Collector - February 2016 - 21


agencies must verify the application or
request is not the result of identity theft.
Warshaw said he sees a lot of agencies
struggle with how they handle fraud
alerts, but it's always best to approach
them with caution.
"There are a lot of people out there who
are claiming fraud," Warsaw said. "Even if
people are trained to claim fraud because
it's part of their credit repair service or some
other scheme to help improve their score,
you have to respond to it."
He recommends that when agencies
respond to a claim of fraud, they give the
consumer the Federal Trade Commission
Fraud Affidavit, which is available on
www.ftc.gov.

STATUTES OF LIMITATIONS
CONCERNS
Collectors should be aware of applicable
statutes of limitations for states where they
collect. How the statutes of limitations
apply to a debt varies from state-to-state
and case-to-case.
"It depends upon the contract of the debt
you're collecting," Warshaw said. "If there
is a contract, it may have a choice of law
provision. Some states may have borrowing
statutes. We have to look at every single
claim that we have and we have to decide
which state's statute of limitations applies.
It fluctuates-you could have a three-year
statute or a six-year statute depending on
what state law applies, regardless of what you
thought to be the simple time period provided
for by your state. For example, if I am
collecting debt against a New Jersey resident,
New Jersey has a six-year limitations period
on breach of contract claims. But if New
Jersey law does not apply, then the limitations
period could be shorter than six years."
Different markets also have their own
nuances that may overrule the common
statute of limitations application. Anything
governed by the Uniform Commercial
Code-like auto loans, for example-has a
four-year statute of limitations.
"You should be very careful and
thoughtful about doing that statute of
limitations analysis," Warshaw said.

COLLECTOR 02.16

Agencies must determine the applicable
statute of limitations before starting
collection proceedings-even if a consumer
makes payments on the debt after the
statute of limitations expired.
Reaffirmation of debt for statute of
limitations purposes is a hazy issue,
dependent on a number of factors. "You
can't just turn the light switch on if there
is a payment after the statute first ran and
assume the debt is in statute," Warshaw
said. "You have to explore the intent and
conduct, and actually get the history of
payments if there was more than one
payment. And you have to then determine
if that out-of-stat payment resurrected
the debt. A lot of people are getting
trapped there."
Some state laws directly address
reaffirmation. For instance, in Minnesota,
after the state's six-year statute of
limitations expires, the statute is not revived
by a payment on an account or an oral or
written reaffirmation of the debt. Before
you count on reaffirmation to protect your
collection efforts on out-of-statute debt,
review applicable state laws or consult with
your attorney.

PROTECTING THE CONSUMER,
PROTECTING YOUR AGENCY
The credit and collection industry is
under a lot of scrutiny today. Even if
you know your agency is following the
law and acting responsibly, you must
document everything and carefully
examine the nuances of each account
before you call a consumer.
"You've got to know your consumer:
their current debt obligations, their
income, their earning potential, military
status, credit repayment history, assets
and wealth, financial distress, prior legal
actions-everything," Britt said. "You
can't just blindly dial a phone number
anymore and try to collect a past-due
bill. Doing all of this beforehand will
help your agency successfully resolve
the account."
Anne Rosso May is editor of Collector.

KEYNOTES

1

Scrub your accounts to
identify bankruptcies,
cell phone numbers,
deceased consumers,
litigious consumers, military
members and questionable
addresses.

2

Know your inventory.
Make sure your
collectors know how
permissible purpose is
defined before they pull a
consumer report.

3

Be aware of applicable
statutes of limitations
for your accounts; how they
apply to a debt varies from
state-to-state and from
case-to-case.
21


http://www.ftc.gov

Table of Contents for the Digital Edition of Collector - February 2016

Collector - February 2016 - Cover1
Collector - February 2016 - Cover2
Collector - February 2016 - 1
Collector - February 2016 - 2
Collector - February 2016 - 3
Collector - February 2016 - 4
Collector - February 2016 - 5
Collector - February 2016 - 6
Collector - February 2016 - 7
Collector - February 2016 - 8
Collector - February 2016 - 9
Collector - February 2016 - 10
Collector - February 2016 - 11
Collector - February 2016 - 12
Collector - February 2016 - 13
Collector - February 2016 - 14
Collector - February 2016 - 15
Collector - February 2016 - 16
Collector - February 2016 - 17
Collector - February 2016 - 18
Collector - February 2016 - 19
Collector - February 2016 - 20
Collector - February 2016 - 21
Collector - February 2016 - 22
Collector - February 2016 - 23
Collector - February 2016 - 24
Collector - February 2016 - 25
Collector - February 2016 - 26
Collector - February 2016 - 27
Collector - February 2016 - 28
Collector - February 2016 - 29
Collector - February 2016 - 30
Collector - February 2016 - 31
Collector - February 2016 - 32
Collector - February 2016 - 33
Collector - February 2016 - 34
Collector - February 2016 - 35
Collector - February 2016 - 36
Collector - February 2016 - 37
Collector - February 2016 - 38
Collector - February 2016 - 39
Collector - February 2016 - 40
Collector - February 2016 - 41
Collector - February 2016 - 42
Collector - February 2016 - 43
Collector - February 2016 - 44
Collector - February 2016 - 45
Collector - February 2016 - 46
Collector - February 2016 - 47
Collector - February 2016 - 48
Collector - February 2016 - Cover3
Collector - February 2016 - Cover4
http://online.collector.com/collectormagazine/202003
http://online.collector.com/collectormagazine/202002
http://online.collector.com/collectormagazine/202001
http://online.collector.com/collectormagazine/201912
http://online.collector.com/collectormagazine/201911
http://online.collector.com/collectormagazine/201910/
http://online.collector.com/collectormagazine/201909/
http://online.collector.com/collectormagazine/201908/
http://online.collector.com/collectormagazine/201907/
http://online.collector.com/collectormagazine/201906/
http://online.collector.com/collectormagazine/201905/
http://online.collector.com/collectormagazine/201904/
http://online.collector.com/collectormagazine/201903/
http://online.collector.com/collectormagazine/201902/
http://online.collector.com/collectormagazine/201901/
http://online.collector.com/collectormagazine/201812/
http://online.collector.com/collectormagazine/201811/
http://online.collector.com/collectormagazine/201810/
http://online.collector.com/collectormagazine/201809/
http://online.collector.com/collectormagazine/201808/
http://online.collector.com/collectormagazine/201807/
http://online.collector.com/collectormagazine/201806/
http://online.collector.com/collectormagazine/201805/
http://online.collector.com/collectormagazine/201804/
http://online.collector.com/collectormagazine/201803/
http://online.collector.com/collectormagazine/201802/
http://online.collector.com/collectormagazine/201801/
http://online.collector.com/collectormagazine/201712/
http://online.collector.com/collectormagazine/201711/
http://online.collector.com/collectormagazine/201710/
http://online.collector.com/collectormagazine/201709/
http://online.collector.com/collectormagazine/201708/
http://online.collector.com/collectormagazine/201707/
http://online.collector.com/collectormagazine/201706/
http://online.collector.com/collectormagazine/201705/
http://online.collector.com/collectormagazine/201704/
http://online.collector.com/collectormagazine/201703/
http://online.collector.com/collectormagazine/201702/
http://online.collector.com/collectormagazine/201701/
http://online.collector.com/collectormagazine/201612/
http://online.collector.com/collectormagazine/201611/
http://online.collector.com/collectormagazine/201610/
http://online.collector.com/collectormagazine/201609/
http://online.collector.com/collectormagazine/201608/
http://online.collector.com/collectormagazine/201607/
http://online.collector.com/collectormagazine/201606/
http://online.collector.com/collectormagazine/201605/
http://online.collector.com/collectormagazine/201604/
http://online.collector.com/collectormagazine/201603/
http://online.collector.com/collectormagazine/201602/
http://online.collector.com/collectormagazine/201601/
http://online.collector.com/collectormagazine/201512/
http://online.collector.com/collectormagazine/201511/
http://online.collector.com/collectormagazine/201510/
http://online.collector.com/collectormagazine/201509/
http://online.collector.com/collectormagazine/201508/
http://online.collector.com/collectormagazine/201507/
http://www.nxtbookMEDIA.com