Common Tactics Used by Debt Collectors

Demanding payment from the wrong consumer violates the Law.

Shockingly, debt collectors often collect debts from the wrong individual. A recent case in Philadelphia written by Senior Judge Robert F. Kelly demonstrates that a debt collector is liable for sending a single debt collection letter to the wrong individual.  See Velazquez v. NCO Fin. Sys. Inc, (E.D. Pa. May 31, 2011).

NCO is a national debt collection agency located in Horsham Pennsylvania and they attempted to recover a debt from Yasmin Velazquez.  The NCO letter informed Velazquez that NCO was attempting to collect a debt on behalf of AT&T in the amount of $470.46.  As it turns out, Velazquez claimed that she never had an account with AT&T.

Judge Kelly held that attempting to collect a debt from the wrong individual by sending one letter can give rise to a claim under the FDCPA as a matter of law.

Suing a consumer on a debt that is beyond the 4 year statute of limitations violates the Law.

Statutes of limitations is a legal phrase that you will hear in almost every legal drama on TV. It is a law that is designed to prevent fraudulent and stale claims from arising after all evidence has been lost or after the facts have become obscure through the passage of time or the defective memory, death, or disappearance of witnesses.

In Pennsylvania, we have a 4 year Statute of Limitations  on consumer debts, which means that a lawsuit must be filed within 4 years or it becomes stale.

A recent case in Philadelphia written by Judge Lawrence Stengel illustrates that a debt collector is liable to a consumer if they file a time-barred lawsuit to collect a stale debt – beyond the 4 year Statute of Limitations. See Jackson v. Midland Funding, LLC (3d Cir. 2012)

Midland Funding LLC is one of the nation’s largest buyers of unpaid debt and they sued Charlene Jackson six years after a debt defaulted, which was two years beyond Pennsylvania’s four-year statute of limitations.  The District Court went out of their way and stated that “debt collectors violate the FDCPA if they knowingly file a time-barred lawsuit in state court.”

Judge Stengel held that Midland’s state court action was time-barred – meaning that it was filed beyond Pennsylvania’s four-year statute of limitations.