five different interpretations:
- If payment, admission or promise to pay is made, the legal time period to enforce the debt in court may be restarted
- Restarting the time period to enforce the debt in court is illegal
- Even if restarting the time period to enforce the debt is legal, the defendants promise not to sue
- The defendants promise not to sue, but no promises concerning resale or reassignment of the debt
- If anyone other than the defendants acquire the rights to the debt after waiver of the statute of limitations, the time period in which the debt is enforceable in court may start again and you may be sued
The alleged issues with the letter led the plaintiff to expend time and money to determine the proper course of action and to mitigate the risks of financial and reputational harm, according to the complaint. The plaintiff allegedly suffered emotional and physical harm because of the letter, while also losing a chance to settle the debt for a discount.
The complaint accuses the defendant of violating Section 1692e, 1692e(2), 1692e(10), and 1692f of the FDCPA.