A collector chasing a debt too old to sue on cannot dress up its letters with false urgency and vague threats while staying silent about the debt's age.
Collection letters on a wholly time-barred debt that gave no indication the debt was old or past limitations, combined with vague 'urgent' offers and threats of 'additional collection efforts,' misrepresented the debt's legal enforceability in violation of 15 U.S.C. § 1692e(2) and (10); the court left open whether silence alone is misleading as a matter of law.
- Case
- Manuel v. Merchants & Professional Bureau, Inc.
- Citation
- 956 F.3d 822 (5th Cir. 2020), No. 19-50814
- Court or agency
- U.S. Court of Appeals for the Fifth Circuit
- Date
- April 29, 2020
- Precedential
- Yes (published)
- Law
- FDCPA, Texas law
Summary
A collector sent a Texas woman four letters in 2017, three of them in Spanish, about a $250 orthopedic bill from 2010 and 2011 that was past Texas's four-year limitations period. The letters stressed urgency and 'special offers' but never said the debt was old. The Fifth Circuit affirmed summary judgment for the consumer.
Background
Silvia Manuel owed Texas Orthopedics, Sports and Rehabilitation Associates $250 for services in December 2010 and January 2011. The account went to Merchants and Professional Bureau, which sent six letters in 2011, then nothing for about six years, then four more letters in October 2017. By then it was undisputed that Texas’s four-year statute of limitations barred any lawsuit.
The 2017 letters did not say the debt was time-barred or that a partial payment could affect the limitations defense. They did say things like “Urgent! Payment has not been received!”, “You have only one more opportunity to stop all collection efforts,” and “This is a very special offer. Please take advantage of this now.” They warned of “additional collection efforts, such as personal phone calls.”
Manuel sued under the FDCPA. The Western District of Texas granted her summary judgment, holding that a letter on time-barred debt that omits limitations warnings is misleading as a matter of law. The collector appealed.
What the court held
The panel (Chief Judge Owen and Judges Higginbotham and Willett; opinion by Judge Patrick E. Higginbotham) affirmed, but on narrower grounds.
The court built on its 2016 decision in Daugherty v. Convergent Outsourcing, which held that a letter offering to “settle” a time-barred debt without disclosing that it is unenforceable can violate the FDCPA. Merchants argued that Daugherty applies only to settlement offers and litigation threats. The court disagreed, saying that would “place artificial constraints on broad terms” like “deceptive” and “misleading.”
The court chose not to decide whether silence about a debt’s age is, by itself, misleading as a matter of law. Instead it held that these letters, read as a whole, misled. They did not even state when the debt was incurred. Their urgent language and vague threats of “additional collection efforts” played the same role as the settlement offers in earlier cases. The court agreed with the district court that the letters were “example[s] of careful and crafted ambiguity” and held they “misrepresent the legal enforceability of the underlying debt in violation of 15 U.S.C. § 1692e(2) and (10).”
In a footnote, the court noted that since September 2019, Texas Finance Code § 392.307 requires debt buyers’ first letters on time-barred debt to include a notice that begins “THE LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT.”
Our take
Manuel is the leading Fifth Circuit statement that a collector cannot exploit an old debt with manufactured urgency. Although the court did not adopt a bright-line rule requiring a limitations disclosure, it made clear that the question is how the whole letter would strike an unsophisticated consumer, not whether the collector avoided specific magic words.
Two years later, in Perez v. McCreary, Veselka, Bragg & Allen, the Fifth Circuit tightened standing requirements for federal suits. Manuel’s merits holding still stands, but a consumer suing in federal court now also needs a concrete injury.
What it means if you’re sued in Texas
Old debts are frequently bought and re-collected. If you get a letter about an account you have not paid in years, look for the date of last payment or default. If more than four years have passed, the creditor generally cannot win a lawsuit if you raise limitations, and if you are sued you must raise that defense in your answer. Be cautious about making a “good faith” payment before you understand your rights. A free case review is available if you want us to check the dates on your account.
Takeaway
If a collector suddenly revives an old account with urgent language, check the dates; the age of the debt may be a defense and the letters themselves may be unlawful.
Sources
Primary authority
Secondary sources
This summary and analysis are general information, not legal advice. Later decisions, amendments or agency actions may change the law; check the current status before relying on it.