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Statute of Limitations vs. Collections Reporting

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  • 08-31-2013, 08:18 AM
    NSBear
    Statute of Limitations vs. Collections Reporting
    My question involves collection proceedings in the State of:Minnesota.

    I have been harrassed recently by a debt buyer. A Collection issue mysteriously appeared on my report. The name of the debt buyer makes it sound like they operate out of a western state, but their offices appear to be in the midwest (although the collections letter was mailed from the western state). I am located in Minnesota. I contacted them after reading about what to say on this website and asked them for proof (copies of the personal guarantee they reference) that the debt was actually mine (I honestly do not believe it is) and that they were able to collect on it. I heard nothing back, so I made a dispute on my Experian credit report. Experian reported back that they had contacted the collections agency who had verified the debt as valid. When I contacted Experian they indicated that all they did was contact the collections agency and get an assurance the debt was valid. There were not copies of any contracts signed by me or proof that it was indeed valid. They updated my report to indicate that it would age off this October (not long from now - 1 month) but I was still upset about this, mostly because I believe there to be fraud involved. So I contacted the collection agencies local BBB and filed a complaint. I was told they have an "F" rating with the BBB for EXACTLY this sort of thing. I was also told to contact the Minnesota Department of Commerce because Collection Agencies and Debt Collectors are regulated in Minnesota heavily. When I did this I learned that the company was not licensed to collect in Minnesota! Also, around this time the company decided to file collections thru Equifax against me with differing dates *AND* which would extend the time reported from October (where it ages off Experian) to February of next year (on Equifax). O h, and one other piece of relevant information. I was able to find out who they said the original creditor was and contacted them and they have no idea who I am - they provide services for businesses - not directly to individuals.

    So I am planning on filing a local lawsuit against them and collecting information, but my legal question is actually pretty simple. If the statute of limitations is exceeded (which it definitely is in this case according to both the credit reporting bureau reports which is the ONLY information I have on this). Can a collection agency file a collection after the statute of limitations is exceeded with a credit bureau? (they did) Can they arbitrary change dates? (they did) What prevents them from continually doing this besides a lawsuit from me? If they are not in my state how can a lawsuit from me even effect them from filing a collection report with a collection reporting agency? I am obviously very frustrated over this.
  • 08-31-2013, 08:48 AM
    adjusterjack
    Re: Statute of Limitations vs. Collections Reporting
    Read the Fair Debt Collections Act:

    http://www.ftc.gov/os/statutes/fdcpajump.shtm

    Among other things:

    1 - A statute of limitations applies to the deadline for filing a lawsuit. If there is no lawsuit there is no statute of limitations on dunning for the debt. They can theoretically dun you for it for the rest of your life.

    2 - The entry stays on a credit report for 7 years from the date of default plus (I believe) an administrative 6 months. Re-aging is a violation of the FCRA.

    3 - That they aren't licensed in their state doesn't mean they cannot attempt to collect in your state.

    4 - Filing a lawsuit in your state might or might not work. I suggest you consult an attorney. I believe that the FCRA allows for attorney fees. Check that.
  • 08-31-2013, 10:05 AM
    Mr. Knowitall
    Re: Statute of Limitations vs. Collections Reporting
    Did you report the out-of-state collection agency to your state attorney general's office and department of commerce? (Note, there is an exception to the licensing requirement for out-of-state collection agencies to conduct limited operations in Minnesota, Minnesota Statutes Sec. 332.3351; it may or may not be applicable, depending on the full facts.)
    Quote:

    Quoting NSBear
    View Post
    Can a collection agency file a collection after the statute of limitations is exceeded with a credit bureau?

    The seven year limit for the reporting of (most) debts on your credit report is unrelated to the statute of limitations for litigation. It is possible that a state statute of limitations will be longer than seven years, although in most states and contexts the limitations period for litigation will be shorter than seven years.

    It is possible for somebody to file a lawsuit after the statute of limitations runs, and if that happens the defendant should be sure to raise the statute of limitations along with any other applicable affirmative defenses in a timely manner, consistent with the state's court rules.

    Also, there is no reason somebody can't ask you to pay a debt that is too old to be reported or that is no longer enforceable through a court. A debt collector should not make false representations, such as, "We'll sue you if you don't pay," if they either don't intend to sue or know that a lawsuit would be time-barred.
    Quote:

    Quoting NSBear
    Can they arbitrary change dates?

    They are required to make accurate reports.
    Quote:

    Quoting NSBear
    What prevents them from continually doing this besides a lawsuit from me?

    A couple of possibilities... The possibility of action by a regulatory agency or attorney general; the possibility of being barred from reporting credit information to a major CRA due to their history of false or inaccurate reports.
    Quote:

    Quoting NSBear
    If they are not in my state how can a lawsuit from me even effect them from filing a collection report with a collection reporting agency? I am obviously very frustrated over this.

    Even if you get an injunction, it's possible that they'll violate the injunction. Were they to disregard a judgment or order, your most obvious responses would be to try to convince the CRA's to respect the order or take additional action through the court, (or both).
  • 08-31-2013, 10:12 AM
    NSBear
    Re: Statute of Limitations vs. Collections Reporting
    Thanks, Jack! I am not worried about dunning (I have no problem NICELY telling people not to contact me) but I am worried about the continued reporting to my credit bureau and the "re-aging" of the credit by 6 MONTHS after my complaint. That appears to be an attempt to coerce me to settle the debt, because they cant do that with the original credit bureau they reported to (experian). I expect them to wait until February and then report it to Transunion with a JUNE date of next year. At least that seems like the direction this is going in.

    They may very well be licensed in the state they operate in but they are not licensed to operate in Minnesota with heavily regulates Collections Agencies and Debt Collectors.

    I am somewhat hesitate to contact a lawyer over a debt of only a few thousand dollars - I do not believe this to be a valid debt because the original creditor listed doesnt seem to know who I am, but what if it is? If I sue them, doesnt that allow them to countersue me? I could just allow this all to age off my experian report in a month and then off my equifax in February, but it chaps my ass to see them get away with this.

    Anyway, I have some thinking to do... and I appreciate your response very much!
  • 08-31-2013, 10:51 AM
    adjusterjack
    Re: Statute of Limitations vs. Collections Reporting
    Quote:

    Quoting NSBear
    View Post
    I do not believe this to be a valid debt because the original creditor listed doesnt seem to know who I am,

    Once the original creditor has sold the debt to a collection agency, it will often purge records after a particular amount of time and I wouldn't expect human employees to know who you are if there are no records on you.

    Quote:

    Quoting NSBear
    View Post

    but what if it is?

    Then you either pay it or take whatever consequences befall you.

    Quote:

    Quoting NSBear
    View Post
    If I sue them, doesnt that allow them to countersue me?

    Yes.

    Quote:

    Quoting NSBear
    View Post
    I could just allow this all to age off my experian report in a month and then off my equifax in February,

    You could do that.

    Quote:

    Quoting NSBear
    View Post
    it chaps my ass to see them get away with this.

    They aren't "getting away" with anything if you owe the money.
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