The AARP Fraud Resource Center can help you spot and avoid common scams. Visit today!
by Emily Sachar, AARP Bulletin, November 1, 2009
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 explosive growth of the debt-buying industry, and the harm to society’s most vulnerable consumers, AARP argued in its brief supporting her. “Collectors have becomeincreasingly aggressive,” said Julie Nepveu, senior attorney with AARP Foundation Litigation. “Unscrupulous 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 between 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 transactions are profitable even if buyers recover a fraction of the debt they have bought. Attorneys for Portfolio Acquisitions declined to comment on the case.
What it means to you: If you are contacted by a debt collection 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.
Please leave your comment below.
You must be logged in to leave a comment.
Members save up to $100 per person on select guided tours.
Members save 15% all day, every day at participating locations.
Members save 15% on in-store purchases of frozen yogurt, treats and apparel.
AARP members receive exclusive member benefits & affect social change.
You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits.
Your email address is now confirmed.
Manage your email preferences and tell us which topics interest you so that we can prioritize the information you receive.
Explore all that AARP has to offer.
In the next 24 hours, you will receive an email to confirm your subscription to receive emails
related to AARP volunteering. Once you confirm that subscription, you will regularly
receive communications related to AARP volunteering. In the meantime, please feel free
to search for ways to make a difference in your community at