Court of Appeals for the Fifth Circuit Upholds Statute of Limitations in Civil Damages Case Against Debt Collector (2024)

In order to protect consumers from unfair, deceptive, and harassing debt collection practices the Fair Debt Collection Practices Act (“FDCPA”) was enacted. Its purpose was to eliminate abusive debt collection practices that debt collectors engage in and protect consumers. Should a debt collector violate the FDCPA, a consumer can recover damages from the collector under FDCPA Section 813(a)(2), make the collector stop contacting them, and collect reasonable attorneys fees and court costs under FDCPA Section 813(a)(3). However a consumer has only one year from the date the violation occurred to bring a lawsuit against a debt collector under FDCPA Section 813(d). If the consumer does not file the lawsuit prior to the expiration of the statute of limitations their claim could be dismissed.

In one case, Wagner v. BellSouth Telecommunications, Inc., the United States Court of Appeals for the Fifth Circuit affirmed a lower court’s decision to grant summary judgment in favor of the debt collectors because Wagner’s claims exceeded the Louisiana Unfair Trade Practices Act (“LUTPA”) statute of limitations and the statute of limitations under the FDCPA. In this lawsuit, it was alleged by Wagner that BellSouth billed her for two unauthorized phone services. When she did not pay the bills, BellSouth referred the accounts to collection agencies. One agency, Franklin Collection Service attempted to collect on the debt. Wagner sued both BellSouth and Franklin. BellSouth was sued under the LUTPA for allegedly reassigning the unauthorized accounts to collection agencies and Franklin for violations the FDCPA for supplying an incorrect date of delinquency to Equifax.

The claim against BellSouth was found to be prescribed under LUTPA’s statute of limitations and the claim against Franklin was prescribed under the FDCPA’s statute of limitations. In the claim against Franklin, Wagner argued that under the discovery rule the statute of limitations period should not begin to run until the date she learned that Franklin was reporting one of her accounts with an erroneous date of first delinquency. The district court found that the discovery rule did not apply and the Court of Appeals agreed.

The district court determined that the discover rule did not apply based the fact that Wagner should have seen that Franklin was repeatedly listed in adverse notations on her credit reports and she had received two collection notices from Franklin. This shows Wagner’s constructive knowledge that Franklin had violated the FDCPA so her claim could have been made prior to the expiration of the statute of limitations.

The statute of limitations under the FDCPA is only a year long; therefore consumers need to act quickly to file a lawsuit to make sure that their claim is timely.

We have been successfully representing those abused and taken advantage of by debt collectors for years, and have a long list of successful stories to share with you. We offer a FREE CASE REVIEW for you to assess whether we can assist you with your matter. Please do not hesitate to contact us toll free at 1-800-875-3666 if you prefer to talk to a trained professional over the phone instead, or of course, visit our website at http://www.krohnandmoss.com/