Should debt collectors have to disclose SOL?

[My~Cuz~n~Vinny~]

The National Association of Retail Collection Attorneys (NARCA) prefers that states take the lead when it comes to debt collection litigation as long as any new rules result from collaborative discussions between local consumer and creditor stakeholders, said Adam Olshan, chair of NARCA’s state government affairs committee.

“Decisions regarding state collection lawsuits that are made in Washington are typically not knowledge-based. They are painted with a broad brush,” said Olshan, a partner in Hartford, CT-based Howard Lee Schiff PC. “To be fair to all parties, the decisions need be inclusive and transparent. That’s best done locally.”

Olshan said many of the proposals being considered are knee-jerk reactions to consumer complaints against legitimate claims. He cited a Massachusetts proposal last year that would have allowed one cease-and-desist letter from a consumer to terminate all future communication with the debtor about the account from any debt collector. Ken Wilson, a partner with Lustig, Glaser & Wilson, and president of the Massachusetts Creditors Bar Association, told insideARM.com that the bill has since been changed to limit an oral request to suspend communications for 10 days unless the request is made in writing. An agency that receives a written request from a consumer must abide by the request until it’s revoked in writing.

December 2010

New Mexico Attorney General Gary King announced late Wednesday that debt collectors operating in the state will now be required to disclose to consumers that their debt is not enforceable by lawsuit if it is beyond the debt statute of limitations, in addition to other compulsory language.

https://www.insidearm.com/daily/collection-laws-regulations/collection-laws-and-regulations/state-lawmakers-expected-to-target-debt-collection-industry/

[nascar]

December 2010

New Mexico Attorney General Gary King announced late Wednesday that debt collectors operating in the state will now be required to disclose to consumers that their debt is not enforceable by lawsuit if it is beyond the debt statute of limitations, in addition to other compulsory language.

https://www.insidearm.com/daily/collection-laws-regulations/collection-laws-and-regulations/state-lawmakers-expected-to-target-debt-collection-industry/

North Carolina has required this for a long time.

[BrunoTheJDBkiller]

This begs the question, whose statute of limitations applies in legislation like this? Quite a few states now lean toward the restatement of torts, in which they allow the defendant to invoke the SOL of the credit card issuer per the choice of law clause. Others do not, they just decree that it is procedural and the forum state applies whether anybody likes it or not. If the legislation would clearly state the SOL which applies in that state and why, that would go a long way towards resolving forum shopping. As it stands, it is almost impossible to figure out. 99% of choice of law cases are car accidents, divorces, and insurance claims. Credit card cases are rare.

[BV80]

It would probably depend upon state law as to whether or not a CA is required to disclose if the account is outside the SOL.

However, Asset Acceptance is required to reveal that information no matter the state in which they're collecting. That requirement was included in the order of the court when they were sued by the FTC.

[BrunoTheJDBkiller]

Yes, but how do they make the disclosure when there is no set law in each state that defines the way they apply the SOL? Asset could put in a generic disclaimer, but what value would it have? It would have to be so general that it would not apply to any specific case, which would just cause more confusion.

[BV80]

This begs the question, whose statute of limitations applies in legislation like this? Quite a few states now lean toward the restatement of torts, in which they allow the defendant to invoke the SOL of the credit card issuer per the choice of law clause. Others do not, they just decree that it is procedural and the forum state applies whether anybody likes it or not. If the legislation would clearly state the SOL which applies in that state and why, that would go a long way towards resolving forum shopping. As it stands, it is almost impossible to figure out. 99% of choice of law cases are car accidents, divorces, and insurance claims. Credit card cases are rare.

It doesn't matter if a case is related to insurance or a credit card. What matters is what the court said about the SOL. If the court specifically states that the SOL is a procedural matter, they usually apply the SOL of the forum state.

Here's a case from the IL Supreme Court:

Belleville Toyota v. Toyota Motor Sales, 770 NE 2d 177 - Ill: Supreme Court 2002.

"Statutes of limitations are procedural, merely fixing the time in which the remedy for a wrong may be sought, and do not alter substantive rights. Fredman Brothers 109 Ill.2d at 209, 93 Ill.Dec. 360, 486 N.E.2d 893; see also Cox, 212 Ill.App.3d at 1062, 156 Ill.Dec. 1031, 571 N.E.2d 1011. Accordingly, Illinois law governs the timeliness of plaintiff's claim under the 1980 dealer agreement."

[BrunoTheJDBkiller]

I know, I've seen that case before, (lease?) but it still comes back to the basic argument. When two parties make a contract, one party insists on a choice of law, (theirs) and the other party agrees, why should a court set aside that agreement? The cases I mentioned, insurance etc, do have a valid conflict. In most of these cases, if the law of one state is applied rather than the other, there will be a different and perhaps prejudicial outcome to the case. I don't see this conflict in CC cases. The forum state has absolutely no interest in the outcome. These credit card companies locate in states that allow them to have a storefront operation strictly for the purpose of fleecing people at 29.99% interest. That is the only reason they move there, then they absolutely impose the laws of their state on the cardholder. The laws of their state assumedly includes all of them, including the SOL. I know the procedural argument, but this is more contractual.

On another subject, listen to this and you may want to move to another planet.

https://www.youtube.com/watch?v=M8M_UZF7pyQ&feature=related

[nascar]

When two parties make a contract, one party insists on a choice of law, (theirs) and the other party agrees, why should a court set aside that agreement?

If two parties make a contract, and one party agrees to surrender its first-born in lieu of repayment, and the other party agrees, why should a court set aside that agreement?

My point is, contractual rights are not absolute. If certain provisions are contrary to law, they are not enforceable. With respect to choice of law, a a contract includes a choice of law provision, and the chosen state has no signficant ties to the contracting parties, that choice of law provision is probably unenforceable.

[My~Cuz~n~Vinny~]

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[My~Cuz~n~Vinny~]

nascar

the chosen state has no significant ties to the contracting parties...?

I'm not sure I understand.

[nascar]

the chosen state has no significant ties to the contracting parties...?

I'm not sure I understand.

See, Burger King Corp. v. Rudzewicz, 471 US 462 (1985)

[Coltfan1972]

Have no idea on choice of law, but I do know I helped a friend get out of a personal training contract they never should have entered. The contract said UTAH law would apply.

I basically used the argument that we don't care what that contract says because we're not in Utah, the contract was not signed in Utah, the performance of the contract was not taking place in Utah, and other than an office for the personal training company alleging being in Utah, none of this has to do with Utah and requiring disputes to be litigated in Utah and/or using Utah law was in violation of the due process clause of the U.S. Constitution so was unenforceable as a matter of law.

Have no idea if those arguments worked on them. They totally dropped the case and persuing my friend after getting the letter and dispute.

[Guest usctrojanalum]

You can't have a creditor state whether or not an account is within the SOL because that is for a judge to decide if there is a dispute or the SOL date is ambiguous. I do agree they should all state that they cannot legally enforce the collection of a debt if the statute of limitations has expired though.

[usagi555]

Gary king is a decent guy. He has screwed some things up, but it hasn't been because of malice. he's been put into some tough situations and hasn't performed as well as he should have. ButI l like how he deals with debt collectors.

[BV80]

I know, I've seen that case before, (lease?) but it still comes back to the basic argument. When two parties make a contract, one party insists on a choice of law, (theirs) and the other party agrees, why should a court set aside that agreement? The cases I mentioned, insurance etc, do have a valid conflict. In most of these cases, if the law of one state is applied rather than the other, there will be a different and perhaps prejudicial outcome to the case. I don't see this conflict in CC cases. The forum state has absolutely no interest in the outcome. These credit card companies locate in states that allow them to have a storefront operation strictly for the purpose of fleecing people at 29.99% interest. That is the only reason they move there, then they absolutely impose the laws of their state on the cardholder. The laws of their state assumedly includes all of them, including the SOL. I know the procedural argument, but this is more contractual.

On another subject, listen to this and you may want to move to another planet.

https://www.youtube.com/watch?v=M8M_UZF7pyQ&feature=related

From what I understand, substantive law has to do with your rights. That's what a contract is for. It lays out the rights and obligations of the parties.

If a court has determined that the SOL is procedural, that means procedure...court procedure and rules. Your rights in the contract wouldn't change. However, the time you would have to enforce your rights in a court of law would be considered a procedural matter.

[antiquedave]

Just seems to me that filing a lawsuit on a SOL debt is a misrepresentation of the status of the debt on the face of it

SOL is your affirmative defense but it should be your counter or cross claim in the same response

[usagi555]

Just seems to me that filing a lawsuit on a SOL debt is a misrepresentation of the status of the debt on the face of it

SOL is your affirmative defense but it should be your counter or cross claim in the same response

Threatening to take, or taking action that they are not allowed to take. Sure, it's the consumer's responsibility to raise it as an affirmative defense, and it is the consumer's responsibility to prove that defense, but they are still not supposed to bring suit. That being said, I'd hit'em with the misrepresenting the legal status of the debt as well

[BrunoTheJDBkiller]

With respect to choice of law, a a contract includes a choice of law provision, and the chosen state has no signficant ties to the contracting parties, that choice of law provision is probably unenforceable.

Part of it is unavoidable. 12 USC 85 mandates that any national bank use the interest rate law of their home state. Sometimes this can work against them.

I guess our main argument and point of confusion concerning this subject is why part of a choice of law should apply but the part they don't like doesn't. None of these states where credit card companies are located have any interest in the millions of cardholders in the other 49 states other than the fact that the credit card company located there and pumped up their economy somewhat. Sioux Falls was about ready to take the gas pipe until Citi moved there.

I do agree they should all state that they cannot legally enforce the collection of a debt if the statute of limitations has expired though.

Asset should be doing this after being ordered to by the FTC and paying a 2.5 million dollar fine.