Collector - July 2018 - 28

consumers of potential tax consequences
when settling their debt. The intent was to
inform consumers that settlements over $600
would require a Form 1099c to be filed and
the IRS would consider the amount settled
as income. This language became fodder for
litigation as consumer complaints claimed
the least sophisticated consumer could
believe the IRS was involved.
Our agency does not routinely send
Form 1099c unless the consumer requests
it; typically an attorney representing the
consumer requests it. Of course, this
practice may not be recommended for your
agency. Please be sure to consult with an
attorney before making the decision that
best suits your business.
Courts currently do not agree as to
whether a collection agency is required to

include language notifying a consumer of
negative tax consequences.
On one hand, courts such as the Second
Circuit and others have ruled that debt
collectors have no obligation to warn the
consumer of possible tax consequences. On the
other hand, courts such as the Northern District
of Illinois have indicated that including language
regarding the IRS could be construed by the
least sophisticated consumer as intimidation.
Ultimately, whether or not to include language
relating to Form 1099c in a collection letter
remains a business decision that requires
careful research into current case law.

OUT-OF-STATUTE DEBT
DISCLOSURES
Statutes of limitations, which define the time
allowed to seek legal remedy for debt, are set

at the state level and vary greatly. Such statutes
typically extinguish a debt collector's ability to
pursue legal action to collect. They generally
do not remove the debt collector's ability to
continue collection attempts, though, a fact
which is often misunderstood by consumers.
Courts have ruled the FDCPA does not
prohibit the collection of out-of-statue debts,
but they have not reached a similar agreement
as to whether a debt collector must disclose
the applicable statute of limitations when
attempting to collect those debts.
A settlement decree between an asset buyer
and the Federal Trade Commission provides
some clarity on this issue. The decree required
the asset buyer to provide disclaimers when
collecting out-of-statute debts.
The decree provides two distinct
messages, one for debts that will be

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no other agent can
offer. Guaranteed.

28

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Table of Contents for the Digital Edition of Collector - July 2018

Upfront
Industry News
Best Practices
FYI
Collection Tips
Navigating Uncharted Territory
Making Sense Out of Collection Notice Requirements
Do You Need to Contact Creditors to Verify a Debt?
Calendar
Honor Roll
Getting on the Right Path
A Better Framework
ACA Members Contribute to Successful Collectors Challenge Month
The ACA Int’l v. FCC Decision: What Does It Mean For Your Business?
Connecting with Legislators at ACA’s Washington Insights Conference
Second Circuit Rules for Accounts Receivable Management Industry in Case Supported by ACA’s Industry Advancement Program
Compliance
ACA SearchPoint
Ad Index
Last Word
Collector - July 2018 - Cover1
Collector - July 2018 - Cover2
Collector - July 2018 - 1
Collector - July 2018 - 2
Collector - July 2018 - 3
Collector - July 2018 - Upfront
Collector - July 2018 - 5
Collector - July 2018 - Industry News
Collector - July 2018 - 7
Collector - July 2018 - 8
Collector - July 2018 - 9
Collector - July 2018 - Best Practices
Collector - July 2018 - 11
Collector - July 2018 - FYI
Collector - July 2018 - 13
Collector - July 2018 - Collection Tips
Collector - July 2018 - 15
Collector - July 2018 - Navigating Uncharted Territory
Collector - July 2018 - 17
Collector - July 2018 - 18
Collector - July 2018 - 19
Collector - July 2018 - 20
Collector - July 2018 - 21
Collector - July 2018 - 22
Collector - July 2018 - 23
Collector - July 2018 - Making Sense Out of Collection Notice Requirements
Collector - July 2018 - 25
Collector - July 2018 - 26
Collector - July 2018 - 27
Collector - July 2018 - 28
Collector - July 2018 - 29
Collector - July 2018 - Do You Need to Contact Creditors to Verify a Debt?
Collector - July 2018 - 31
Collector - July 2018 - 32
Collector - July 2018 - 33
Collector - July 2018 - 34
Collector - July 2018 - 35
Collector - July 2018 - Calendar
Collector - July 2018 - Honor Roll
Collector - July 2018 - Getting on the Right Path
Collector - July 2018 - 39
Collector - July 2018 - A Better Framework
Collector - July 2018 - 41
Collector - July 2018 - ACA Members Contribute to Successful Collectors Challenge Month
Collector - July 2018 - 43
Collector - July 2018 - 44
Collector - July 2018 - 45
Collector - July 2018 - The ACA Int’l v. FCC Decision: What Does It Mean For Your Business?
Collector - July 2018 - 47
Collector - July 2018 - Connecting with Legislators at ACA’s Washington Insights Conference
Collector - July 2018 - 49
Collector - July 2018 - Second Circuit Rules for Accounts Receivable Management Industry in Case Supported by ACA’s Industry Advancement Program
Collector - July 2018 - 51
Collector - July 2018 - Compliance
Collector - July 2018 - 53
Collector - July 2018 - ACA SearchPoint
Collector - July 2018 - Ad Index
Collector - July 2018 - Last Word
Collector - July 2018 - Cover3
Collector - July 2018 - Cover4
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