A District Court judge in Arkansas has granted a defendant’s motion for judgment on the pleadings after it was sued for allegedly violating the Fair Debt Collection Practices Act because it failed to include a disclosure that a partial payment on a time-barred debt could revive the statute of limitations and by using “we will not sue you” in a collection letter instead of saying “we cannot sue you.”
A copy of the ruling in the case of Tillman v. Midland Credit Management can be accessed by clicking here.
The plaintiff received a collection letter from the defendant in regards to an unpaid credit card debt. The letter included the following disclosure: “[t]he law limits how long you can be sued on the debt. Because of the age of the debt, we will not sue you for it. If you do not pay the debt, we may report it to the credit reporting agencies as unpaid.” The plaintiff filed suit, alleging the letter violated Sections 1692e and 1692f of the FDCPA by failing to note that the statute of limitations could be reset if a partial payment was made and by saying the defendant was electing not to sue instead of prohibited from doing so.
In looking at a ruling from the Eighth Circuit Court of Appeals in Freyermuth v. Credit Bureau Services, Inc., in which it was determined that “in the absence of a threat of litigation or actual litigation, no violation of the FDCPA has occurred when a debt collector attempts to collect on a potentially time-barred debt that is otherwise valid,” the District Court judge ruled the letter made no false representations about the character, amount, or legal status of the debt because the defendant never threatened litigation or commenced litigation.
The judge also agreed with the defendants that including a revival statement about the statute of limitations was not required under the FDCPA.
“Although Defendants’ dunning letter does not warn that partial payments could revive the time-barred debt, the Court concludes that no unsophisticated consumer could be misled as to the debt’s legal status in light of the inclusion of language stating that the law limits how long a debtor can be sued on a debt and that Defendants would not sue Plaintiff on her debt because of its age,” wrote Chief District Judge Susan Hickey of the District Court for the Western District of Arkansas, Texarkana Division.
Finally, Judge Hickey determined that reading “we will not sue you” must be done in the proper context, especially when the letter also stated “the law limits how long you can be sued on the debt.”
