A District Court judge in Pennsylvania has denied a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act class-action lawsuit, ruling the defendant needed to disclose that a partial payment could restart the statute of limitations on a time-barred debt and that a reference to contacting the defendant by phone for further assistance overshadows that disputes must be made in writing.
The Background: The plaintiff received a collection letter from the defendant. The letter stated, in part, “The law limits how long you can be sued on a debt. Because of the age of your debt, LVNV Funding LLC cannot sue you for it, and LVNV Funding LLC cannot report it to any credit reporting agency.” The letter also stated, “[f]or further assistance, please contact one of our Customer Service Representatives toll-free at 1-888-665-0374.”
- The plaintiff filed suit, accusing the defendant of violating the FDCPA by not disclosing that a partial payment of the debt would restart the statute of limitations and by misleading the plaintiff by implying that a phone call was sufficient to discuss all facets of the account including disputing the debt, when in reality, a dispute must be made in writing.
The Ruling: Judge Julia K. Munley of the District Court for the Middle District of Pennsylvania found that under Pennsylvania law, a partial payment on a time-barred debt can restart the statute of limitations. Therefore, the letter’s failure to disclose this could potentially be found deceptive. She rejected arguments from the defendant that the letter stated the current legal status of the debt, which is what it was required to do, and that other courts have rejected similar theories put forth by plaintiffs in other jurisdictions, and that the Federal Trade Commission and Consumer Financial Protection Bureau have approved language similar to what was used in the letter.
- Judge Munley also rejected the defendant’s argument on the suit’s other claim, ruling that “a factfinder may find that the letter is deceptive and the validation notification with regard to the debtor’s full rights under the FDCPA” because the only way the plaintiff could preserve all of his rights is to dispute the debt in writing.
