FDCPA Used to Protect Collection Agencies in Oregon

Time was, if you were an Oregonian consumer with some bad credit card debt, if you could just hold out until the statute of limitations passed, you were sort of home free. Not the most ethical way of handling bad debt, sure, but let’s not get distracted.

The month of March, however, may have changed all of that.

Three cases in Oregon seem to be pointing the way to a renewed chance to collect for collection agencies. Debt collectors can sue delinquent credit-card holders for up to six years after the credit-card charges are incurred. This reverses a previous ruling that suggested that Oregonians only had to wait three years to be “in the clear” so to speak.

This new normal came about from three separate consumer cases, all involving Delaware-based Chase Bank. Delaware has a three-year statute of limitations on credit card debt, so when Chase sold those delinquent accounts to collection agencies, the consumers thought they could sue on the basis of their debts being out-of-stat.

However, Oregon’s Court of Appeals put a hitch in that giddy-up by upholding the six-years statute, even though the agreement the consumers signed said that Delaware’s three-year statute would be the benchmark.

What changed? The fact that the debt had been sold to a third-party collection agency. This triggered a provision in the Fair Debt Collection Practices Act that bars collectors from suing from afar and requires that collection agencies sue consumers in the state in which the consumer resides. And since that state, in this case, is Oregon, with its six-year statute of limitations…Bob’s your uncle.

It’s ironic, and yet fitting, that a consumer protection law was used to uphold the rights of a collection agency.