A New Jersey appeals court has upheld a ruling in favor of a defendant that was sued in a class action for violating the Fair Debt Collection Practices Act, ruling a boilerplate statute of limitations disclosure made by the defendant was not materially deceptive.
The Background: The plaintiff incurred a debt that was owed to the defendant. The defendant sent the plaintiff a letter, offering to settle the $613 debt for $170.75. The letter included the following disclosure:
- The law limits how long you can be sued on a debt. Because of the age of your debt, you cannot be sued for it. In many circumstances, you can renew the debt and start the time period for the filing of the lawsuit against you if you take specific actions such as making certain payments on the debt or making a written promise to pay. You should determine the effect of any actions with respect to this debt.
- The plaintiff filed a class-action lawsuit, alleging the disclosure was deceptive because she could be sued the the debt — if she were sued, she could then assert the statute of limitations as an affirmative defense — because the statement about restarting the time was misleading because it could restart if she took certain actions, and because the statement about the effect of certain payments was misleading.
- A state court judge rejected all three arguments, essentially saying that this was just a communication about a debt and not a lawsuit. “Had defendant filed a lawsuit without conducting a reasonable inquiry as to the age of the debt, a violation of the FDCPA may have occurred, although plaintiff would have had a defense in the statute of limitations,” the judge ruled.
The Ruling: General warnings are not materially deceptive that would impact a least sophisticated borrower’s ability to make a decision, the Appeals Court wrote. That is especially true when adding the last sentence of the disclosure, informing the plaintiff to determine the effect of any action to repay the debt.
- “… none of the statements are materially deceptive. Instead, they provide accurate warnings to the least sophisticated consumer that the debt is too old to subject plaintiff to legal liability, but if she chose to take any action with respect to the debt, it could restart the statute of limitations and warned, generally, to proceed cautiously in taking any action.”
