Cohen Introduces Legislation to Prevent Unreasonable Harassment from Debt Collectors

[WASHINGTON, DC] - Congressman Steve Cohen (TN-09) this week introduced legislation, the Fair Debt Collection Improvement Act, to protect Americans from the predatory and abusive tactics of debt collectors. The Congressman’s proposal would prevent debt collectors from threatening legal repercussions when none are available or tricking consumers into paying more than they would otherwise be legally obligated to pay.

“Just like the United States government, consumers should pay the debts they owe, but they still deserve protection from harassment and the abusive and predatory tactics used by some debt collectors,” said Congressman Cohen.

The Fair Debt Collection Improvement Act would clarify the Fair Debt Collection Practices Act of 1977 to explicitly bar debt collectors from bringing legal action against consumers on a debt for which the statute of limitations has expired. While this predatory practice is not currently illegal, most courts hold that creditors may not sue to collect such debts.

Because many creditors sell time-barred debts to secondary debt collection agencies with unsavory collection practices, Congressman Cohen’s legislation would also prevent those agencies from hiding or obscuring the legal rights of consumers when seeking to collect the debt. His bill would require collectors who have purchased time-barred debt on the secondary market to inform debtors that: the debt collector (not the original creditor) now holds the debt, the debt collector cannot sue for the debt, and that—if applicable under state law—any payment made towards the debt by the consumer could restart the statute of limitations on the entire debt.

The Fair Debt Collection Improvement Act is cosponsored by Representatives John Conyers (MI-13), Gwen Moore (WI-04), and Eleanor Holmes Norton (DC).