Read the following scenario and answer the question in 5 sentences at least. You
ID: 351406 • Letter: R
Question
Read the following scenario and answer the question in 5 sentences at least.
You recently were hired as a front line debt collection agent for a debt collection service in Michigan. Your boss assigns you to a fairly new client. That client shares with you several items: account ledgers showing overdue balances, checks that “bounced” or were returned for insufficient funds, and a list of dates of purchases. Most of the purchases were made more than 6 years ago. Michigan has a six year statute of limitations for the collection of debt, meaning that after six years, one cannot successfully bring a lawsuit to recover old debt. You talk to your boss who instructs you to go ahead and contact the debtors with the standard letter that offers to settle the outstanding debt for 75% of the amount owed. The letter also indicated that failure to either accept the settlement offer within 20 days, or pay off the full amount after day 20 but before day 45, would result in the filing of a lawsuit to collect the debt. As a new collection agent, you know that the Fair Debt Collection Practices Act governs behavior in the industry. Explain why this requested behavior may violate the act.
Explanation / Answer
This requested behaviour to ask the client to "either accept the settlement offer within 20 days, or pay off the full amount after day 20 but before day 45, failing to do so will result in the filing of a lawsuit to collect the debt" shall violate the the Fair Debt Collection Practices Act because the Act prohibits the debt collectors from using unfair means or abusive language to collect the debt. This request by the debt collection agency is unfair since Michigan has a six year statute of limitations for the collection of debt, meaning that after six years, one cannot successfully bring a lawsuit to recover old debt. So the debt collection agency cannot bring a lawsuit to collect debt in this case, as most of the purchases were made more than 6 years ago by the client. This is clear violation of the Act.
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