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Amending The Fair Debt Collection Practices Act


On October 30, 2013, U.S. Representative Steve Cohen (D-TN) introduced H.R. 3402, the Fair Debt Collection Improvement Act. The bill was referred to committee. This does not mean that the bill will ever make it to the House Floor. From 2011-2013, only 11% of proposed bills made it to the floor. Given that the House remains gridlocked, the odds that the bill will make it to the floor and pass the House are even lower.

The text of the bill was not yet available as of Monday, November 4, 2013. However, the bill seeks to prohibit debt collectors from filing lawsuits based on debts that are past the statute of limitations. As someone who defends debt collection lawsuits, I have seen cases where the debt is past the statute of limitations. In these cases, many people admit to judgment because they don't know that the debt is past the statute.

The bill would also require that debt collectors give very specific communications when trying to collect on debts that are past the statute of limitations. In addition to listing the name of the original creditor and the disclosure that the original creditor no longer holds the debt, such letters must also disclose that the debt is past the statute of limitations, can no longer be sued upon, and that making a payment may revive the statute of limitations.

That last disclosure is key. The Seventh Circuit is currently considering a case based on deceptive debt collection letters that do not disclose that a debt is past the statute of limitations. Our offices recently filed a lawsuit against a debt collector for failing to disclose the effect of making a payment on a debt that is past the statute of limitations. Unwary consumers may make a payment in good faith and find themselves back on the hook for a debt that can no longer be collected.

While this bill has very little hope of making it to the Senate, it does have three co-sponsors. It could use more. If you want to see the FDCPA provide more protection to consumers, then it would be wise to contact your Congressperson and voice your support for H.R. 3402.