In McMahon v. LVNV Funding, LLC, 2012 WL 2597933 (N.D.Ill. 2012), the defendant debt collector was sued in a class action alleging that the debt collector was required to disclose that stale debt was barred by the statute of limitations and the debt collector could not sue on it. Plaintiffs alleged that the FTC had taken the position in an unrelated enforcement action against another debt collector that the FDCPA required such disclosure. The District Court disagreed, and found the FTC’s enforcement positions was entitled to no Chevron deference.
Notably, the FDCPA does not explicitly require a debt collector attempting to recover on a time-barred debt to disclose that the debt is time-barred. Moreover, several courts in this district and two federal circuit courts have concluded that such attempts are not actionable under the FDCPA unless accompanied by a threat of litigation. See e.g., Murray v. CCB Credit Servs., Inc., 2004 WL 2943656 at *2 (N.D.Ill.Dec.15, 2004); Walker v. Cash Flow Consultants, Inc., 200 F.R.D. 613, 616 (N.D.Ill.2001); accord Huertas v. Galaxy Asset Mgmt., 641 F.3d 28, 33 (3rd Cir.2011); Freyermuth v. Credit Bureau Servs., Inc., 248 F.3d 767, 771 (8th Cir.2001). The courts reasoned that because the statute of limitations merely limits the judicial remedies available to the creditor and does not eliminate the underlying debt, attempting to collect on a time-barred debt without disclosing as much is not deceptive under the FDCPA unless a dunning letter threatens litigation. As McMahon does not allege that Defendants’ letters implicitly or explicitly threaten litigation, the Court is inclined to accept the sound reasoning of its sister courts and dismiss McMahon’s complaint. ¶ McMahon invites us to stray from existing judicial precedent in light of a recent lawsuit filed by the Federal Trade Commission (“FTC”) in the Middle District of Florida. On January 30, 2012, the FTC filed suit against a debt collection agency, Asset Acceptance, LLC (“Asset Acceptance”), alleging several violations of the FDCPA and Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a). United States of America v. Asset Acceptance, LLC, No. 8:12–cv–182–T–27EAJ (M.D.Fla.2012). The FTC, charged with enforcing the FDCPA, FN3 alleged that Asset Acceptance’s failure to disclose that a debt was time-barred was deceptive under the FDCPA. The same day that the complaint was filed, Asset Acceptance and the FTC entered into a Consent Decree pursuant to which Asset Acceptance was required to pay $2.5 million and include the following language in all subsequent collection letters in which Asset Acceptance knew that the statute of limitations on the debt had expired: “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it.” ¶ . . . Neither the Asset Acceptance complaint nor the Consent Decree constitute a definitive policy statement by the FTC. Neither outlines the reasoning, methodology, or factual predicate for McMahon’s assertion that sending dunning letters to collect on time-barred debt is deceptive under the FDCPA. Moreover, neither document discusses the existing case law addressing this issue and the perceived deficiencies therein. As such, neither the Consent Decree nor the Asset Acceptance complaint are persuasive. ¶ The clearest position taken by the FTC is expressed in a 2010 FTC Report (the “Report”). FTC, 2010 Debt Collection and Arbitration Roundtables Report, Repairing a Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration (July 2010), available at http://w ww.ftc.gov/os/2010/07/debtcollectionreport.pdf. The Report was the culmination of several conferences, multiple workshops, and the FTC’s extensive experience in addressing debtor complaints under the FDCPA. The FTC notified industry participants of these discussions and invited their comments. While this suggests that the FTC’s findings may be entitled to some deference, the Report’s conclusions are ambiguous at best. For example, the FTC concluded that “in many circumstances, [attempting to collect on a time-barred debt] may create a misleading impression that the collector can sue the consumer in court to collect the debt, in violation of … the FDCPA” (emphasis added). The FTC did not specify which circumstances such a collection attempt would constitute a deceptive practice under the FDCPA. ¶ In light of the foregoing, the Court affords little deference to the FTC’s position as outlined in the Asset Acceptance complaint, the Consent Decree, and the Report. This is particularly so in light of the well-reasoned and sound judicial decisions that run contrary to the FTC’s ambiguous position. Therefore, McMahon’s class allegations, which seek to impose liability for Defendants’ attempts to collect time-barred debts without disclosing that the debts are time-barred, are dismissed.