University of Chicago Law Review

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Since the 1990s, the trade in second-hand debt has exploded. Debt collectors now relentlessly pursue decades-old debts, purchased for pennies on the dollar from primary creditors. To avoid the bar that statutes of limitations place on judicial enforcement of these debts, third-party debt collectors seek “acknowledgment” from unwitting consumers, which resets the limitations periods under state law. Under the Fair Debt Collection Practices Act (FDCPA), federal courts have struggled to deal with these attempts at resetting the statutes of limitations—a practice that often feels inherently unfair. So far, courts have focused on whether collection attempts have violated the FDCPA’s ban on misrepresenting the legal status of a debt. But this Comment argues that courts should refocus their energies on the FDCPA’s prohibition against “unfair or unconscionable” collection practices.

Under this new approach, courts are justified in classifying all attempts at collecting revivable time-barred debts as unconscionable. Not only does the extension of the FDCPA to these tactics follow from congressional intent, but it also reflects the meaning of unconscionability under contract law. When the revival of time-barred debts is viewed as a quasi-contractual interaction, it meets the definition of common law unconscionability: by violating the public policy of the FDCPA and statutes of limitations; by unfairly disadvantaging consumers due to informational asymmetry and unequal bargaining power; and by giving a windfall to debt collectors but essentially no benefit to consumers, representing a total failure of consideration. This per se ban on the collection of revivable time-barred debts will also generate greater uniformity in consumer protection law and limit the substantial discretion currently available to courts.

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