Quick Answer: The CFPB and FTC argue that debt collectors must disclose when debts are time-barred and cannot be legally enforced through lawsuits. In Delgado v. Capital Management Services, regulators claim that failing to reveal statute of limitations status while demanding payment constitutes misleading debt collection practices under the FDCPA.
On August 14, 2013, the CFPB, jointly with the FTC, filed an amicus brief in Delgado v. Capital Management Services, LP, et al., a case on appeal to the Seventh Circuit. The brief urges the Seventh Circuit to affirm the district court’s refusal to dismiss a class action complaint alleging that a debt collector’s letter offering a settlement of the plaintiff’s credit card debt violated the Fair Debt Collection Practices Act (FDCPA) because it did not disclose that the debt was time-barred.
Even though the letter did not threaten litigation, the plaintiff claimed that the letter nevertheless violated the FDCPA’s prohibition of a debt collector’s use of “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” According to the plaintiff, the collector’s failure to disclose that the debt was time-barred, together with setting a 45-day deadline for paying the settlement amount, amounted to a misleading representation that the debt could be legally enforced. – Source
Do you think debt collection companies should inform consumers when the debt can’t be collected by suit or is outside the statute of limitations?
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Know Your Rights: If a debt collector is contacting you, you have legal protections. See the complete list of FDCPA violations collectors commit most often. Use the free Debt Validation Letter Generator to demand proof of the debt, or check this collector’s complaint history with the Scam-O-Meter.
Dealing With Debt? Before you pay a collector, understand all your debt relief options — including ones the collector won’t tell you about. If the debt feels unmanageable, take the 2-minute bankruptcy quiz to see if the math favors a fresh start. Federal Reserve research shows filers recover faster than those who don’t file.
