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Contract Callers Misleading on Time-Barred Debt FDCPA Class Action

Figure Carrying Letters D-E-B-T on Its Back

Not all consumers understand that they cannot be sued for a consumer debt once the statute of limitations on it expires. But perhaps even fewer know that if they make a single payment after that, the statute of limitations may be restarted, and that they can again be sued for the debt. The complaint for this class action claims that Contract Callers, Inc. violated the Fair Debt Collection Practices Act (FDCPA) by not making this clear to consumers.

The class for this action is

  • All individuals with addresses in Pennsylvania 
  • to whom Contract Callers sent a collection letter, attempting to collect a consumer debt, 
  • Between November 5, 2017 and November 26, 2018,
  • Which made a settlement offer, and
  • Which stated that it would not sue the consumer,
  • Did not clearly disclose that the consumer could not be sued by any party, and
  • Did not disclose that the lapsed statute of limitations on a lawsuit would be restarted if the individual made a payment.

The FDCPA forbids debt collectors to mislead consumer about their debts. It also says that “the collector … violates the Act if it conveys information in a confusing or contradictory fashion so as to cloud the required message with uncertainty.” It also says that “language that ‘overshadows or contradicts’ other language information a consumer of her rights … violates the Act.”

This action concerns a debt plaintiff Patricia Bailey allegedly incurred to TMobile for personal, family, or household purposes. TMobile later assigned or transferred the debt to Contract Callers for collection.

Contract Callers sent Bailey a collection letter dated November 6, 2017. A copy of this letter is attached to the original complaint as Exhibit A. 

At issue is the information surrounding a settlement offer made in the letter. It seems that at the time the letter was written, the debt was already “stale” or time-barred, meaning that no one could any longer sue Bailey for payment. However, the letter only contained this information: “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, we (Contract Callers, Inc.) may report or continue to report it to the credit reporting agencies as unpaid.”

The complaint objects to this for a number of reasons. First, it implies that Contract Callers has chosen not to sue, when the fact is that neither it nor any other party cannot legally do so. Second, it claims that Contract Callers is not the owner of the debt and therefore has no standing to do so to begin with. 

Third, the letter contains various settlement offers, but it does not inform Bailey that the statute of limitations will be revived if she makes so much as a single payment. The complaint claims that this makes the letter false, deceptive, and misleading. Needless to say, this is pretty important information for a debtor to know. 

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