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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
A class-action complaint has been filed in a New York District Court over the statute of limitations disclosure in a Model Validation Notice sent to an individual, who claims the notifications — required by the New York Department of Financial Services — were contradictory and resulted in five different reasonable interpretations of what might happen.
A copy of the complaint, filed in the District Court for the Southern District of New York can be accessed using case number 22-cv-09289 or by clicking here.
The Notice sent to the consumer included a disclosure on the reverse side that is required by the NY DFS. The disclosure, in part, said, “… if you make a payment on a debt, admit to owing a debt, or promise to pay a debt, the time period in which the debt is enforceable in court may start again. However, your creditor or debt collector believes that restarting the time period on this debt is prohibited by law, and whether or not you acknowledge, promise to pay, or make a payment on this debt, your creditor or debt collector will NOT sue you to collect this debt. If you waive the statute of limitations on a debt, the time period in which the debt is enforceable in court may start again.”
Along with the contradictory nature of the disclosure, the plaintiff also claims the notice failed to explain whether the debt could be sold or transferred to a new creditor or debt collector that may choose to file a lawsuit if the plaintiff acknowledged the debt by making a payment or a promise to pay the debt.
The plaintiff alleges that the statement creates five different interpretations of what could happen, including:
- First, if payment, admission or promise to pay is made, the legal time period to enforce the debt in court may be restarted.
- Second, restarting the time period to enforce the debt in court is illegal.
- Third, even if restarting the time period to enforce the debt is legal, Defendant and BofA promise not to sue.
- Fourth, Defendant and BofA promise not to sue, but no promises concerning resale or reassignment of the debt.
- Fifth, if anyone other than Defendant and BofA acquire rights to the debt after waiver of the statute of limitations, the time period in which the debt is enforceable in court may start again and you may be sued.
The complaint accuses the defendant of violating Sections 1692e, 1692e(2), 1692e(10), and 1692f of the Fair Debt Collection Practices Act. It seeks to include anyone who received a similar notice that included the NY DFS statute of limitations disclosure on the reverse side of the notice.
