CFPB Addresses Collection of Time-Barred Accounts, But More Guidance Needed

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With the Consumer Financial Protection Bureau (CFPB) scheduled to commence exercise of its rule-making authority later this year, many debt collection industry experts were surprised by a joint amicus brief filed by the FTC and the CFPB that stated in part, “…in some circumstances, a debt collector may seek voluntary payment of a time-barred debt without violating the FDCPA, even if the communication is silent as to the statute of limitations.”

Read the full amicus brief by the FTC and the CFPB at http://files.consumerfinance.gov/f/201309_cfpb_agency-brief_12-cv-04057.pdf

Consent orders earlier this year by the FTC regarding credit card surcharges (convenience fees) and voice mail messaging indicate a willingness by Federal regulators to allow these practices but provide little guidance for the industry, further confusing the matter.

Attorneys John Rossman and Mike Poncin examine the recent rulings the CFPB and FTC – and the possible implications of CFPB rulemaking – in the latest episode of their ARM legal audio blog The Debt Collection Drill.

Listen to the 9-minute episode below:

More Guidance Needed on CFPB and FTC Positions

(if you can’t see the player above, listen to the clip at http://traffic.libsyn.com/thedrill/TDCD_ep31.mp3)

Are you uncertain how to listen to a podcast such as The Debt Collection Drill?  Click here for a timely article on easy and productive ways to listen to a podcast.

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Posted in CFPB, Collection Laws and Regulations, Debt Buying, Debt Collection, Debt Statute of Limitations, FDCPA, Featured Post .

Continuing the Discussion

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  • avatar john -hilsmeyer says:

    “…in some circumstances, a debt collector may seek voluntary payment of a time-barred debt without violating the FDCPA, even if the communication is silent as to the statute of limitations.”

    Oh, well that certainly clears things up.

    “Sometimes you can, but not really. It depends”.

  • avatar john pratt says:

    In the case of Wisconsin, North Carolina and Mississippi, I suppose trying to collect a time barred debt may be a violation of the FDCPA since one cannot collect in those states after the SOL has passed. That is how I read that statement.

  • avatar Commercial Guy says:

    I think this is supposed to be en enlargement on the Asset Acceptance consent order, where they agreed to include a disclaimer in all correspondence on time-barred debt. Unfortunately, John Hilsmeyer seems to have it right…kind of a “We’ll let you know, after you do it, whether we consider this a violation.”

  • avatar Sisko says:

    http://www.insidearm.com/daily/collection-laws-regulations/collection-laws-and-regulations/cfpb-joins-ftc-in-amicus-brief-on-debt-collection-case/

    — In this case from last week, the FTC and CFPB said the exact opposite! Their legal brief said that a debt collector could NOT collect on a time-barred debt unless there is disclosure regarding the statute of limitations. They said it was misleading according to the FDCPA to send a settlement letter without the disclosure and opposed the debt collector’s motion to dismiss the case in the appeals court. Remember, if you’re confused about the FDCPA, it’s okay because apparently two government regulation agencies can’t figure it out either.

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