After a period of time, debts can become time-barred. That is, the creditor can no longer sue to collect on them once the statute of limitations expires. However, the complaint for this class action says that Dynamic Recovery Solutions violated the Fair Debt Collection Practices Act (FDCPA) by not informing debtors that any payment on such a “stale” debt can restart the statute of limitations, putting the debtor in a worse position.
The class for this action is all consumers with a Texas address who have received from Dynamic Recovery Solutions collection letters similar to the one that is Exhibit A in this case about debts for Capital One Bank that were incurred primarily for personal, family, or household purposes, between June 13, 2017 and June 13, 2018.
Plaintiff Hector Ojeda incurred a debt with Capital One for personal, family, or household purposes. At an unknown date, Dynamic Recovery Solutions began trying to collect that debt from him.
The company sent Ojeda a letter on or around June 22, 2017 stating that the current balance of the debt was $951.34. The letter is attached to the complaint as Exhibit A. It offered him two payment options. One was to make a lump-sum payment of $285.40 by August 6, 2017. The other was to pay $332.97 in three monthly payments.
The last line of the letter, in smaller print, says, “The law limits how long you can be sued on a debt. Because of the age of your debt, LVNV Funding LLC will not sue you for it and LVNV Funding LLC will not report it to any credit reporting bureau.”
According to the complaint, this line renders the letter confusing, deceptive, and unfair because it misrepresents the nature, character, and/or legal status of the debt. That is, it does not mention that if he made even a partial payment, he would revive the statute of limitations and therefore be worse off than if he had paid nothing.
The complaint claims that the Federal Trade Commission, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of the Comptroller of the Currency all hold the position that debt collectors cannot stay silent on this point. The complaint quotes an earlier case as saying that when “collecting on a time barred debt a debt collector must inform the consumer that … providing a partial payment would revive the collector’s ability to sue to collect the balance.”
The complaint therefore claims that in sending this debt collection letter, Dynamic Recovery Solutions has violated the FDCPA.