Failure to Inform a Consumer That a Partial Payment Revives an Out-of-Stat Debt Could Be an FDCPA Violation, Court Says

A U.S. District Court Judge in Kansas refused to dismiss a lawsuit that alleged that a debt collection letter was false and/or misleading because it failed to inform the consumer that a partial payment would revive the statute of limitations on otherwise time-barred debt.

The case, Yang v. Midland Credit Management, Inc., 15-2686, 2016 WL 393726 (D.Kan., Feb. 2, 2016) involved the following set of facts:

On January 2, 2015, Defendant, in an attempt to collect a debt, sent a debt collection letter to Plaintiff. The letter stated “[s]pecial offers are now available to help you resolve your unpaid T-Mobile account, which is owned by MIDLAND FUNDING, LLC (“MCM”). Select one of the three options below and get closer to having one less thing to worry about.” The letter showed Plaintiff’s balance as $1,629.69. The options included one discounted payment in full of $651.87, six monthly payments of $217.29, or to call an account manager for more options. The letter further stated:

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