Representatives Cohen, Ocasio-Cortez and Bonamici Introduce Fair Debt Collection Improvement Act
WASHINGTON -- Congressman Steve Cohen (TN-09), joined by Congresswomen Alexandria Ocasio-Cortez (NY-14) and Suzanne Bonamici (OR-01), 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 must be stopped,” said Congressman Steve Cohen. “Consumers’ lives should not be interrupted by debt collectors aggressively trying to collect expired debt. My legislation protects consumers and ensures that they are treated fairly.”
“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.”
“As a former consumer protection attorney, I know that unscrupulous debt collectors often use deceptive tactics,” said Congresswoman Suzanne Bonamici. “In 2018 alone, the FTC received nearly 500,000 complaints about abusive debt collection practices. This is unacceptable. Debt collectors should not use unreliable or out-of-date records to trick or coerce consumers into wrongfully paying debts that are not legally due — or may not even be theirs. I’m proud to co-sponsor this legislation to protect families and individuals in Oregon and around the country from abusive debt collection practices.”
The 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 say so 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 limitations exist because after the expiration of 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 buyers often buy old debt for pennies on the dollar, without adequate documentation that they have the right person or right amount. 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 up 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 eventually to get on with their lives.
The bill is supported by the National Association of Consumer Advocates, The National Consumer Law Center (on behalf of its low income clients), the National Consumers League, Americans for Financial Reform, the Center for Responsible Lending, and Consumer Reports.