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Operations Guide
Out of Stat Debt
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To the Point: Out of Stat Debt Page | 1 © insideARM LLC
Published by insideARM an iA Initiative 6010 Executive Blvd, Suite 802, Rockville, Maryland, 20850 [email protected] | 240.499.3834 | www.CompliancePF.com Copyright © insideARM LLC All rights reserved Printed in the United States of America All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. CPF Membership: Membership in CPF allows each individual member to download a copy of this document for his or her own personal use. This membership is non-transferable without explicit permission from the copyright holder. insideARM: Purchase of this report from insideARM is for an individual use only. Discounts are available for bulk purchases to use for educational and training purposes. Please contact [email protected] for details. Ordering Information: Quantity sales. Special discounts are available on quantity purchases by corporations, associations, and others. Please contact insideARM for details: Tel: 240.499.3834; [email protected]. Reprint licenses are available for an additional fee.
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To the Point: Out of Stat Debt Page | 2 © insideARM LLC
Legal Disclaimer This information is not intended to be legal advice but simply informed opinions from our panel, and may not be used as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to assure this information is up-to-date. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel. The views and opinions expressed herein are solely those of the Compliance Professionals Forum. The information and any materials are provided “as is” and the CPF along with its parent organization expressly disclaim all warranties, conditions, representations, indemnities and guarantees whether express or implied, arising by law or custom. In no event will the CPF be held liable for any claim or action arising from or related to your failure to comply with any laws or regulations. Your use of these materials constitutes full and sufficient consideration for, and acceptance by you, of the above terms.
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To the Point: Out of Stat Debt Page | 3 © insideARM LLC
Table of Contents About the Presenters ..................................................................................................................... 4
How to Use This To the Point Guide .............................................................................................. 5
Statute of Limitations: An Overview ............................................................................................. 6
New York State Law: A Look at Specific Requirements ............................................................ 7
Statute of Limitations: From a Regulatory Perspective ................................................................ 8
Risks and Mitigations ................................................................................................................... 10
Encore Capital Group Consent Order ...................................................................................... 10
Portfolio Recovery Consent Order .......................................................................................... 10
Statute of Limitation Chart (up to date as of Nov 2015) ............................................................ 12
Where Collection on Out-of-Stat Debt is Barred .................................................................... 13
The Effect of Partial Payments..................................................................................................... 14
Where Partial Payment Does NOT Revive the Debt .............................................................. 14
Written Notification: Where and How? ...................................................................................... 15
What Does the FTC Say About Out-of-Stat Language? ............................................................... 16
Q&A............................................................................................................................................... 17
Is there any litigation/current issues on pulling credit reports on out of stat debt? ........... 17
How do you determine statute of limitations if a borrower never does a payment but has had a defer of payment at one point? .................................................................................... 17
Any consensus on which states statute of limitations to apply to credit cards? Our states have borrowing statutes but don’t seem to be insistent on if it is residence of debtor at time that account opened, location of bank, or where the payment is to be sent. So, if those are your options, what’s your safest pick? .................................................................. 17
I wonder how the regulators would respond if we gave a general notice about the statute of limitations in all cases? For example, we make no representation about whether your debt is outside the statute of limitations. But if it is, then you may not be sued for it, but the creditor may continue to report it to credit reporting agencies if allowed by applicable credit-reporting law................................................................................................................. 17
What is the biggest pitfall that agencies should watch out for, if they are currently working or looking to get into out of stat debt? What advice would you give them, to make sure that they are staying on the right side of regulations as much as possible, knowing that there is almost nothing but gray lines throughout? .............................................................. 17
Appendix A: insideOperations Out of Stat Transcript ................................................................ 19
Appendix B: insideOperations Out of Stat PowerPoint .............................................................. 39
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To the Point: Out of Stat Debt Page | 4 © insideARM LLC
About the Presenters
David Kleber, Bedard Law Group. David Kleber joined Bedard Law Group in 2015 after 20 years as a collections attorney, including 5 years as managing attorney of a national recognized firm. David is a frequent speaker and published author on such topics as bankruptcy and garnishment law. David is one of three Board Certified creditors’ rights specialists in the State of Georgia, and he has served as President of the Georgia Collectors Association.
Kelly Knepper-Stephens, Stoneleigh Recovery Association, LLC. Kelly Knepper-Stephens is General Counsel and Chief Compliance Officer for Stoneleigh Recovery Associates, LLC, a debt recovery solutions company. Her work focuses on government regulation, compliance, and civil litigation; she advises her employer and its clients on the FDCPA, FCRA, TCPA, GLBA, HIPAA, and other federal and state regulations. She is a Debt Buyer Association International Certified Receivables Compliance Professional and has earned the Credit & Collection Compliance Officer
designation from the American Collectors Association.
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To the Point: Out of Stat Debt Page | 5 © insideARM LLC
How to Use This To the Point Guide Our To the Point guides synthesize best-practice information from our webinar series, insideCompliance. As a companion to this report, you can watch the full video of the webinar here: insideOperations: Out of Stat Debt As appendices, you will find the slide deck from the webinar, as well as the transcript. Additionally, we have included Certificates of Completion if your training department is interested in using the webinar and this study-guide as a training tool for new hires, continuing education, or periodic in-services.
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To the Point: Out of Stat Debt Page | 6 © insideARM LLC
Statute of Limitations: An Overview Debts have a shelf-life. From the moment a consumer defaults on payment, a clock starts ticking down. If the clock runs out entirely, the creditor or current owner of the debt cannot legally sue to recoup or collect on it. There’s an important distinction in the above paragraph: a collection agency or debt buyer may not legally sue to recoup or collect a debt; however, that doesn’t mean that a collection agency can’t attempt to collect it at all. Even though the statute of limitations might have expired—the statute of limitations for bringing a lawsuit—the account is still valid. You still have a legal right to that account, as long as you can prove it. The best practice for any agency working with out-of-stat debt is this: you want to have all the account documentation in order to prove, both to the consumer and to the court (should it come to that), that the consumer does, indeed, owe the debt. In closing, the statute of limitations is a legal defense. There is no legal issue with requesting payment of the balance, so long as the action is not pursued. Common Forms of Validation
Contracts Table of Contents
Credit Card
Statement
Charge-Off Statement
Last Statement
w/ Payment
Chain of Title Complim
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