Supreme Court Again Weighs In On FDCPA Question
Once again, the U.S. Supreme Court has weighed in on an important issue involving the Fair Debt Collection Practices Act (FDCPA). And once again, the result is a confusing, mixed bag, leaving the state of the law up in the air for consumers being harassed by debt collectors.
The FDCPA Statute of Limitations
The question before the Court was seemingly simple: When does the statute of limitations (the time limit to file a lawsuit) begin under the FDCPA? The law says one year, but does that mean one year from when the violation actually occurs, or one year from when the consumer actually discovers the violation?
This is important because often consumers are not even aware they have been deceived until some time has passed. For example, imagine a debt collector files a lawsuit against a consumer to collect a debt without serving the consumer with the lawsuit. Years could potentially go by before the consumer even realizes what has happened. By then, it would be too late to file an FDCPA lawsuit.
Imagine that a debt collector says that they have a legal right to sue, and intend to do so. The consumer may not even realize that this is a false statement, until after the statute of limitations has expired.
Supreme Court Rules
The Supreme Court recently ruled against consumers, finding that the “clock starts ticking” on the one year time limit when the FDCPA violation occurs—not when the consumer actually discovers there has been a violation.
However, the Court also said that the one year time limit could be extended in situations where the cause of the consumer’s delay in discovering a violation is due to a debt collector’s fraud. This is called equitable tolling, and it generally covers situations where a consumer has been injured by fraud, the consumer does not know about the fraud, and it is not the consumer’s fault that he or she does not know.
This would seemingly cover situations where a consumer is not served with notice of a lawsuit. It would also cover situations where a debt collector says that it will do something but fails to do it (for example, promising to erase a mark from a credit report, promising not to sue but then suing or falsely telling a consumer that he or she does not have to appear at a court proceeding when the consumer is in fact required to attend).
Equitable tolling would also include situations where a collector purposely conceals information, or lies to the consumer in order to conceal the fact that it has committed a violation of the FDCPA.
All of this means that to extend the statute of limitations beyond a year, a consumer will have to show that a debt collector did or failed to do something it was supposed to, and the consumer had no way of knowing what was happening.
Contact Jacobs Legal to speak with one of our Miami consumer rights attorneys today if you are being harassed or abused by debt collectors and collection agencies.