Representatives Cohen, Bonamici and Ocasio-Cortez Introduce Fair Debt Collection Improvement Act
WASHINGTON -- Congressman Steve Cohen (TN-09), joined by Congresswomen Suzanne Bonamici (OR-01) and Alexandria Ocasio-Cortez (NY-14), today introduced the Fair Debt Collection Improvement Act that would prohibit debt collectors from collecting or attempting to collect debt from consumers after a statute of limitation has expired.
“Predatory debt collection is unfair and must be stopped,” said Congressman Steve Cohen. “Consumers’ lives should not be interrupted by debt collectors aggressively trying to collect already-expired debt. This legislation protects consumers and ensures that they will be treated fairly.”
“For too long predatory debt collectors have been pressuring consumers to pay debts they do not legally owe, or may not even be theirs,” said Congresswoman Suzanne Bonamici. “These abusive debt collection practices hurt consumers and our communities, and they must be stopped. The Fair Debt Collection Improvement Act will protect families and individuals from being pressured to pay old debts that are not legally due.”
“This bill aims to prevent more predatory debt collection practices from taking place for consumers for which the statute of limitations has expired,” said Congresswoman Ocasio-Cortez. “Over time, records are lost and inconsistent evidence is presented that restarts the clock on debt that has expired. Consumers are owed these protections and I am proud to join my colleagues today to introduce the Fair Debt Collection Improvement Act.”
A statute of limitations is the legal time limit for filing a lawsuit. Courts have held that it is a violation of the Fair Debt Collection Practices Act to file or threaten to file a lawsuit after the deadline has expired. However, the FDCPA does not state that explicitly. Also, in most states, expiration of the statute of limitations is an affirmative defense that the consumer must know to raise, and most debt collection judgments are obtained either by default with the consumer not appearing or against a consumer who is not represented by an attorney. In addition, even if the statute of limitations to file a lawsuit has expired, in most states it is not unlawful to pursue these debts through other means.
Attempts to collect old, time-barred debt pose several problems. Statutes of limitation exist because, over time, records are lost and memories fade, making it difficult for people to defend themselves. That is also true for out-of-court collections, especially because debt collectors often buy old debt for pennies on the dollar, without adequate documentation that they have the right debtor or right amount owed. Debt buyers often pursue people who do not owe the money or for the wrong amount. In addition, some debt collectors trick consumers, who do not understand that they cannot be sued, into making a partial payment that may start the deadline all over and open the consumer to a lawsuit on an old debt.
The Fair Debt Collection Improvement Act would prohibit a debt collector from attempting to collect a debt after the statute of limitations has expired in order to ensure accuracy in debt collection, to prevent abusive tactics in the debt collection industry, and to allow consumers to get on with their lives.