Fair Debt Collection Practices Act | Key Points
- The Supreme Court of the United States rendered a ruling on May 15, 2017, wherein it dismissed a borrower’s claim against a debt collector for alleged violations of the FDCPA.
- The Supreme Court surmised the filing of a proof of claim in the debtor’s bankruptcy proceedings, which the debt collector knew was “stale” and otherwise unenforceable in a civil proceeding due to the running of the statute of limitations, did not violate the FDCPA.
- The Court explained the debt fell within the Bankruptcy Code’s definition of a “claim” since it was a “right to payment.” The Court also noted that the proof of claim on its face indicated that the limitations period had run.
- Filing the proof of claim did not fall within the scope of any of the five relevant words of the Fair Debt Collection Practices Act, i.e., such conduct did not constitute a false, deceptive or misleading representation nor was it unfair, or unconscionable to attempt to collect such a debt.
- The burden to investigate whether a debt collector’s claim is untimely remains on the debtor and the bankruptcy trustee who must address the untimeliness of the claim by raising an affirmative defense.