Fair Debt Collection Improvement Act
The Fair Debt Collection Improvement Act would add a new rule to the Fair Debt Collection Practices Act (FDCPA): debt collectors may not collect, or attempt to collect, a debt if the governing statute of limitations for that debt has expired. In short, time-barred debts could not be pursued through collection efforts (including lawsuits) under this bill. The change is implemented by creating a new section, 811A, and placing it within the FDCPA, without otherwise altering the existing framework governing debt collection practices. The bill relies on the existing FDCPA enforcement structure (private rights of action and government enforcement) to address violations. Potential impact includes stronger protections for consumers against pursuing time-barred debts, potential reductions in debt-collection activity on expired debts, and added compliance responsibilities for debt collectors to verify the SOL before attempting to collect. The bill does not spell out tolling rules or exceptions, and it does not create new penalties beyond those already available under the FDCPA.
Key Points
- 1Prohibits collecting or attempting to collect a debt if the governing statute of limitations has expired (time-barred debt).
- 2Adds a new Sec. 811A to the FDCPA to codify this prohibition.
- 3Requires debt collectors to refrain from any collection activity on time-barred debts, including lawsuits and other efforts.
- 4The prohibition applies to debts governed by the relevant statute of limitations, recognizing that these time periods vary by debt type and jurisdiction.
- 5Enforcement remains under the existing FDCPA framework, including private rights of action for consumers (and related penalties/remedies) and general agency enforcement.