AARP Bulletin - November 2009

Your AARP ; The Law
By Emily Sachar
; The issue: Should debt collection agencies be able
to harass people to collect on very old debts?
Randy Feltman does not remember having a MasterCard 15 years ago, let
alone having any outstanding balance. But Portfolio Acquisitions LLC,
an Atlanta debt collection agency, insisted that Feltman had applied to
Prudential Bank for a credit card in 1994 and owed $6,324.96, including
penalties and interest. In 2005 Portfolio went to court to collect it.
In court, Feltman, 56, of Palatine, Ill., argued successfully that the
statute of limitations had expired before Portfolio went to court to
collect the debt, and that the collection agency lacked the proper
documentation. In May, the Illinois Court of Appeals agreed with
her. “I feel great they didn’t get away with taking advantage of a hard-
working middle-class person who is trying to do the right thing,”
Feltman said through her attorney, James Shedden.

The Feltman case highlights the larger issue of the aggressive,
sometimes unlawful tactics utilized by some debt collectors, the ex-
plosive growth of the debt-buying industry, and the harm to society’s
most vulnerable consumers, AARP argued in its brief supporting her.

“Collectors have become
increasingly aggressive,”
said Julie Nepveu, senior at-
torney with AARP Founda-
tion Litigation. “Unscrupu-
lous collectors are preying
upon older people, many of
whom have paid their
debts but may not have the
receipts many years later to
prove it.”
In 2007, $110 billion in
bad debt was purchased,
often after those debts
had been transferred be-
tween several creditors
and even written off by
original lenders. Because
debt buyers like Portfolio
can purchase debts from
creditors for a few cents on the dollar of face value, these transac-
tions are profitable even if buyers recover a fraction of the debt
they have bought. Attorneys for Portfolio Acquisitions declined to
comment on the case.
She received a phone call ong after the statute of limitations had expired.
; What it means to you: If you are contacted by a debt collec-
tion agency for a debt you do not believe you owe or that is more
than several years old, contact a lawyer or legal services bureau to
see what rights you have. If you are served with a court summons,
be sure to answer it to avoid having a default judgment entered
against you. ;
Emily Sachar is a journalist and author based in Brooklyn, N. Y.