Collector - June 2017 - 12

COLLECTIONTIPS

Time Limits
What you need to know about collecting out-of-statute debt.

S

tatutes of limitations are laws that
dictate when a debt collection
agency can file a lawsuit to help
collect a debt. Even if a debt ages out of
its statute of limitations, the consumer's
obligation to pay the debt generally still
exists in most states.
However, the collection process gets a
little more complicated when a debt is out
of statute. For one, statutes of limitations are
set by individual states, and your obligations
will vary depending on the state where the
debt originated as well as the type of debt
and the language in the original contract
from the creditor.
Still, most states do allow you to continue
to collect on an out-of-statute debt-with
restrictions. Before you talk to a consumer
about an out-of-statute debt, make sure
you understand the laws that apply to that
particular debt.
Some states require you to tell consumers
that their debt is out of statute or that they
cannot be sued on the debt. You should also
know and follow your agency's policies for
providing this information to consumers.
Make sure you don't contradict or undermine
your agency's out-of-statute debt disclosure
at any point in the collection call. Lying to
consumers during a collection call is a violation
of the Fair Debt Collection Practices Act.
Because the debt is older, it may be
tempting to convey a sense of urgency to the
consumer about paying it. But statements like,
"I need your payment now; please send it by
express or overnight mail" can be misleading
to consumers, making them think their only
option is to pay immediately. This is also true
for statements that imply an out-of-statute
debt in existence for more than seven years
will affect the consumer's credit report.
Be careful making settlement offers
on debts that are beyond the statute
of limitations. Some courts have ruled
settlement offers could mislead consumers

12

into believing the debt is judicially enforceable
when it's not. Follow your agency's stated
disclosure for any settlement offers made in
connection with an out-of-statute debt.
Additionally, threatening legal action-or
even implying it-is absolutely not allowed on
out-of-statute debt. Avoid saying things like:
* "If you can't arrange a payment with
me today, further collection activities
will be decided."
* "I want to establish your intentions
toward this bill. If I can't, I'll have to
assume you are refusing to resolve it
and I'll consider further action."

* "If you can't take care of this today, you
may not be able to keep your car."
You should be cautious with language
about legal action even with accounts
that are still in statute because you can't
threaten a consumer with a lawsuit unless
you know your company actually plans to
file one. And for both in-statute and outof-statute accounts, if consumers send you
a written request to stop communicating
with them, you must accede.
Anne Rosso May is editor of Collector
magazine.

ACAINTERNATIONAL.ORG


http://www.ACAINTERNATIONAL.ORG

Table of Contents for the Digital Edition of Collector - June 2017

President's Page
Industry News
Best Practices
FYI
Collection Tips
In Case of Emergency
Pulling Back the Curtain
ACA International's 2017 Convention and Exposition Preview
Calendar
Honor Roll
Seeing Eye to Eye
The Business Battle
Blueprint for Success
Federal Court Nixes CFPB Enforcement Action That Claimed a Payment Processor Ignored Fraud
Compliance
ACA SearchPoint
Last Word
Collector - June 2017 - Cover1
Collector - June 2017 - Cover2
Collector - June 2017 - 1
Collector - June 2017 - 2
Collector - June 2017 - President's Page
Collector - June 2017 - Industry News
Collector - June 2017 - 5
Collector - June 2017 - 6
Collector - June 2017 - 7
Collector - June 2017 - Best Practices
Collector - June 2017 - 9
Collector - June 2017 - FYI
Collector - June 2017 - 11
Collector - June 2017 - Collection Tips
Collector - June 2017 - 13
Collector - June 2017 - In Case of Emergency
Collector - June 2017 - 15
Collector - June 2017 - 16
Collector - June 2017 - 17
Collector - June 2017 - 18
Collector - June 2017 - 19
Collector - June 2017 - Pulling Back the Curtain
Collector - June 2017 - 21
Collector - June 2017 - 22
Collector - June 2017 - 23
Collector - June 2017 - 24
Collector - June 2017 - 25
Collector - June 2017 - ACA International's 2017 Convention and Exposition Preview
Collector - June 2017 - 27
Collector - June 2017 - 28
Collector - June 2017 - 29
Collector - June 2017 - 30
Collector - June 2017 - 31
Collector - June 2017 - Calendar
Collector - June 2017 - Honor Roll
Collector - June 2017 - Seeing Eye to Eye
Collector - June 2017 - 35
Collector - June 2017 - The Business Battle
Collector - June 2017 - 37
Collector - June 2017 - 38
Collector - June 2017 - 39
Collector - June 2017 - Blueprint for Success
Collector - June 2017 - 41
Collector - June 2017 - Federal Court Nixes CFPB Enforcement Action That Claimed a Payment Processor Ignored Fraud
Collector - June 2017 - 43
Collector - June 2017 - Compliance
Collector - June 2017 - 45
Collector - June 2017 - ACA SearchPoint
Collector - June 2017 - 47
Collector - June 2017 - Last Word
Collector - June 2017 - Cover3
Collector - June 2017 - Cover4
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