The United States District Court for the District of Kansas recently granted a debtor summary judgment on its claims that a letter that sought to collect a time-barred debt violated the Fair Debt Collection Practices Act (“FDCPA”), holding that the letter should have stated that any payment would revive the statute of limitations. See Smothers v. Midland Credit Mgmt., Inc., 2016 WL 7485686 (D. Kan. Dec. 29, 2016). In the case, the debt collector sent the debtor a letter requesting a payment on a debt and stating, “[t]he 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.” However, the letter did not state that any payment on the debt would revive the statute of limitations under Kansas law. The debtor initiated the lawsuit, and the parties cross-moved for summary judgment. The Court granted the debtor’s motion and denied the debt collector’s. It held that the letter’s statement of the benefits of making a payment on the debt was misleading because it omitted the possible risks, which include the possibility that the debt collector would sell the debt to another collector who could sue once the limitations period had been revived. Therefore, the Court held that the letter was misleading under the FDCPA. See 15 USC § 1692e.
The next day, however, the United States District Court for the District of Kansas granted the same debt collector summary judgment in a separate action regarding an identical letter. See Boedicker v. Midland Credit Mgmt., Inc., 2016 WL 7492465 (D. Kan. Dec. 30, 2016). There, the Court analyzed the same decisions that the Smothers Court analyzed, but reached the opposite conclusion, holding “[n]o case has determined that a debt collector must warn of a potential revival of a time-barred claim[.]” The Boedicker decision is consistent with a recent holding in the United States District Court for the District of New Jersey. See Tatis v. Allied Interstate, LLC, 2016 WL 5660431 (D.N.J. Sept. 29, 2016). However, the Tatis decision specifically stated that the letter did not violate the FDCPA because a partial payment of a debt would not revive the statute of limitations under New Jersey law.
For an analysis on the Tatis decision, please click here.