Thanks to the folks at Maurice Wutscher, we know that the California legislature this week passed a bill that will require debt collectors to provide notification to individuals when attempting to collect a debt where the statute of limitations has expired.
The bill, A.B. 1526, provides two different notifications that debt collectors can use when attempting to collect on a time-barred debt, depending on age of the debt.
If the debt is “not past the date for obsolescence set forth in Section 605(a) of the federal Fair Credit Reporting Act,” the following language must be included:
“The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, [insert name of debt collector] may [continue to] report it to the credit reporting agencies as unpaid for as long as the law permits this reporting.”
If the debt is “past the date for obsolescence set forth in Section 605(a) of the federal Fair Credit Reporting Act”, the following language must be included:
“The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency.”
Under Section 605(a) of the FCRA, the law sets a seven-year limit for reporting collection-related items on a credit report.
The language must be included in the first written communication sent to an individual by a collection agency, as defined under the state’s Rosenthal Fair Debt Collection Practices Act.
If the bill is signed into law by California Gov. Jerry Brown, it will go into effect on Jan. 1, 2019.
