Fair Debt Collection Practices Act (FDCPA)
and Out Of Statute (OOS)

In a settlement reached with one of the nation’s largest debt collection agencies in January 2012, the Federal Trade Commission (FTC) signaled to industry that agencies need to ensure they are in compliance with all Federal and state laws that deal with the collection of time-barred debt. 

Debt collectors have a limited number of years — known as the statute of limitations — to sue a consumer to collect on a debt. After the statute of limitations expires, unpaid debts are considered "time-barred."  According to the Fair Debt Collections Practices Act (FDCPA), a debt collector cannot sue a consumer for not paying a debt that is considered to be time-barred. 

Collections agencies need to pay close attention to state laws because the statute of limitations varies from state to state and for different types of debts.  Agencies also need to ensure that they are keeping track of consumer contacts and payments received for debts as the “clock” can be reset if a consumer makes a payment or states in writing that he or she intends to pay the debt.

Collections agencies and debt buyers