In Pantoja v. Portfolio Recovery Associates, LLC, 2017 WL 1160902, at *3–7 (C.A.7 (Ill.), 2017), the Court of Appeals for the Seventh Circuit held that a debt purchaser’s letter collecting on 20-year old debt violated the FDCPA.
We start with law that we believe is settled. First, a debt collector violates the Act by suing to collect a consumer debt after the statute of limitations has run and bars the suit. Phillips v. Asset Acceptance, LLC, 736 F.3d 1076, 1079 (7th Cir. 2013), . . .Second, a debt collector also violates the Act by threatening to sue to collect such a debt. See 15 U.S.C. § 1692e(5) (outlawing a “threat to take any action that cannot legally be taken or that is not intended to be taken”); McMahon v. LVNV Funding, LLC, 744 F.3d 1010, 1021 (7th Cir. 2014) (“The plain language of the FDCPA prohibits … threatening to take actions that the collector cannot take.”); Huertas, 641 F.3d at 33 (plaintiff’s FDCPA claim regarding attempt to collect a time-barred debt “hinges on whether [the dunning] letter threatened litigation”); Freyermuth v. Credit Bureau Services, Inc., 248 F.3d 767, 771 (8th Cir. 2001) (“[I]n the absence of a threat of litigation or actual litigation, no violation of the FDCPA has occurred when a debt collector attempts to collect on a potentially time-barred debt that is otherwise valid.”); Parkis v. Arrow Financial, 2008 WL 94798, at *7 (N.D. Ill. Jan. 8, 2008); Walker v. Cash Flow Consultants, Inc., 200 F.R.D. 613, 616 (N.D. Ill. 2001); Beattie v. D.M. Collections, Inc., 754 F. Supp. 383, 393 (D. Del. 1991). The point of controversy here concerns efforts to collect consumer debts on which the statute of limitations has expired when the effort does not involve filing or threatening a lawsuit. Compare McMahon, 744 F.3d at 1020 (dunning letters offering to “settle” time-barred debts could violate Act by leading debtors to believe the debts were legally enforceable); Daugherty v. Convergent Outsourcing, Inc., 836 F.3d 507, 509 (5th Cir. 2016) (effort to collect is not automatically unlawful, but letter violates FDCPA if it could lead unsophisticated consumer to believe her time-barred debt is legally enforceable); and Buchanan v. Northland Group, Inc., 776 F.3d 393, 397 (6th Cir. 2015) (reversing dismissal on pleadings; offer to settle time-barred debt could violate Act by failing to disclose that suit would be time-barred or that partial payment would remove statute of limitations bar), with Huertas, 641 F.3d at 33 (holding that attempt to collect a time-barred debt was permissible if litigation not threatened), and Freyermuth, 248 F.3d at 771 (same). Even without an express threat of litigation, such collection efforts offer opportunities for mischief and deception, as we explain below. . . .We agree with the district court’s two reasons for finding that the dunning letter here was deceptive. First, the letter does not even hint, let alone make clear to the recipient, that if he makes a partial payment or even just a promise to make a partial payment, he risks loss of the otherwise ironclad protection of the statute of limitations. Second, the letter did not make clear to the recipient that the law prohibits the collector from suing to collect this old debt. Either is sufficient reason to affirm summary judgment for the plaintiff.