The Federal Trade Commission – as part of its crackdown on illegal debt-collection practices – got a $2.5 million settlement Asset Acceptance Capital Corp., for pressuring borrowers to pay debts that are no longer legally owed.
The Wall Street Journal said this morning that other companies are also being investigated for similar offenses.
“At the center of the U.S. government’s effort is what it calls the increasingly common practice of pursuing debts that have expired under statutes of limitation. People who stop paying their bills get their credit ratings punished but eventually are freed of old debt under laws that vary by state. The time frame ranges from two years to more than 15 years, the FTC said,” wrote the WSJ.
“If the debtor agrees to make even a single payment on an expired debt, the clock starts over on some part of the old obligation, a process the industry calls “re-aging.” The practice was the subject of a Page One article in The Wall Street Journal in December.”
This is long overdue and I fully support the decision.
It is time for other countries including Australia to take similar actions.