A District Court judge in Washington has granted summary judgment in favor of a defendant that was sued for allegedly violating the Fair Debt Collection Practices Act when it sent a collection letter to an individual to attempt to collect on a time-barred debt and did not inform the individual that any payment could revive the statute of limitations.
As many of you that collect in, or are very knowledgable about collection laws in, The Evergreen State will already be shouting out at your screens as you read this, a payment in and of itself is not enough to revive the statute of limitations in Washington.
A copy of the ruling in the case of Elston v. Encore Capital Group Inc., Midland Funding LLC & Midland Credit Management Inc., can be accessed by clicking here.
The plaintiff received a collection letter on a time-barred debt. The letter offered a number of payment options, ranging from a 40% discount on the amount owed if the total amount was paid, a 20% discount if the total amount was paid over a period of six months, and a $50 per month payment. Underneath the signature in the letter was the following statement:
The law limits how long you can be sued on a debt and how long a debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or nonpayment of it to a credit bureau.
The plaintiff did not make any payments and instead filed suit against the defendants, alleging the letter violated Sections 1692e(1) and 1692e(2) of the FDCPA by falsely representing the legal status of the debt and using false representations and/or deceptive means to collect or attempt to collect a debt.
By not acting on the letter and choosing to file suit once she received it, the plaintiff actually suffered no injury, ruled Judge Thomas Rice of the District Court for the Eastern District of Washington.
Here, Plaintiff does not claim that she was misled by anything in the letter. She does not allege that she was confused about the status of her debt or that she took any action based on Defendants’ alleged failure to warn her of the supposed risk of reviving the statute of limitations. She did not pay on the debt or make a promise to pay. Her debt has not been revived and there is nothing to suggest she is at risk of such. She simply received the letter and filed suit. As such, Plaintiff has not alleged any concrete harm based on her receiving the letter.
Judge Rice also looked at the merits of the case and ruled that the defendant did not violate the FDCPA because the defendant did not have to disclose the risks associated with a partial payment on the debt.
In Washington, a partial payment is not enough to revive the statute of limitations on a debt. The payment must be made under circumstances showing a clear and unequivocal intention on the part of the obligor to revive the whole debt, according to the ruling, adding that, the naked fact of payment or entry of credit is wholly insufficient.
The plaintiff, or any least sophisticated consumer, was not mislead because nothing more needed to be said, Judge Rice ruled.
