A District Court judge in Colorado has granted a defendant’s motion for summary judgment after being sued for allegedly violating the Fair Debt Collection Practices Act by saying it would not sue to collect on a time-barred debt instead of saying it could not sue to collect on it.
A copy of the ruling in the case of Goodman v. Asset Acceptance & Encore Capital Group can be accessed by clicking here.
In two separate regulatory actions — one with the Federal Trade Commission in 2012 and one with the Consumer Financial Protection Bureau in 2015 — the defendants were provided with statements to include in collection letters related to time-barred debts. The FTC’s required disclosure was, “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.” The CFPB’s disclosure was, “The law limits how long you can be sued on a debt and how long 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 non-payment of it to a credit bureau.”
The plaintiff received letters from the defendants, one in March 2013 that included the FTC’s disclosure and one in June 2018 that included the CFPB’s disclosure. The plaintiff filed suit, alleging the letters violated Section 1692e of the FDCPA, which prohibits the use of false, deceptive, or misleading representations when collecting on a debt. By saying that the defendant would not sue instead of saying it could not sue, the letters allegedly violated the FDCPA, the plaintiff claimed.
The plaintiff also claimed that the letters violated the FDCPA because they did not include a disclosure stating that a partial payment on a time-barred debt may revive the statute of limitations.
Agreeing with other judges from the same Circuit, Judge Raymond Moore of the District Court for the District of Colorado ruled that the disclosure was not misleading, especially considering that both the FTC and CFPB have used the exact same phrasing in its enforcement actions against the defendants.
“While such consent decrees are not binding or controlling, and are the result of compromises, they nonetheless assist the Court in making an informed decision that the language complained of is not misleading,” Judge Moore wrote.
