The National Consumer Law Center's article "Zombie Debt: What the CFPB Should Do About Attempts to Collect Old Debt" from January 2015 has been criticized for its poor information, lack of context, and poor assumptions. The article suggests that the Consumer Financial Protection Bureau, a federal agency, should have the legal power to ban the collection of debts that are outside the statute of limitations. However, the state-level statutes of limitations laws cannot be changed by the CFPB, as this goes beyond the agency's mandate.
Additionally, the article overlooks the fact that some statutes of limitations for certain debts, like credit cards, can be as short as three years. It assumes that any attempt to collect a debt, regardless of the statute, is wrong. While this argument may hold true for debts over 7-10 years old, which have dropped off credit reports, collecting on debts with a short statute of limitations like three years is not unreasonable.
The idea that time-barred debt collections are inherently wrong is problematic. While collectors should not be overly aggressive in collecting time-barred debts, the debt itself was incurred and should still be owed. Statutes of limitations do not negate this fact. Consumers should not rely on collectors only collecting legally enforceable debts, especially if the debt is only a few years old and still appears on credit reports.
Settling a time-barred debt is not wrong, as any debt can and should be settled for the benefit of all parties involved. However, collecting debts using unethical and dishonest means should not be tolerated, and collectors should not make false threats of legal action or misrepresent debts.
In conclusion, the NCLC's "Zombie Debt" report presents the issue of old debts that are outside the statute of limitations, but the CFPB's authority to regulate such collections goes beyond its mandate. The report also overlooks the fact that some statutes of limitations are short, and collecting on time-barred debts is not inherently wrong. Collecting debts ethically and responsibly is essential, and consumers should also understand their rights.