The statute of limitations in collections cases is crucial but complex. This statement applies equally to lawsuits filed to collect debts and to suits brought by consumers who allege a violation of the Fair Debt Collection Practices Act (FDCPA). Recently, a court in the Southern District of Georgia held that the triggering date for the statute of limitations in an FDCPA action against a debt collector was the date a consumer was served with the debt collector’s underlying debt collection suit, not the date the suit was filed.
In Daiss v. Robert S.D. Pace, Civil Action 4:22-cv-236 (S.D. Ga. Aug 24, 2023), a consumer raised FDCPA claims alleging the debt collector attempted to collect a debt through false and deceptive means. Specifically, the consumer alleged that the debt collector's filing of a debt collection suit was in and of itself an FDCPA violation. The debt collection action was filed with the court on August 16, 2021, and the consumer was served on August 20, 2021. The consumer’s FDCPA action was filed on August 19, 2022.
The debt collector argued that the consumer's FDCPA suit was time-barred because it was filed more than one year after the debt collection action was filed and was thus outside the applicable 1-year statute of limitations. The consumer responded that the statute of limitations did not start to run until he was served with the complaint. Since he was served on August 20, 2021, and filed his FDCPA action on August 19, 2022, he claimed his FDCPA suit was timely.
The court acknowledged that there is no consensus regarding when the statute of limitations begins to run in cases where the alleged violation is the filing of a debt collection lawsuit. Some courts have held that the limitations period commences when the underlying complaint is filed, while others have taken the view that it starts at the time of service of process. The court noted that though the 11th Circuit has not decided when the violation occurs when the claim arises out of a collection suit, it has held that the statute of limitations for FDCPA matters begins to run at “the debt collector’s ‘last opportunity to comply’ with the FDCPA.”
Thus, the court sided with the consumer and held that "when a plaintiff's FDCPA claims arise out of a collection suit, the ‘violation occurs’ for purposes of Section 1692k(d) when the plaintiff is served because that is the debt collector's last opportunity to comply with the statute."
This case highlights the importance of staying up to date not only on any changes to state laws regarding statute of limitations but also on the state and circuit court interpretations of those statutes. Further, This case also serves as a reminder to the collection community: In jurisdictions that follow this line of thinking, FDCPA violations stemming from filing a debt collection lawsuit can only be prevented until the consumer is served with that lawsuit.